Your complete Dynamics AX upgrade guide

With support ended for Microsoft Dynamics AX, upgrading to a next-step solution is a strategic opportunity to implement a new system that optimizes business processes for profitable growth. As enterprise organizations face growing risks tied to legacy systems, the move to a modern ERP platform like Dynamics 365 Finance & Operations offers the chance to streamline processes, enhance agility, and future-proof your business. This comprehensive guide is designed for IT and finance leaders who want to understand the full scope of the Dynamics AX upgrade process, from technical differences and migration paths to cost considerations and common challenges. Whether you’re on Dynamics AX 2009 or Dynamics AX 2012, this resource will help you plan a smart, successful transition.

In this guide we will explore the following topics:

• Current state of Dynamics AX
• Key differences: Dynamics AX vs Dynamics 365 F&O
• Total cost of ownership: Dynamics AX vs D365 F&O
• Benefits of upgrading to Dynamics 365 Finance & Operations
• Dynamics AX upgrade options
• How long it takes and how much it costs to upgrade to Dynamics 365
• Common upgrade problems
• Benefits of partnering with Rand Group for your upgrade

Microsoft has ended support for legacy Dynamics AX ERP. Dynamics AX 2009 SP1’s extended support was officially extended to April 12, 2022, and Dynamics AX 2012 (including RTM/R2) was likewise supported only through April 12, 2022. The last Dynamics AX version, Dynamics AX 2012 R3, exited extended support on January 10, 2023. In practical terms, organizations still on Dynamics AX 2009/2012 now face no new hotfixes, security updates, or official support. If you are still operating on Dynamics AX, it is time to consider an upgrade or migration, as remaining on an unsupported Dynamics AX platform carries significant operational and compliance risks. Companies still using Dynamics AX are recommended to upgrade to Dynamics 365 Finance & Operations, which is the successor to Dynamics AX. Our expert Microsoft consultants can help your team navigate this upgrade change. With two decades of experience implementing ERP systems, we have the expertise to help you select and transition to your next solution with ease.

One of the most important steps in planning your Microsoft Dynamics AX upgrade is understanding how Dynamics 365 Finance & Operations differs from legacy Dynamics AX versions. From deployment model to customization approach, the changes are significant but beneficial.

The shift to Dynamics 365 Finance & Operations can dramatically alter your total cost of ownership (TCO) profile. On-premise Dynamics AX requires significant capital outlays: servers, storage, networking and facilities all must be purchased and maintained. Costs associated with on-premise solutions add up fast. You are responsible for physical servers, hosting, preventative maintenance, and often require an on-site IT team for support. In contrast, migrating to the cloud moves those costs off your balance sheet. Your total cost of ownership is lower over time with a cloud-based application where computing and licensing costs are covered in your subscription pricing.

• Licensing vs. subscription: Dynamics AX’s CAPEX model often comes with high initial licensing fees, whereas Dynamics 365’s SaaS model spreads costs out monthly. Over a 5-year horizon, a Dynamics 365 subscription may total more in license fees, but it includes all upgrades and hosting.
• Infrastructure & maintenance: An on-premise Dynamics AX TCO budget must account for server hardware, backup/disaster recovery, power/cooling and ongoing system maintenance. In the cloud model, Microsoft covers physical infrastructure and system maintenance. You trade capital expenses for a predictable subscription.
• Upgrades & support: Dynamics AX customers historically pay extra for major version upgrades or custom support; this is especially true now that Dynamics AX is out of support. Dynamics 365 subscribers receive continuous feature updates and security patches as part of their subscription. Microsoft handles database and application hosting, freeing the customer from downtime risks. In short, many Dynamics AX overhead costs (hardware, power, occasional upgrade projects) become Microsoft’s responsibility under D365, reducing your long-term TCO.

Overall, customers frequently find that Dynamics 365’s operational model lowers the 5 year TCO compared to staying on Dynamics AX. Dynamics AX’s biggest costs (hardware, upgrade projects) are essentially eliminated or bundled under D365, yielding significant lifetime savings.

In addition to lower total cost of ownership upgrading to Dynamics 365 Finance & Operations offers many compelling advantages over legacy Microsoft Dynamics AX:

• Automated updates & modern features: Dynamics 365 delivers two major cloud releases per year plus monthly platform updates. These are applied automatically so you always have the latest functionality. By contrast, Dynamics AX required manual patching. In practice, this means no more expensive upgrade projects and rapid access to new features.
• Improved efficiency & productivity: New UX and process automation boost user productivity. Migrating to D365 F&O can improve staff efficiency by up to 50% and enhance overall operational flexibility. With more of your processes automated, you cut the likelihood for errors, saving your team valuable manual processing time. With D365 Finance and Operations users gain streamlined, browser-based workflows (including mobile access), so employees can do their jobs faster and collaborate better.
• Built-in AI & intelligent insights: Dynamics 365 includes embedded Copilot AI capabilities, offering predictive forecasting, intelligent automation, and conversational interfaces that enhance decision-making and streamline repetitive tasks. These AI-powered tools deliver real-time insights and reduce manual effort—capabilities that legacy Dynamics AX systems simply can’t provide.

• Scalability & business continuity: The Azure cloud platform provides built-in high availability and disaster recovery. Unlike on-premise Dynamics AX, where hardware failure can be catastrophic, D365 F&O ensures business continuity, so your system will stay up and running even during difficult times. You can also easily scale compute power and storage as your business grows without new hardware purchases.
• Security & compliance: Microsoft invests heavily in security. Dynamics 365 F&O has robust data protection, encryption, and compliance certifications out of the box. You reduce security risks compared to maintaining outdated on-prem servers, and you gain tools like Azure Active Directory for advanced identity management.
• Integrated analytics & intelligence: Dynamics 365 is built for the modern data-centric enterprise. It includes tight integrations with the Power Platform: for example, every D365 record can be hooked to Power BI for real-time dashboards, and you can create Power Automate workflows or custom Power Apps linked to your finance data. This means better insights and smarter processes than traditional Dynamics AX alone could provide.

Legacy Dynamics AX customers have two primary paths to modernize their ERP: upgrade or reimplement on Dynamics 365 Finance & Operations. Each path has distinct considerations based on your current system version, level of customization, and business goals. Understanding these options is key to making the right long-term decision.

• Dynamics AX 2009 to D365 upgrade: If you’re on Dynamics AX 2009, or any unsupported pre-2012 version, there is no direct jump to D365. You must first perform a Dynamics AX 2009 upgrade to Dynamics AX 2012 R3 (the last on-prem release) because Microsoft’s migration tools only support Dynamics AX 2012. In other words, Dynamics AX 2009 customers face a two-step upgrade: first migrate to Dynamics AX 2012 R3, then follow the Dynamics AX 2012 to D365 path. 
• Dynamics AX 2012 to D365 F&O upgrade: If you are already on Dynamics AX 2012 R2 or R3, you can move directly to D365 Finance & Operations. Rand Group has proven methodologies for this migration. The process involves extracting data, converting custom code, and deploying a new D365 environment. Training and user adoption are critical parts of this option. Rand Group’s migration methodology includes extensive user training so that your team can maximize their ROI on first day of use.

For most organizations—especially those with significant customizations, outdated processes, or limited documentation—a reimplementation is the best way to fully realize the benefits of Dynamics 365. Rather than carrying over legacy inefficiencies, this approach allows you to design a future-ready ERP from the ground up, aligned with current business goals and industry best practices.

A reimplementation offers the cleanest break from technical debt and ensures you take full advantage of D365 Finance and Operation’s modern capabilities. While it requires more upfront planning, including data migration and process redesign, the long-term return is greater in terms of agility, scalability, and user adoption. Rand Group strongly recommends this path for organizations looking to transform—not just migrate—their ERP environment. With our proven methodology and deep platform expertise, we guide you through every phase of the reimplementation for a smooth, strategic transition.

While upgrades can be faster and less resource-intensive in the short term, they can also carry your current system challenges forward. Reimplementation, on the other hand, offers a clean slate, allowing your business to:

• Adopt new best practices instead of replicating outdated processes.
• Simplify your ERP architecture and reduce system sprawl.
• Increase performance and maintainability by eliminating unnecessary customizations.
• Better leverage AI, automation, and analytics native to Microsoft D365.

By re-evaluating your business requirements during reimplementation, you position your organization for long-term success. But you do not have to face the reimplementation project alone. With our Microsoft consultants by your side you’ll have access to strategic guidance, implementation expertise, and deep industry knowledge, ensuring you make the most of your investment in D365 Finance & Operations.

Upgrade timelines and costs vary widely based on company size, complexity of customizations, and data volume. A small or mid-sized upgrade project (light customization, modest dataset) might take on the order of 6–9 months. Large enterprises with heavy custom development often see projects of 12–18 months or more. Budget estimates likewise vary depending on the company and project size. Key cost drivers include the effort to refactor code, migrate data, test integrations, and train users.

In general, plan for a multi-phase project: assess & plan, code/customization upgrade, data migration, testing, and go-live. Microsoft’s Upgrade Accelerator tools can help estimate effort, but real-world timelines should build in ample testing and validation.

Upgrading from Dynamics AX to D365 can be challenging in several areas:

• Legacy custom code: Dynamics AX customers often have years of customizations and third-party add-ons. Converting Dynamics AX overlays into D365 extensions requires careful redevelopment and testing. Plus, if code isn’t properly merged it can introduce significant risk. Our expert Microsoft consultants can audit custom code, drop obsolete features, and rebuild necessary extensions – a process that takes time and specialized skills.
• Data quality & migration: Historical data must be cleaned and mapped to D365 tables. Large or fragmented databases can make migration lengthy. Planning for data validation, archiving old data, and doing multiple dress rehearsals is critical to avoid surprises.
• Integration and add-ons: Any integrations with other systems (CRM, warehouse, manufacturing, etc.) need review. Interfaces built for Dynamics AX may not work with D365 without modification. Similarly, ISV solutions or custom modules built for Dynamics AX might not have D365 equivalents, requiring replacement or redevelopment.
• User training: New user training and user adoption are essential. The transition from Dynamics AX to D365 often means new processes or UI changes; ensuring user adoption can be a major challenge. We offer flexible training packages to ease this transition that fit into your schedule and serve your unique business needs.

Recognizing these challenges early and working with experienced implementers that offer Dynamics AX 2012 to Dynamics 365 upgrade services, like Rand Group, can mitigate risks and ensure a successful application adoption across your business.

Rand Group brings deep expertise and services to smooth your Dynamics AX upgrade. As a Microsoft partner with longstanding ERP experience, we offer:

• End-to-end migration services: Our consultants have a proven methodology to migrate Dynamics AX to Dynamics 365 Finance & Operations. Our team will assess your current Dynamics AX environment, plan the upgrade or reimplementation strategy, and execute data and code migration with minimal downtime.
• Support & training: Beyond the upgrade itself, we offer comprehensive support for both legacy Dynamics AX and new D365 environments. Our experts provide ongoing maintenance, help desks, and training so your team can quickly become productive on the new system. We include guidance on best practices and streamlined user adoption.
• Custom development & integration: Our D365 experts are skilled at re-implementing Dynamics AX customizations as D365 extensions and integrating D365 F&O with other business systems (CRM, analytics, reporting, etc.). We can build custom features or leverage the Power Platform to meet your unique requirements.
• Cloud migration expertise: If you’re moving to the cloud, our cloud migration specialists can promise a smooth cutover. We focus on maximizing business benefit while minimizing disruption. Plus, our team we will assist you in taking advantage of current Microsoft promotions to lower your initial cost.

In short, Rand Group can guide your organization through every stage of the upgrade, from initial planning to long-term optimization, drawing on proven tools and best practices. Our combined finance/ERP knowledge and technical skill help ensure your migration is on time, on budget, and fully aligned with your business goals.

Now that Microsoft has ended support for legacy Dynamics AX, decision makers must consider next step solutions for continued business success. In Dynamics 365 Finance & Operations, Microsoft has provided a great next-step solution for users to upgrade to, but that transition can be tricky. Working with a trusted Microsoft partner like Rand Group can help remove the upgrade burden from your team. Our highly skilled D365 F&O consultants have the expertise your team needs for a successful transition that optimizes your business practices with limited disruption to your day-to-day operations. Contact our team today to discuss your next step options and to start your upgrade journey.