Migrating to Dynamics 365 in the Cloud from On-Premises

The cloud hardly feels disruptive in an era dominated by AI and big data.

After all, migrating from on-premises hosting to the cloud has been an urgent matter for years—a critical first step in any digital transformation journey.

COVID has further solidified the cloud’s place in the IT stack. We’ve seen organizations scramble to meet the needs of newly remote employees, as well as customers looking for better digital products and experiences to cope with the same challenges.

In this final stretch of 2021, we’re seeing more organizations move on-premises applications into the cloud—in part, due to incentives from legacy software companies like Microsoft to migrate to new, cloud-based versions of old business tools.

In these next few sections, we’ll explain why Microsoft users need to perform a Dynamics 365 On-Premises to cloud migration ASAP and what they stand to gain from the move.

Why Migrate D365 from On-Premises?

For starters, the cloud is essential for business growth—and survival.

According to IDC’s The Impact of Digital Transformation During Times of Change report, digital transformation initiatives like integrating customer touchpoints, operationalizing data, and gaining a 360-degree view of the customer became top priorities due to the pandemic. All priorities in that report (check out fig. 4) fall apart without the cloud.

A recent Algorithmia survey found that 83% of respondents are increasing spending on AI significantly, with 76% reporting that AI/ML is a bigger priority than all other IT initiatives post-COVID.

The findings also point toward a sense of regret among participants. 43% said AI/ML initiatives matter far more than they initially thought, while nearly a quarter said AI/ML should have been a priority much sooner.

The point is, organizations need cloud services to leverage technologies like AI/ML, IoT, and advanced analytics that help them compete.

It’s hard to move fast and make good business decisions when your data lives in different systems—and brands are starting to face the consequences of avoiding the cloud.

Aside from the digital transformation pressures prompting organizations to migrate, Microsoft is retiring on-prem AX and CRM platforms. Come October 2021, Microsoft will discontinue mainstream support for both platforms.

Key Benefits of a Microsoft Dynamics 365 On-Premises to Cloud Migration

As we just mentioned, much of what your Dynamics 365 on-premises to online migration is about is remaining competitive, building a more “agile” business. But, as Velosio CSM, Lawrence Edwards points out, the benefits of cloud migration are relative to your situation and business goals.

“Generally speaking, the benefit of D365 cloud migration is you’ll have a secure, extendable, accessible platform that allows you to grow your business in a connected ecosystem.” – Lawrence Edwards, Customer Success Manager

But—if you’re looking to get more specific, here’s a look at some of the biggest benefits of moving to the cloud:

Bring All Data Into One Central Location

Migrating to Dynamics in the cloud also provides complete visibility into your business—no matter how many locations are in the mix or whether your teams are working remotely.

With reporting tools that feature Power BI, predictive analytics, and artificial intelligence, organizations get an agility boost—enabling faster, data-driven decision-making.

Consulting Manager, Sandeep Chaudhury advises organizations to “take advantage of the Power Platform. Users can access business data right out-of-the-box–from anywhere with Power BI. Right away, you can take powerful actions and stay in the loop—allowing you to start making improvements to high-impact areas.”

You’ll have a high-level view of your entire company, your customers, and the competitive and economic forces influencing customer behavior, needs, and expectations.

You can also unlock new business models and improve forecasting efforts. Or optimize project management and inventory planning for cost-savings. The list goes on.

The point is, when you’re working with on-prem solutions, teams can easily end up working with static reports loaded with old, incomplete, or inaccurate data. Which, in turn, undermines the entire business strategy.

It’s also worth noting that, even in cases where teams do have great data in their on-premises systems, they often have trouble accessing and acting on insights fast enough to keep up with competitors.

This, of course, becomes a bigger issue when workers are spread across multiple locations or are working remotely.

Cost Savings

Implemented correctly, Dynamics 365 online stands to slash operating costs associated with labor, equipment, warehouse space, admin, deployment, and so on. Instead, it’s on Microsoft to handle updates, security, and routine maintenance.

“Migrating to D365 reduces TOC, system complexities, and technical debt.” – Rob Urbanowicz, VP of Enterprise Services

According to a Forrester Total Economic Impact report organizations that made the move to the cloud were able to:

• Reduce the TCO by an average of 10.25%
• Slash deployment costs by 30-50%, on average, compared to on-premises customers
• Save ~40% on administrative expenses like server backups, storage use, restorations, and software updates

They also saw additional savings on disaster recovery costs, hardware, and storage management.”

“Application lifecycle management is much better, efficient and cost-effective. You’ll gain access to the latest features faster and have an easier time with implementations. – Sandeep Chaudhury, Consulting Manager

Better Security

Microsoft Dynamics 365 offers more robust security than on-prem ERP solutions.

Yes, really.

The cloud is now much more secure than analog solutions and most on-prem options.

Sure, you’ll still find plenty of “hard copy holdouts.” But things have changed since the early days of the cloud.

Part of the reason is that legacy giants like Microsoft, IBM, and Amazon got into the cloud game and built solutions for businesses operating in healthcare, financial services, and the public sector.

Cloud solutions like Microsoft Dynamics make it easier to control where your data is stored, who has access, and what resources your business is using at any given moment.

Migration can reduce the risk of ransomware attacks and data breaches and provide greater data security. Users also benefit from more control over who has access to the system and how sensitive information is processed and stored.

This is critical in a moment where we’re seeing more high-profile hacks targeting private organizations.

We’ve reached a point where it’s become a significant risk for companies to manage cybersecurity on their own–the costs of getting it wrong can be devastating. All it takes is one exposed endpoint or missed update and hackers can get into your system and wreak havoc.

According to the NTT Global Threat Intelligence report, traditional (read: legacy) approaches are inadequate against modern threats. Organizations need to reimagine their cybersecurity strategies and become more proactive and adaptive, rather than reacting to new regulatory requirements and threats. Unfortunately, this isn’t possible without the cloud.

Optimize IT Resources

In a Dynamics 365 on premise to cloud migration, existing database administration resources can be reallocated to other areas within your organization–where they’ll be better positioned to focus on new priorities that drive business value.

For example, if you’re migrating from Dynamics AX or CRM to the cloud, all on-prem servers currently hosting those programs can be retired. Which means, all resources currently being used to manage them can be reallocated to

Keep in mind—redirecting IT resources itself requires a significant amount of strategic planning.

According to Gartner, CIOs should reevaluate their current use cases to better optimize tech investments and focus on identifying new opportunities to invest in the innovative solutions that will carry them into the future.

Another report from McKinsey provides some suggestions—including identifying new business models unlocked by cloud technologies, looking for ways to improve the customer experience, and reinvesting cost savings into new revenue streams.

“Microsoft Dynamics 365 allows companies to increase cloud revenue. It also provides easy-to-manage environments via Life Cycle Services (LCS) and streamlines integration with Power Automate.” – Sasidhar Dhruva, Project Lead System Administrator

For businesses looking to reallocate existing IT resources, it’s important to look beyond available resources and identify opportunities where D365 can save you time—time better spent understanding customers and developing innovative solutions that align with their needs.

Anywhere Access

Arguably the most tangible benefit of migrating to the cloud is the ability to access data/business tools from any device or location/move seamlessly between laptops, tablets, smartphones, and desktops without losing critical data/hours of work.

The cloud is a must-have in the age of remote work, distributed teams, and global partnerships. Not to mention the continued uncertainty brought on by the pandemic. And more recently, the rise of the Delta variant and breakthrough COVID infections.

It’s also important to recognize that even if your organization is a strictly in-person operation, on-prem hosting still won’t cut it.

If you have multiple locations–even multiple buildings on the same campus, external partners, or sales & field service reps that visit clients in-person, cloud-based business tools are essential.

They enable collaboration and ensure that every person on your team is working with the same information.

Final Thoughts

Look, some people are motivated by the possibility of a brighter, more profitable future, others act out of fear—it’s a mindset thing.

If the benefits we’ve outlined above don’t convince you that it’s time to finally embrace the cloud, maybe the risk of inaction will change your mind. On-prem solutions open the door to security risks, create barriers to insights and collaboration, and waste time with manual, error-prone processes.

The point is you can’t avoid cloud migration forever. And unfortunately, if you wait any longer, your business might not make it to 2022.

Ready to get started on your Digital Transformation? Read more about the process here.