What is the difference between Dynamics 365 and AX?

Microsoft’s suite of powerful business software solutions has become essential tools for businesses worldwide. Two of the most powerful enterprise resource planning (ERP) solutions in Microsoft’s portfolio are Dynamics AX (AX) and Dynamics 365. This article aims to answer the question “What is the difference between Dynamics 365 and AX?”, shedding light on their unique attributes, their key differences, and the history between the two systems.

Dynamics AX was a robust ERP solution primarily tailored for large enterprises. AX was on-premises solution, which meant it was hosted on servers within your organization, in a data center, or on virtual servers. It was known for its robust capabilities but had limitations in terms of flexibility and scalability. Upgrades were major events that only occurred every few years, and it was primarily designed for larger enterprises.

Dynamics AX served as a reliable backbone for managing complex financials, supply chain, and manufacturing operations. However, with Microsoft’s strategic shift towards the cloud and the introduction of Dynamics 365, Dynamics AX underwent a significant transformation. As part of this evolution, Dynamics AX was rebranded as Microsoft Dynamics 365 Finance and Operations, which consists of Dynamics 365 Finance and Dynamics 365 Supply Chain Management. The rebranding reflected the software’s evolving focus, encompassing a wide range of business functions under one cohesive cloud-based solution.

Today, Dynamics AX is no longer available to new customers, and mainstream support has ended. This means that Microsoft no longer provides support, feature updates, or hotfixes for Dynamics AX.  As Microsoft continues to innovate within the Dynamics 365 suite, businesses relying on Dynamics AX are encouraged to consider migrating to take advantage of the latest cloud benefits and ongoing support services.

Microsoft Dynamics 365 is the next generation of legacy Dynamics and is a versatile cloud-based suite that merges enterprise resource planning (ERP) and customer relationship management (CRM) applications. This innovative platform streamlines various Microsoft business applications, providing businesses with a comprehensive suite that can be customized to their specific needs. Its modules encompass an extensive array, including financial management, supply chain management, human resources, sales, marketing, customer service, and more. Built on Microsoft’s robust cloud platform, Dynamics 365 offers adaptability, modularity, and the added advantage of regular updates. This approach empowers businesses with the flexibility, scalability, and accessibility needed to navigate the ever-evolving business landscape. Businesses can cherry-pick and customize applications to precisely align with their unique requirements, creating a dynamic and scalable solution. The Dynamics 365 suite includes the following applications:

• Dynamics 365 Business Central
• Dynamics 365 Finance
• Dynamics 365 Supply Chain Management
• Dynamics 365 Sales
• Dynamics 365 Customer Insights (previously known as Dynamics 365 Marketing)
• Dynamics 365 Customer Service
• Dynamics 365 Field Service
• Dynamics 365 Project Operations

Dynamics 365 Finance and Operations, consisting of Dynamics 365 Finance and Supply Chain Management, serves as the direct successor to Dynamics AX, preserving the legacy of comprehensive ERP capabilities. Rooted in the robust Dynamics AX system, Dynamics 365 Finance and Operations seamlessly integrates into the modern Dynamics 365 ecosystem, providing advanced financial and supply chain solutions for businesses of all sizes. While Dynamics AX made way for the cloud-centric approach, Dynamics 365 Finance & Operations ensures continuity for businesses maintaining complex financial and operational processes while embracing the advantages of a cloud-based environment.

To answer the pressing question: What is the difference between Dynamics 365 and Dynamics AX? Dynamics AX is part of the legacy generation of Microsoft’s ERP software, while Dynamics 365 is the next-generation, cloud-based suite of business applications that include both ERP and CRM offerings. Specifically, Dynamics 365 Finance & Operations serves as the direct succesor of Dynamics AX, providing robust ERP functionality within the Dynamcis 365 ecosystem.

In the table below, we provide a clear and concise comparison of key aspects, including deployment models, flexibility, scalability, and integration approaches for AX and Dynamics 365. These differences play a significant role in shaping the functionality and suitability of each system for various business needs. Whether you’re exploring the cloud-based, modular capabilities of Dynamics 365 or the legacy, on-premises strength of Dynamics AX, this comparison aims to help you make an informed decision based on your specific requirements.

The transition from Dynamics AX to Dynamics 365 marks a significant shift in the business software landscape. Dynamics AX is no longer available or supported by Microsoft, while Dynamics 365 stands as the successor and the future-ready solution for modern enterprises. For existing AX customers, Dynamics 365 Finance and Operations is the logical next step, but it is essential to recognize that the Dynamics 365 suite includes a variety of applications that can enhance your business. Thus, evaluating and selecting the right Dynamics 365 applications and modules to meet your organization’s specific needs and future objectives is a critical endeavor.

At Rand Group, we specialize in guiding organizations through this journey. Our experienced team works closely with your strategic and operational teams to understand your unique requirements, objectives, and existing processes. We are dedicated to ensuring that your chosen solution aligns seamlessly with your overall business strategy, integrates with your existing systems, and provides a streamlined user experience. Our team of experts can guide you through:

• Evaluation– We work closely with our clients to understand their unique business goals and challenges. Through in-depth discussions and analysis, we will help you evaluate and select the Dynamics 365 applications and modules that will bring the most value to your organization.
• Migration and implementation– Once the ideal mix of applications is determined, our skilled professionals aid in the migration and implementation process, ensuring a smooth transition with minimal disruption to your operations.
• Integration– The flow of data between various applications is crucial for efficiency and data accuracy. Rand Group can help you integrate different Dynamics 365 applications to ensure seamless communication and data sharing.
• Customization– If you require customizations, our team is adept at tailoring Dynamics 365 applications to fit seamlessly into your organization’s processes.
• Support– We provide ongoing support to ensure that your Dynamics 365 environment remains stable, secure, and up-to-date.

With Rand Group’s expertise, you are not merely selecting software; you are making a strategic investment that maximizes the value of your technology investment. Our goal is to empower your organization for success in the digital era. While Dynamics 365 Finance and Operations may be the direct next step in your journey, we ensure a comprehensive evaluation of other Dynamics 365 applications and modules to determine the right mix that meets your specific needs and future objectives.

The evolution of Dynamics AX into Dynamics 365 Finance & Operations marks a significant shift in the ERP landscape. Understanding the differences between the two is essential for making an informed decision that aligns with your business objectives. By choosing Dynamics 365, you’re not only selecting a supported and forward-looking platform but also gaining access to a wide range of powerful tools that can drive your business to greater heights.

To learn more about the differences between Dynamics AX and Dynamics 365 or for assistance migrating to Dynamics 365, contact us today.