Planning Your Migration to Microsoft D365 F&SCM

insightsoftware -
January 18, 2021

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Planning Your Migration Feature

Over the past few years, software vendors moved their applications to the cloud. Microsoft committed heavily to the cloud across all its product lines, including the Dynamics family of ERP and CRM solutions. That will mean an eventual migration to the cloud for customers of Microsoft Dynamics AX, Microsoft Dynamics CRM, and the legacy Microsoft GP, SL, and NAV products.

In the case of Microsoft Dynamics AX, that will mean a move to Microsoft Dynamics 365 Finance & Supply Chain Management (D365 F&SCM), which is an evolution of the AX code line. Customers should think that migration to Microsoft D365 F&SCM is a simple upgrade process, though. Successful migration requires considerable time, effort, and advanced planning.

Fortunately, Microsoft plans to support its legacy Dynamics products (including AX)  until at least 2028, but the company’s future investments in improved functionality focus on the two new Microsoft D365 products. For customers remaining on Dynamics AX, that means a diminishing number of enhancements over the next few years and an increasingly compelling argument for making the move to the cloud.

If your organization has not yet started the process of planning your migration, it is advisable to start having that conversation sooner rather than later. Advance planning ensures that you allocate an adequate budget and resources to the project. Perhaps more importantly, it provides an opportunity for the organization to implement measures in advance that can reduce risk, lower costs, and improve the end result.

Here are some key factors to consider as your organization plans migration to Microsoft D365 F&SCM.

1. Start with a Functional Review

Customers running Dynamics AX can be fairly confident that the existing functionality in their current core ERP system will carry over to Microsoft D365 F&SCM without losing key features and benefits. However, you will lose a few features in the migration because Microsoft chose to remove or deprecate certain features.

Typically, a company makes that decision when it intends to replace certain features with better or faster functionality. Microsoft chose to replace certain components, rather than trying to improve the existing features. It’s highly unlikely, therefore, that any customers will suffer a loss in functionality. Rather, they must consider how these changes might impact their workflows, user training, reports, customizations, and third-party products.

That leads us to several other key areas that call for closer examination. Customizations, third-party software products, and reporting require particular attention in their own right, not just as they relate to removed or deprecated features.

Customizations are typically made of software code written to extend or modify functionality within Dynamics AX. Historically, two possible approaches to this were overlaying or extending the Dynamics code. Overlaying refers to the process of inserting custom programming directly into Microsoft’s source code. In essence, it amounts to a direct modification of the Dynamics code, which makes it risky and difficult to maintain.

For several years, Microsoft has encouraged customers to shift to the new approach of extending the application by writing self-contained code modules that plug into Microsoft Dynamics AX. Because they are separate from the core ERP application, there is no risk that they will corrupt that core functionality. In addition, extensions are significantly easier to maintain and manage.

In Microsoft Dynamics 365 F&SCM, overlaying is no longer an option. For customers migrating from Dynamics AX, that could mean re-writing existing overlay customizations as extensions. Fortunately, Microsoft has provided some tools as part of its Lifecycle Services (LCS) portal that can automate much of that process. Nevertheless, you should approach it in the same way that you would handle any other software development project–with appropriate plans for migrating and testing the resulting extensions.

2. Review Third-Party Software

It is common for complex organizations to require one or more third-party components to fulfill requirements that Microsoft’s ERP product cannot meet alone. Tax provisioning and reporting, EDI, e-commerce, integrated planning and budgeting, and low-code integration tools are all examples of third-party products that extend the functionality of Dynamics to fulfill niche functions that don’t exist in the ERP software out of the box.

As you plan your migration to Microsoft D365 F&SCM, it’s important to review the list of third-party applications installed in your environment alongside Dynamics AX to determine which of them to bring along with you on your journey to the cloud.

Many independent software vendors (ISVs) are relatively small businesses and are therefore subject to changes such as selling a product or the entire company, discontinuing products, or even going out of business altogether. As Microsoft moves its portfolio of ERP products to the cloud, the vast majority of those ISVs will invest in upgrading their code to create a new version that is compatible with Microsoft D365 F&SCM.

Your first step is to determine whether you even need to continue using third-party products. In some cases, Microsoft may have already added the necessary functionality to Microsoft D365 F&SCM. Even if you find that to be the case, however, don’t jump to the conclusion that you should abandon your existing third-party products. If Microsoft’s new functionality is a “version 1” addition to Dynamics, you might be better off continuing with the third-party solution.

If you decide to stay with your existing third-party products, check with each of those ISVs to determine whether they plan a new version for Microsoft D365 F&SCM and, if so, ask them what the migration process will look like.

3. Plan Your Data Migration

Data migration is normally a fairly complex task as it requires a detailed mapping, filtering, and cleansing process. Ultimately, much of that needs to be automated, and if it’s not done with the appropriate level of care, it can create nightmares when you go live with the new system.

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Fortunately, there are some tools that are available that help customers to move data from any of the legacy Dynamics products to Microsoft D365 F&SCM. Microsoft’s LCS provides software that automates portions of the data migration.

Many customers require a more sophisticated approach to getting data into Microsoft Dynamics, however. If you have made customizations or modifications that extend the existing data in your legacy ERP system, an off-the-shelf automated approach to migration may not cover it all.

In a separate blog post, we discussed the potential for using a data warehouse as a means for automating data extraction and transformation in advance of system migration. That enables companies to easily perform test runs of the data migration process and even to train users on the new system with actual company data instead of using generic demo data. This automated approach shortens the downtime required in the days before an ERP system goes live. With Jet Analytics, it is remarkably easy to build the infrastructure to automate major portions of the data migration process.

4. Don’t Let Reports Be an Afterthought

We cannot stress this point strongly enough: don’t let reports be an afterthought. With the move to Microsoft D365 F&SCM, customers should expect major changes to the way they access their data for reporting. We have covered it extensively in the following insightsoftware blogs:

The short version of the story goes like this: To enhance security, Microsoft decided to restrict direct access and replace it with an abstraction layer made of “data entities.” While this approach is arguably more secure, it also has major drawbacks. Those include slower performance, a steep learning curve, and an increased dependency on highly specialized IT resources.

Microsoft’s overall approach to reporting is shifting toward Azure Data Lakes and Microsoft Power BI, both of which have a legitimate role to play in large enterprises, but which are poorly suited to core financial and operational reporting.

The key takeaway is that Microsoft’s new approach to reporting in Microsoft D365 F&SCM will require a major overhaul of custom and modified reports that access Dynamics data. Without deep technical expertise in Microsoft D365 F&SCM’s data entities, frontline users will have a hard time getting the information they need.

Reporting and analytics solutions from insightsoftware eliminate complexity, reduce cost, and decrease the risk of lengthy implementations. They remove the dependency on technical experts, allowing finance and accounting, operations, and other departments to create and modify reports without relying on the IT department.

Companies planning an eventual migration to Microsoft D365 F&SCM can get a head start on their cloud migration project, bypassing the reporting nightmare entirely. By implementing a robust third-party reporting and analytics tool today, you can complete a major portion of the cloud migration project well in advance, reducing overall project risk, lowering costs, and decreasing dependency on IT.

What insightsoftware Brings to the Table

Providing complete data access is what insightsoftware does. That’s why we’ve tailored our Jet Analytics solution to Microsoft D365 F&SCM and made significant improvements to how customers are reporting. Data entities have added a layer of complexity to self-service reporting. To lower the impact on your IT staff and finance teams, we offer a different approach aimed at significantly reducing costs and time.

Jet Analytics makes upgrading vastly easier and less expensive. Reports developed for Microsoft Dynamics AX will work in Microsoft D365 F&SCM without extensive modification. To learn more about how insightsoftware can enable agile, streamlined reporting against Microsoft D365 F&SCM in your organization, contact us for more information or a free demo.