Business system migrations are complex, time-consuming projects... so when the system everyone’s telling you to upgrade to is similar to the one you have currently, you might be wondering if it’s even worth the effort.
To help you decide whether the upgrade is worth it before you commit to it, this blog will cover the similarities and differences between on-premise Dynamics AX and Dynamics 365 in the cloud. By the end, you’ll see which might be better for your business.
Here’s what we’ll be discussing. Feel free to click on anything in the list to skip directly to the relevant section!
Arguably one of the biggest differences between Dynamics AX and Dynamics 365 is their infrastructure. Dynamics AX is traditionally on-premise so installation is required. You’re also responsible for setup, maintenance and security - including costs.
However, you can host the system on your own on-site servers - a great bonus for businesses who might require military-grade security standards and complete control over their data.
There’s a private cloud option too, if you want the flexibility that comes with cloud-based systems but control over your data. Like with on-prem, installation is still required and setup, maintenance and security are in your hands.
Dynamics 365 is hosted in Microsoft’s cloud service, Azure. The system will still need to be deployed but it’s largely an automated process. Plus, there’s no need to buy, install or maintain any servers - Microsoft will take care of it.
As a result, cloud-based SaaS infrastructure tends to be the preferred option. It’s convenient, simple, scalable and more. Read more about how cloud SaaS compares to on-premise systems here.
It’s important to stay on the latest software versions, even if you’ve not experienced any security breaches (that you know of) and your team are comfortable using your current software. There are many dangers associated with running old Microsoft Dynamics systems and updating to the latest version will resolve much of that.
However, with on-premise systems, updates tend to be manual. This can be a very tedious and lengthy task as you’ll likely require new software implementation if there isn’t a direct upgrade path. For example, if you’re moving from Dynamics AX 2009 to D365. This is also the case if your system has been heavily customised.
In contrast, Dynamics 365 features automatic updates. These are pushed out monthly across your entire system. That means:
Although we’d recommend you stay on the latest versions wherever possible, you might need some buffer time in-between versions - for example, if you need to get your team on-board. This is another great thing about Dynamics 365 - you also have the option to pause up to three continuous updates. Just resume when you’re ready.
One of the first things you might notice when you switch from Dynamics AX to Dynamics 365 is the user interface. With Dynamics AX, you launch the system from a desktop and work within the program. This is standard for most on-premise ERP systems but the modern ERP user requires a little more flexibility.
This is where Dynamics 365 reigns supreme. With D365, access is totally browser-based so you can work anytime, anywhere and from any device. Perfect for users who want/need to work on-the-go. All you need is a device that has an internet connection and a browser installed.
Another feature that shows off just how user-friendly Dynamics 365 is compared to Dynamics AX is the navigation. With Dynamics AX, to get to a particular page, you need to follow a specific menu path. With Dynamics 365, you can do this and add pages to ‘favourites’ so it’s easier next time or use the search bar to type in the page you want.
Another big drawback of using outdated Microsoft systems (or any kind of business system, for that matter)? Mainstream support may longer be available. For example, support for Dynamics AX 2009, 2012 R2 and R3 ended in October 2018. Only security hotfixes are being provided and this is only until 12 October 2021.
Do you really want to continue using the same system and features forever? And are you prepared to risk having no access to mainstream support? That’s like leaving your car unlocked with the keys still in the ignition.
With Dynamics 365, not only can you access complimentary support from Microsoft but automatic updates are also released regularly. Large changes are delivered as parameters/configuration keys and you can actually choose whether you want to turn the functionalities on. Great if you’re not a fan of the new changes and want an up-to-date system that looks like your previous version.
When it comes to ERP implementation, you don’t have to stick with the out-of-the-box option. You might require some degree of customisation to meet specific business needs.
With Dynamics AX, custom development is applied using the over-laying method where different sets of the code are layered on top of each other within the ERP. Sometimes, compatibility issues can occur when the code is merged. If this happens, you’ll need to adjust your code before the system is deployed.
With Dynamics 365, custom development is applied via the extensibility model. This means you can’t edit the core code of the ERP like you could with Dynamics AX. Instead, you’ll need to customise via built-in extension points.
This reduces the risk of compatibility issues (because you’re not tweaking the core code) but you can only customise objects that have extension points. However, it’s not the end of the world if your chosen object doesn’t have an extension point - you can request them from Microsoft and they’re usually included in future updates too.
So, despite the potential inconvenience of having to contact Microsoft to customise your ERP as opposed to customising as and when, most businesses prefer the extensibility model. Why? Because the risk of compatibility issues is significantly less.
Dynamics 365! Sure, you might need to commit to a time-consuming, potentially complex implementation project (in which case, you should consider outsourcing to a partner) and there might not be a direct upgrade path. But, you’ll benefit from simplified infrastructure, automatic updates, an intuitive user interface, access to mainstream support, ability to scale with ease and more.
If you’d like to share the knowledge from this blog with your co-workers or your boss, why not check out the short comparison guide on the differences between the two ERP systems? It’s basically a snappier version of this blog and you can view the features of Dynamics AX and Dynamics 365 side-by-side.