AX 2012 R3 Support Services Terminated: Time to Transition to Dynamics 365 F&O Now!

Oct 17, 2023 Aiswarya Madhu

Choosing the right Enterprise Resource Planning (ERP) system is a pivotal decision for businesses worldwide. With the discontinuation of mainstream support for Dynamics AX 2012, AX 2012 R2, and AX 2012 R3, the transition to a modern ERP solution like Dynamics 365 Finance & Operations becomes imperative. The good news is that Dynamics 365 can be deployed both in the cloud and locally, making it accessible and scalable for a wide range of businesses.

Dynamics AX to Dynamics 365 Transition: Upgrade vs. Migration Explained

Navigating the shift from Dynamics AX to Dynamics 365 involves understanding the fundamental differences between the two platforms. In simple terms, Dynamics AX operates as a desktop application, while Dynamics 365 is primarily a web and cloud-based solution.

As of recent dates, Microsoft concluded mainstream support for Dynamics AX 2012 and R2 on October 9, 2018, and for AX 2012 R3 on October 12, 2021. Extended support ended for AX 2012 and R2 on October 12, 2021, and for AX 2012 R3 on January 10, 2023. So it’s time to plan your transitioning strategies to ensure your businesses’ competitiveness.

Comparison of Dynamics AX and Dynamics 365 F&O
Aspect Dynamics AX Dynamics 365 F&O
Deployment On-premises Cloud-based
Version Upgrades Big reimplementation/migration projects every 5-8 years Continuous upgrades approximately 8 times a year
Usability Desktop or remote desktop connection required Browser-based, accessible from anywhere, any device
Ongoing Support Mainstream support ended on October 12, 2021 (R3 ended on Jan 10, 2023) Continuous support without an end date
Custom Development Custom code applied with overlapping layers Customizations made through built-in extension points
Integrations Limited integration possibilities due to legacy technology Wide range of cloud and on-premises integration options
Licensing Limited flexibility in licensing options More flexible licensing options, including cross-functional licenses and device licenses

Transitioning from Dynamics AX to Dynamics 365 Finance & Operations involves two distinct approaches: upgrading and migrating. While the common term for this move is often an "upgrade," it's essential to understand the differences between these methods, especially if you're a Dynamics AX user.

  • An upgrade entails the conversion of the entire database into the new system, maintaining historical data but potentially leaving outdated information.
  • On the other hand, migration involves selectively moving data, which can be particularly useful if you want to reduce customizations and implement significant configuration changes.

Dynamics AX 2012 R2 or R3 users with minimal customizations can opt for upgrading, while users of older versions like Dynamics AX 2009 or AX 2012 (pre-R2) are better suited for migration. It's important to note that Microsoft's data migration framework primarily converts master data and open transactions, leaving historical data in Dynamics AX or allowing its transfer to a data warehouse via Azure database tools.

Here are the criteria that will help you determine whether you need to upgrade or migrate your Dynamics AX system to Dynamics 365 Finance & Operations.


  • AX2012 R2 or R3: If you are currently using Dynamics AX 2012 R2 or R3 versions.
  • No or Small Customizations: If your existing system doesn't have many custom changes or modifications. In other words, if you've been using Dynamics AX mostly in its standard form without extensive alterations.
  • No or a Single ISV Module: If you haven’t integrated many additional software modules (ISV modules) into your current Dynamics AX system, or if you only have one additional module integrated.
  • Small or Medium Database: If the data in your Dynamics AX database is relatively small or medium-sized.
  • No Fundamental Configuration Changes Needed: If you don’t need to make significant changes to the basic setup and configuration of your Dynamics AX system.


  • AX2009 or AX2012 (before R2): If you are using older versions of Dynamics AX, specifically AX2009 or versions of AX2012 that are earlier than R2.
  • Changes in Financial or Inventory Dimensions: If you need to alter how you track financial information (like changing financial dimensions or your chart of accounts) or if you need to change how you manage your inventory (such as site, warehouse, version, owner, license plate, etc.).
  • Change in Costing Method: If you need to switch the way you calculate costs for your products or services.
  • Large Database (Over 1 TB): If your database size is substantial, exceeding 1 terabyte of data.
  • Want to Reduce or Replace Customizations: If you have extensive custom modifications in your current Dynamics AX system and you want to simplify or replace them.
  • Multiple ISV Products Installed: If you have integrated multiple additional software modules (ISV products) into your Dynamics AX system.
  • Want to Phase in Groups of Legal Entities: If your business operates with multiple legal entities and you want to transition them in stages, rather than all at once.

Read more about Data Migration for Dynamics 365 Implementation

Key Capabilities and Benefits of D365 F&O (Previously Dynamics AX)

Simplified Global Transactions:

One of the challenges in managing multinational operations is handling transactions across different legal entities. Different countries have varied tax laws and rates. Handling transactions involves understanding and complying with these diverse tax regulations. For instance, Value Added Tax (VAT) rates can vary significantly from one country to another, impacting the cost and pricing of goods and services. F&O elegantly simplifies this intricate process. It eliminates the cumbersome entity-switching complexities, making invoice creation and journal entries across multiple legal entities a seamless and error-free process. Your financial team can now operate with unprecedented efficiency and accuracy, no matter how complex your organizational structure.

Automated Currency Management:

Currency handling can be a tedious and error-prone task, especially in the context of international business. F&O takes the reins, automating currency management tasks with precision. From exchange rate calculations to transaction conversions, this automated system ensures that your financial operations are devoid of the errors that often accompany manual currency handling.

Tailored Compliance Solutions:

D365 F&O offers customized financial reporting solutions that align with the diverse regulatory standards across regions (For example, financial reporting standards such as GAAP in the U.S. and IFRS in many other countries). It ensures that your organization remains compliant without the overwhelming administrative burden. With tailored compliance solutions, your financial team can maintain a spotless compliance record, no matter where in the world your operations extend.

Effortless Bank Reconciliation:

Bank reconciliation is a critical aspect of maintaining a clean financial record. However, it often becomes a time-consuming process. F&O simplifies bank reconciliation by automating the matching of bank statement formats. This automation streamlines the reconciliation process and enhances financial accuracy. Your financial team can perform this task with ease, ensuring that your financial records are always in impeccable order.

Robust Auditing Controls:

Preventing duplicate expenses and maintaining financial integrity is a non-negotiable aspect of financial management. Dynamics 365 Finance & Operations (F&O) employs advanced auditing mechanisms, meticulously tracking transactions, monitoring user activities, and detecting data changes. It offers version control, real-time alerts, and customizable audit policies, ensuring comprehensive compliance, security, and accountability in financial operations.

Strategic Budget Management:

Budgeting is at the core of sound financial planning. D365 Finance & Operations empowers organizations to create and manage budgets by offering tools for forecasting based on historical data and predictive analytics. These insights help organizations make data-driven decisions, aligning financial strategies with business goals effectively. Your financial team can navigate budget complexities with confidence, ensuring your financial planning is strategic, precise, and forward-thinking.

Streamlined Customer Account Management:

Managing customer accounts across diverse legal entities can be a logistical nightmare. F&O streamlines this process, facilitating efficient customer relationship management and collections. Automation takes center stage in F&O. Routine tasks, such as invoice generation, payment reminders, and collections, are automated, ensuring timely and consistent communication with customers. Customizable workflows adapt to varying customer needs, ensuring a personalized approach in every interaction.

Flexible Reporting with GER:

Financial reporting shouldn't be a rigid, one-size-fits-all process. F&O offers flexibility through the General Electronic Reporting (GER) feature, allowing adaptable and flexible financial reporting without the need for developer intervention. The GER feature provides the freedom to create, modify, and fine-tune financial reports with ease. It allows you to tailor reports to suit your organization's unique financial processes, goals, and compliance standards.

Accurate Cost Allocations:

Cost allocations, based on percentages or revenue, are simplified with F&O. The system automates this intricate process, reducing manual effort in journal preparation. Whether you're distributing expenses across departments, business units, or cost centers, F&O significantly reduces the manual effort once associated with journal preparation. This means your financial team can trust that cost allocations are accurate and efficient, freeing up time and resources for strategic financial planning.

Read more: 7 Benefits of Microsoft Dynamics 365 That Salvage Your Finance

How Dynamics 365 Finance & Operations Differs from Business Central

Microsoft currently provides businesses with two distinct ERP solutions: Business Central and Dynamics 365 for Finance and Operations.

  • Dynamics Business Central is a comprehensive, all-in-one solution designed for seamless integration with various modules, primarily functioning as a standalone solution.
  • In contrast, Dynamics 365 for Finance and Operations follows a modular approach, allowing businesses to select and add specific functions according to their needs.
Distinctions Dynamics 365 Finance & Operations (D365 F&O) Dynamics 365 Business Central
Organization Size Large Enterprises (>500 employees) SMEs (Small to Mid-sized)
Modules Modular and Selective Add-ons All-in-One System
Total Cost of Ownership Higher and Less Predictable Lower and Predictable
Core Functional Areas Advanced Finance, Operations, Manufacturing, Supply Chain Finance, Operations, Supply Chain, CRM, Project Management
Additional Capabilities HR, Sales, Projects, Customer Service, Through the Broader Dynamics 365 Suite Service Management, Manufacturing, Additional Modules via Premium Packages
Licensing Options and Pricing Unified Operations Subscription ($190/user/month) Full Dynamics 365 Plan ($210/user/month) Essentials License ($70/user/month) Premium License ($100/user/month)

Discover the realm of business solutions with insights into Dynamics 365 Business Central and Dynamics 365 CRM. Explore core CRM functionalities, integration capabilities, and learn when to choose between these platforms.

How Does Nalashaa Help?

Nalashaa Digital specializes in delivering tailored solutions for Dynamics 365 Finance and Operations (D365 F&O), ensuring businesses optimize their operations with this advanced platform. Our dedicated team offers comprehensive services, including

  • Expert consulting to understand your unique business needs.
  • Seamless implementation that integrates people, data, and processes.
  • Efficient integration solutions connecting diverse systems, smooth migration services from existing CRMs, reliable support plans with fixed pricing for continuous assistance.
  • Leveraging the Power Platform for advanced data analysis and automation within D365 F&O.

Case Study: Revolutionizing Charitable Finance with Dynamics 365 for End-to-End Donation Management

In a quest for streamlined financial management, a prominent British charitable organization turned to Dynamics 365 for Finance and Operations, seeking solutions for managing their intricate donation processes and investments. The challenge was to create a seamless Revenue Cycle Management (RCM) system that integrated effortlessly with various administrative and financial workflows. Nalashaa's CRM team, after meticulous analysis, recommended integrating Azure Cloud Service with Dynamics 365. This integration not only streamlined bulk operations but also facilitated unlimited user access, managed numerous donations, handled complex donation splits, and seamlessly incorporated online contributions and investments. Within a mere 10 months, this integration transformed the organization’s financial landscape, ensuring unified operations, enhanced financial performance, and agile event coordination, marking a significant milestone in their charitable pursuits.

Read More about the transformative journey and the seamless integration of Azure Cloud Service with Dynamics 365 in our detailed case study.

Transitioning to Dynamics 365 F&O with Nalashaa Digital

With the discontinuation of support for older AX versions, the need to embrace Dynamics 365 F&O becomes increasingly imperative. At Nalashaa Digital, our focus is simple: helping you seamlessly navigate this transition. With our expert consulting, smooth implementation, efficient integration, and ongoing support, we ensure your journey is smooth. Get in touch with us today.

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