How is software helpful for business improvement

Change from Dynamics AX to Dynamics 365 in the cloud

  • 3 minutes to read

Is your company considering migrating your Dynamics AX solution to Finance and Operations apps in the cloud or staying local? To determine if this is the right step, you need to understand the economic impact of your current AX solution and compare it to Dynamics 365 in the cloud.

Based on our experience working with hundreds of organizations, we typically see the economic impact in three key areas:

1. The total cost of ownership (TCO)

The starting point is a financial estimate of the economic value of investments in relation to the total direct and indirect cost savings over your system life cycle. The TCO estimate takes into account six cost areas to visualize the transition to the cloud.

TCO componentCloud impact
softwareCloud licensing consolidates a number of costs and offers different licensing models, including monthly or annual pay-as-you-go costs, often with costs shifting from CapEx to OpEx.
Implementation, customization and trainingMoving to the cloud often means reducing the level of platform customization and lowering long-term costs for development, support and upgrades. Onboarding and user support costs are typically reduced through guided processes and a modern user experience.
hardwareUp-front or ongoing costs for the purchase of infrastructure such as servers, network hardware, operating systems, databases and storage as well as costs (such as electricity) are avoided. Also, add a comparison of disaster recovery and mobile deployment.
IT staffMaintenance labor costs are reduced (servers, databases, and other technologies) and IT teams can focus on business improvement initiatives.
maintenanceSupport costs including fixes, patches and updates are minimized.
UpgradesUpgrades require minimal IT staff supervision, and with automated background updates there is no additional software and minimal upgrade costs.

2. Improve business performance

Moving to the cloud offers significant potential for improving business performance through improved productivity, performance and business insights.

Organizations have often observed that improved automation, better user experience, less rework, and improved forecasting increase productivity across the organization. In addition, real-time data analysis and optimized processes can help improve forecast accuracy, improve quality, reduce waste and avoid delays.

Dynamics 365 cloud solutions typically perform better than on-premises in terms of cost of ownership, adherence to schedule, and on-time delivery. Overall, this can lead to an improvement in the cycle time of key business processes, as well as improved operational efficiency, which translates into higher profit margins. The business results (KPI impact) from using cloud ERP vary by industry.

3. Accelerated value creation

The move to the cloud offers enormous opportunities to become more agile and to react faster and faster to changing requirements.

With faster deployment, more frequent updates, and a faster process to improve functionality, organizations are often able to to continuously improve.

“The company is no longer waiting for IT. We are now seen as trailblazers rather than roadblocks. "

In addition, companies can adapt faster, scale to new locations or regions, or reduce the time it takes to take over newly acquired companies. This speeds the time it takes to standardize and improve performance, as well as getting consistent global performance information.

Finally, with new insights based on more robust data collection and real-time availability, companies can become more data driven and the Driving innovation. These insights support improved strategic planning and new operating models.

Testimonials from customers

“Our technical debt position is much better - a huge improvement. While we still keep some key integrations with frontier applications, our position is far more stable with upgrades - we don't have to worry about the "house of cards" falling apart. Our inventory of supported borderline applications was much larger than it is now and required additional maintenance and testing with each upgrade. "

- Business Applications Manager

After 15 years with our previous local solution, we only did the bare minimum. We have stopped investing in upgrading the system, and as a result, the system has not been effective in supporting the rate of change and growth in our business. "

- Business Applications Manager

“Research from Aberdeen shows that 50% of companies using a cloud ERP model can see the status of all processes and data in real time. Only 25% of companies using a local solution can say this. "

Aberdeen, "Top Performers Know It's Time to Migrate to Cloud ERP: Here's Why and How," 2016

Next Steps

Would you like to explore the benefits of migration? Sign up for a free Microsoft migration assessment at aka.ms/d365migrate.

See also

Overview of the local migration program
Standard migration assessment
Bargaining improvement plan
Program FAQs
Functional comparison between Dynamics AX and Dynamics 365
Assessment tool for CRM platform
Video: Dynamics 365 Migration Program