Microsoft Dynamics 365 for Finance & Operations: reimplementation vs. upgrade

You’ve made the decision to move to Dynamics 365 for Finance and Operations, congratulations. But how do you get there? There are basically two main paths you can take—a technical upgrade or a reimplementation. With a technical upgrade, the data and modifications on your current Dynamics AX environment are converted into a new Dynamics 365 for Finance and Operations environment. With a reimplementation, selected data and modifications on your current Dynamics AX environment are migrated into a new Dynamics 365 for Finance and Operations environment. These are two very different approaches. So, which do you choose?  

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Exploring your options 

The first thing you’ll need to determine is whether an upgrade is even possible. Because Dynamics 365 for Finance and Operations was based on Dynamics AX R3 CU8, any version that came after that should be safe. Microsoft has released tools for upgrading data from Dynamics AX 2009, but not code. Several other factors can help you better define your options. Start by considering the following:  

• Date of original implementation—Direct upgrades aren’t possible on older versions like Axapta 3 or Dynamics AX 4. It will take multiple jumps to get to Dynamics 365 for finance and Operations, so upgrading is complicated, and the cost may be prohibitive.  
   
  
  
• Current business needs—Perhaps after going live with Dynamics AX your business went in a completely different direction. Or was acquired by another company. Or maybe you sold off part of the business. In cases like these, it may not make sense to take the entire solution and move it forward to the latest version. It might be more advantageous to start with a clean slate.  
   
  
  
• Customization—If your Dynamics AX environment is heavily modified with non-standard processes, reimplementation may be the more logical option. Take this opportunity to think critically about your processes and how close they are to standard. 
  
  

There are other considerations that could come into play, depending on your unique situation, but you’ll want to spend some time thinking about where you are as a business, and where you are going before you make any decisions. Let’s take a closer look at the pros and cons of each option below.  

Reimplementation  

Reimplementing means firing up a clean version of Dynamics 365 for Finance and Operations and migrating the data and modifications you require. Migrating data and modifications from one Dynamics AX system to another is much easier than when a completely different ERP is involved. And Microsoft provides some clever and helpful tools to make the process smoother.  

Reimplementation gives you a chance to review, rationalize and cleanse your data, so you only bring across what you need. However, moving transactional data is impossible, so you will not have your history in the new version. 

Pros 

A reimplementation gives you a clean slate and the opportunity to:  

• Reevaluate and rework internal processes 
• Remove redundant modifications 
• Enjoy greater functionality 
• Redesign data to better reflect business needs 
  
  

Cons  

Some of the common drawbacks of a reimplementation include:  

• Significant investment of time and resources 
• Possible loss of transactional data 
• Requires the assistance of skilled consultants 

Upgrading 

Upgrading is a more technical process. Using a series of tools and scripts, the data, codes, and modifications in your current Dynamics AX environment are converted into a new Dynamics 365 environment. The conversion tools are incredibly smart, but they can’t account for every possible configuration of a Dynamics AX environment. You need to carry out user acceptance testing for each business process to ensure the data and customizations are working. This is where a good Dynamics 365 partner can make the difference between success and failure, as they’ll help find and resolve issues where the scripts haven’t worked correctly.  

Pros 

• Faster and less time-consuming than reimplementing
• Less change requires less training
• Lower resource investment 
  
  

Cons  

• Historical baggage is inherited by the new system.  
• No opportunity to rationalize data and processes.
• Requires an extremely robust and repeatable process
• Upgrading may not be an option  
  
  

For businesses on Dynamics AX 2009 or older, it’s time to start looking at what Dynamics 365 for Finance and Operations can offer from a technology perspective: cloud-based, incredibly tight office integration, operating from any device, part of Dynamics 365 total solution, and so on. There’s also the functional perspective including access to out-of-the-box verticals such as Process Manufacturing, Lean Manufacturing and Retail. Whether a reimplementation or an upgrade is the solution for you, putting modern technology to work for you is the best way to future-proof your business and remain competitive.