Unveiling the migration path: How to upgrade AX to D365

August 29, 2023

Microsoft Dynamics AX (Axapta) which was originally released in 2002, has officially retired. It is no longer available to new customers, and enterprises already on Dynamics AX are looking to upgrade their ERP to a new and improved solution with enhanced functionalities, improved user experience, and the latest features that help you stay ahead of the technology trends.  

The transition from Dynamics AX to Microsoft Dynamics 365 Finance and Operations emerges as a pivotal step toward future-proofing businesses and embracing a new era of operational excellence. The decision to upgrade AX to D365 isn’t solely about embracing the present; it’s a strategic move to align with technology trends that promise to shape the future of business operations.  

Are you ready to explore the path to upgrade? This blog serves as a comprehensive guide to the migration path from AX to D365, covering key steps and potential challenges while paving the way for a seamless transition.  

Understanding the Dynamics 365 upgrade process

The Dynamics 365 upgrade process marks a crucial phase in an organization’s technological evolution, demanding careful consideration and meticulous planning. It’s important to understand the difference between upgrading from Microsoft Dynamics AX to Dynamics 365 Finance and Operations and a fresh implementation of D365. The former involves transitioning from an existing AX environment to D365, migrating data, executing configurations, and customizations. On the other hand, a new implementation starts from scratch, necessitating a comprehensive setup of processes, data, and configurations within the D365 framework.

As you are upgrading from AX, this path requires a strong emphasis on planning. Proper planning ensures the upgrade aligns with your organization’s goals, strategies, and specific operational needs. Comprehensive analysis goes hand in hand. It includes a thorough review of your existing processes and customizations and helps identify areas where improvements can be made and where potential challenges might arise. In both cases, a well-orchestrated approach is essential to avoid disruption and minimize risks.  

Preparing for the upgrade

When upgrading from Microsoft Dynamics AX to Dynamics 365 and starting your journey to the cloud, a migration assessment is the first step to understanding the value of the process and how to get there. Nevertheless, a comprehensive assessment of the current AX environment is central to the process. This involves evaluating configurations, data structures, workflows, and any customizations that have been integrated over time.

Assess and clean data

A pivotal element of this assessment is data. Clean and accurate data is the lifeblood of any system, and as such, data cleansing and mapping are of paramount importance. The process involves identifying redundant, outdated, or irrelevant data and rectifying any inconsistencies. Mapping this refined data to the corresponding fields in the Dynamics 365 structure ensures a seamless data migration, preventing errors and preserving the integrity of the information.

Evaluate customizations and integrations

It is equally important to thoroughly review customizations and integrations implemented in the current AX environment. This evaluation helps determine the relevance of existing customizations and whether they can be adapted to the Dynamics 365 framework. Additionally, integrations with other systems must be assessed to ensure a seamless transition without disrupting vital business operations.

Choose the right upgrade strategy

As the upgrade path unfolds, organizations have the choice of pursuing an in-house upgrade or seeking the expertise of a credible Microsoft partner for Dynamics Upgrade Consulting Services. Alternatively, they can opt for staff augmentation services, utilizing off-site, on-site, or hybrid models as per their requirements. This decision should be guided by the organization’s resources, skill set, and the complexity of the migration.

Opt for AX performance tuning assessment

Instead of diving headfirst into the upgrade process, taking advantage of migration assessment offered by Microsoft partners is advisable to evaluate the feasibility of your transition. Confiz’s 1-Week Free Migration Assessment Offer includes an overview of the functional and technical review of your business requirements and system, a determination of the best approach for handling the existing customizations, a recommended upgrade strategy, and a roadmap for a successful migration

How to upgrade AX to D365 Finance and Operations: Standard steps

Here are the standard steps to plan and successfully transition from AX to Dynamics 365 Finance and Operations:

Step 1: Setup Lifecycle Services (LCS)

Begin by setting up Lifecycle Services, Microsoft’s cloud-based collaboration platform. LCS will be your command center throughout the upgrade process, facilitating collaboration, project management, and monitoring.

Step 2: Use the Dynamics AX performance analyzer tool

A Dynamics AX performance analyzer like DynamicsPerf, can help you scan and assess your current AX environment. This toolset is a set of SQL scripts that allows for quick resolution of performance issues on Microsoft products. It identifies customizations, code conflicts, and potential upgrade challenges, helping you plan effectively.

Step 3: Estimate the scope with code upgrade service

The Code Upgrade service in LCS provides insights into code conflicts and potential modifications required for the upgrade. It helps estimate the scope of the code upgrade process.

This step involves taking existing code and converting it into a format that’s compatible with D365 Finance and Operations. Then, it offers feedback on issues that must be resolved before the migration. This assessment offers a baseline of the process to get a cost estimate and project timeline.  

Step 4: Deploy a demo environment

The purpose of developing a demo environment is to replicate the production setup. This environment will be used for testing and validating the upgraded solution before it goes live.

The goal is to evaluate the features in the isolated environment and analyze gaps in the current solution. This exercise will help you create a project plan for the upgrade.  

Step 5: Create a project plan

In this step, you will use the information gathered in the above steps to develop a comprehensive project plan outlining tasks, timelines, responsibilities, and milestones. This plan will serve as your roadmap throughout the upgrade journey.  

Step 6: Switch to the LCS implementation project

Once you have all the information, it is time to move towards execution. Signing up for the Microsoft Finance and Operations account will provide you with all the details you need for signing up for the LCS implementation projects. You will be using this LCS project for the lifetime of your subscription.

Transitioning your project to the LCS implementation project will offer a structured approach to manage the upgrade process.  

Step 7: Mark your project as an AX upgrade

Label your LCS implementation project as an “AX upgrade”, specifying the version that you’re using. Doing this will ensure the onboarding wizard walks you through the entire upgrade process.  

Step 8: Work on the preparation tasks

Work on the tasks flagged by the Dynamics AX performance analyzer. These are normally handled by the database admins.

Step 9: Perform code upgrade

Execute the code upgrade process as per the guidance provided by the Upgrade Analyzer and Code Upgrade service. This involves modifying existing code to align with the new platform.

Step 10: Develop new code

As part of the upgrade, develop any new code required to address changes in functionalities and customization.

Fill in the gaps that were identified in the demo environment. Split your time between configuring processes from AX and customizing new features you want to incorporate into the processes or workflows.  

Step 11: Perform the data upgrade

Once you are done performing the upgrade tasks, it is time to tackle your first database upgrade. This is an initial upgrade that will take place in the development environment. This makes it easier to ID and fix issues in the codebase.  

Step 12: Perform testing

By this time, you would want to run cutover functional testing to ensure the new system is up and running before you officially let AX go. Rigorously test the upgraded solution in the demo environment. This includes functional testing, user acceptance testing, and performance testing to ensure everything is aligned with the plan.

Step 13: Pre-go-live checklist

Create a comprehensive pre-go-live checklist covering all upgrade aspects, from technical validations to end-user training.  

Before going live, go through the pre-launch checklist to ensure you haven’t overlooked anything. It is recommended to freeze the code and configuration changes to prevent last-minute fallout.

Step 14: Deploy

Once testing and preparations are complete, deploy the upgraded solution to your production environment. Monitor closely post-deployment for any issues and address them promptly.

Common challenges that may arise during AX to D365 migration  

An ERP data migration process can take several months, depending on the size of your organization. Even with meticulous planning, you might still face challenges during the upgrade. Some common challenges to watch out for include:

  • Data complexity and cleansing: Migrating data from AX to D365 can be complex due to differences in data structures and formats. Ensuring data accuracy, cleansing, and mapping can pose challenges that require meticulous planning.
  • Customization compatibility: Existing customizations in AX may not seamlessly translate to D365 due to architectural differences. Adapting or redeveloping customizations to fit D365’s framework can be time-consuming and resource-intensive.
  • Integration disruptions: Integrations with other systems, such as CRM, or third-party applications, can be disrupted during migration. Ensuring that integrations continue to function as expected in the D365 environment requires careful attention.

Address the challenges with post-go-live testing

In the journey from Dynamics AX to D365, you’re not just upgrading software; you’re stepping into the future of business technology. As you chart this path, strategic planning and overcoming challenges are essential. Your organization aligns with digital evolution, enjoying enhanced functionalities and seamless experiences.

Post-go-live testing is the sentinel that guards the integrity of your upgrade. Ensuring that every facet operates flawlessly and adheres to the orchestrated plan is imperative. Moreover, change management emerges as a guiding light through the transition. Properly communicating the benefits of this transformation to your teams and aligning them with the change is pivotal for a smooth transition.

To navigate this transformative journey effectively, choosing a credible Microsoft partner’s Dynamics 365 Upgrade Consultancy Services is a strategic step. These services offer a safety net of expertise, ensuring that the transition is seamless and well-supported at every juncture.


The migration from Dynamics AX to D365 represents a significant leap toward embracing the future of business technology. Beyond the technical aspects, it’s a strategic move that aligns your organization with the digital transformation objectives. By following a well-structured migration path, overcoming challenges, and focusing on the benefits, your organization can smoothly transition to D365 and unlock its full potential. Remember, it’s not just an upgrade—it’s an opportunity to revolutionize the way you do business.

Ready for an upgrade? We at Confiz stand as your trusted implementation partner. Our expertise in Dynamics 365 upgrade can guide your organization through this metamorphosis, ensuring a successful transition that unlocks the full potential of D365. Reach out to us at marketing@confiz.com and let’s embark on the path to revolutionizing the way you do business.