For organizations deciding to extend the life of Microsoft AX to D365 Finance and Operations, it’s valuable to evaluate the comprehensive economic impact of this choice. To offer insights into the return on investment gained from transitioning from Microsoft Dynamics AX to Microsoft Dynamics 365 applications hosted in the cloud, Forrester Consulting carried out a Total Economic Impact (TEI) analysis that elaborated on the benefits that businesses obtained from moving to the most recent Cloud-based D365 Solution.
This blog delves into the motivations behind organizations transitioning from outdated ERPs like Microsoft AX to D365 Finance and Operations. It also offers a concise overview of Forrester’s Total Economic Impact (TEI) study, which assesses the potential return on investment (ROI) achievable by migrating from existing on-premises deployments of Microsoft Dynamics AX to equivalent Microsoft Dynamics 365 applications hosted in the cloud.
The dynamics of change
Before discussing the financial aspects, let’s briefly discuss why organizations are increasingly shifting to cloud-based ERP solutions like Dynamics 365 Finance and Operations.
- Scalability: The cloud offers unparalleled scalability, allowing your organization to adapt quickly to changing business needs. You can scale up or down without the capital expenses associated with traditional on-premises solutions.
- Security and compliance: Forward-thinking companies invest substantially in security and compliance measures, and Cloud-enabled Dynamics 365 offers comprehensive security features. This is especially crucial in an era where data breaches and regulatory compliance are significant concerns.
- Mobility and accessibility: Cloud-based ERPs can be accessed from anywhere with an internet connection, facilitating remote work and global collaboration.
- Cost predictability: Cloud solutions typically operate on a subscription-based model, offering predictable costs and eliminating the need for large upfront investments.
Discovering the total economic impact of migrating from AX to D365
Forrester interviewed four organizations that recently migrated from their legacy, on-premises Dynamics AX solution to Dynamics 365 in the cloud to better understand the benefits, costs, and risks of this investment. Interviewed customers include the following:
The drivers behind the decision for AX to D365 migration
Microsoft Dynamics 365 (D365) is driven by several key factors and business considerations. Here are the primary drivers behind such a migration:
End of support and outdated technology: Microsoft typically announces end-of-support dates for its software products, including Dynamics AX versions. When a version reaches the end of its support lifecycle, it no longer receives security updates, bug fixes, or compliance updates. This can pose significant security and compliance risks for organizations, making migration necessary to ensure system reliability and data security.
Access to new features and functionality: D365 offers a range of new features and enhanced functionality, helping organizations streamline their operations, improve productivity, and stay competitive. These features include advanced analytics, integration with other Microsoft services, enhanced mobility, and more.
Cloud adoption and scalability: D365 is designed for the cloud, providing organizations greater scalability and flexibility. Migrating to the cloud can lead to cost savings, as it eliminates the need for on-premises infrastructure maintenance and allows for more efficient scaling of resources based on demand.
Improved user experience: D365 features a modern, user-friendly interface that enhances the user experience. The improved interface can boost user productivity and satisfaction, leading to better adoption and utilization of the system.
Better integration capabilities: D365 offers robust integration capabilities, allowing organizations to connect more seamlessly with other Microsoft services and third-party applications. This enhances data flow and process automation.
Data analytics and business intelligence: D365 provides advanced data analytics and access to business intelligence tools, enabling organizations to gain insights into their business operations and make data-driven decisions.
Compliance and regulatory requirements: Compliance requirements, such as GDPR and industry-specific regulations, can change over time. D365 offers features and tools to help organizations stay compliant with evolving regulations.
Mobile and remote workforce: With the increasing trend toward remote work, D365’s mobile capabilities allow employees to access critical business information and perform tasks from anywhere, improving productivity and responsiveness.