Dynamics 365 Migration Guide

Migrating to Dynamics 365 can transform your ERP capabilities, but it’s a unique journey that requires thoughtful planning and preparation. In this guide, we’ll cover key practices, from initial evaluations to final testing, to help you navigate this process smoothly.

Moving to D365 is a transformative move that enables organizations to streamline processes, leverage cloud advantages, and enhance team collaboration. But every migration journey is unique. Even two companies within the same industry, selecting the same Microsoft stack, will likely have different migration experiences due to distinct operational needs, existing systems, and data requirements.

In this Dynamics 365 migration guide, we’ll explore essential steps and best practices to help you prepare for a successful migration—from assessing your current ERP system to selecting the right migration path.

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Step 1: Evaluate Your Current ERP System

“Failing to address business requirements and process flows early on can undermine the entire migration,” advises Senior Consultant Nicholas DiAngelo. To avoid this, it’s crucial to conduct a thorough review of your current ERP setup, identifying what works, what doesn’t, and what needs improvement.

Consider the following:

Document Current Processes: Review data sources, apps, integrations, and workflows in your current system. Identify areas causing inefficiencies, such as information silos or misaligned data flows.
Interview End-Users: Gather insights from daily users of the system to understand their experience. Where are they facing challenges? Which processes take too long? What improvements would they like to see in the new system?

For users with Dynamics AX or CRM, Microsoft’s built-in assessment tools can provide further insights, covering:

Functional & Business Assessment: Understand your customizations, ISV solutions, and areas where new capabilities can add value.
Technical Assessment: Evaluate existing code for use in the new system, estimate development efforts, and obtain a migration summary.
Upgrade assessment summary. Recommends a migration path based on your current solution, provides a rough timeline, a list of resources and the standard migration tools you should use throughout the process.

Users migrating from NAV, GP, or SL are not eligible to use this tool. As such, they may need to spend more time scoping the project, setting a budget, and establishing a timeline.

Those upgrading to Dynamics 365 Finance & Supply Chain Management gain access to several tools via LCS that provide a more granular needs assessment. Think—upgrade analysis, customization analysis, subscription & infrastructure estimators, etc.

Step 2: Leverage Dynamics 365 Functionalities

New Dynamics 365 functionalities enhance unification, visibility, and process alignment across your organization. Rather than replicating outdated processes, explore how these tools can streamline workflows, address pain points, and capitalize on emerging opportunities.

For instance:

Power BI for Microsoft Teams and Microsoft 365 can improve remote collaboration, automate workflows, and identify productivity enhancements.
IoT Data in Business Central enables real-time inventory management and predictive forecasting, optimizing cash flow and warehouse space.
Low-Code App Development: Using Power Apps, Power Automate, and other tools, organizations like Toyota North America empower employees to create their own business solutions, establishing a Center of Excellence for sharing knowledge across teams.

When evaluating options, align every choice with real-world scenarios and objectives.

“Prepare a list of requirements, pain points, and business objectives and present them to your implementation partner. They’ll help you understand all available options and plan your deployment approach.” – Sandeep Chadhury, Consulting Manager

Step 3: Select a Migration Path That Aligns with Your Business

Migrating to Dynamics 365 varies based on the legacy system you’re transitioning from. Each ERP has different migration paths, so understanding these differences helps define the right approach.

NAV to Business Central: This two-stage migration first moves data to an on-prem version of Business Central, then to the cloud.
SL & GP to Business Central: Primarily a financial data migration, often integrated with other ERP solutions.
AX to Dynamics 365 Finance & Operations: Offers advanced tools via LCS for migrating data, code, and customizations.

Differences between on-prem and cloud systems, such as programming languages and data structures, also impact your migration strategy. Older ERP versions may introduce additional complexities, especially in identifying, mapping, and cleaning data for migration.

Once you’ve mapped your data and cleaned it up, the next step is ensuring your migration goes smoothly through rigorous testing and validation.

Step 4: Map & Clean Data

Effective data migration hinges on detailed mapping and thorough cleansing. While it’s tempting to move all legacy data to the new system, this often leads to unnecessary clutter.

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Data Mapping: Determine who owns, uses, and requires each data set. Document sources, configurations, ISV solutions, and add-ons, and identify any non-transferable data.
Data Cleaning: Data cleansing reduces redundant, inaccurate, or outdated records, ensuring that only high-quality data enters the new system.

“Customers think they want all their data migrated. But, what you’re doing is, you’re bringing data from your current system into the data lake. So, the issue is they’ll still need to sort through their old data lake data later on, then decide what they want to do with it.” – Jeff Suwyn, Product Manager

You’ll want to create a map containing the following components:
• Data sources
• Customizations
• Configurations
• Data
• Code
• ISV solutions
• Add-ons

You’ll also need to identify what you can’t bring with you to the new system.

Step 5: Test & Validate the New System

Sandeep Chadhury says, “lack of data validation, inadequate UAT testing, and lack of user interest in learning the new system” can all cause a migration to fail.

Here are some steps you can take to ensure that doesn’t happen:

Create test scripts. To ensure all processes align with team objectives and the big-picture plan, you must analyze them against several different scenarios. That means, you’ll need to define test cases and come up with test scripts based on the business requirements associated with different scenarios.
Configure test environments. If you’re migrating to Business Central, you can set up a sandbox environment using Visual Studio. F&O users will configure testing environments via LCS.
Run test scripts in the new environment. The goal here is ensuring that everything performs according to plan. Identify issues or areas for improvement and estimate what it’ll take to make those adjustments.
Conduct CRP sessions. Conference room pilot sessions are used in project implementations to test normal use cases in the new system to identify people, processes, problems, solutions, and standard best practices.
User Acceptance Testing (UAT). UAT combines training and testing and aims to help you determine whether the migration aligns with system requirements. Have end-users check for missing data, confirm that legacy and cloud fields match, and test workflows to ensure they’re working as planned. Users must also sign off on each test case before pushing the code to production (indicating everyone is in agreement.
Test plugins & third-party integrations. You’ll want to make sure they’re both secure and compatible with the rest of the system. If you’re using F&O, the automated testing tool can catch any issues with your code or customizations.

“Validate data before the upgrade, after the upgrade, and continue to explore new ways to work with that data.” In other words, testing should be a continuous process. – Lorna Link, Practice Director – BC Express

Partner with Experts for a Successful Migration

While it’s not an official step in the migration process, it’s a good idea to get a certified Microsoft partner involved early in the game. Especially if your current system is a barrier to achieving your organization’s strategic goals.

“Hire an experienced partner. They’ll help you make an informed decision about how you’ll approach the process. Or help you determine whether it makes sense to “lift and shift” without changing existing processes. Or–whether full-scope implementation will better align processes with evolving business goals.” – Rob Urbanowicz, VP of Enterprise Services

Dynamics 365 migration is complex, and Velosio’s expert guidance can ensure a smooth, efficient process. With certified Microsoft partners, you gain the advantage of fast troubleshooting, expert solutions, and minimized post-launch risks—allowing your team to focus on driving strategic goals forward. Want to talk with our team of experts? Contact us.