If your retail or manufacturing business is still running Dynamics AX, you’ve already committed to two of the most important strategic decisions:

 

  1. Choosing ERP as the backbone of your operations
  2. Selecting Microsoft as your technology partner

 

But AX is an aging technology. It lacks modern capabilities and could be putting your organisation at a disadvantage. To combat this, businesses should be looking to upgrade to AX’s successor: Microsoft Dynamics 365.

 

Migrating to Dynamics 365, isn’t about starting over. It’s about unlocking value from what you’ve already built.

 

The need to upgrade from AX to Dynamics 365 is growing in all sectors. However, there is significant value for Retailers and Manufacturers, both of which require agility in a dynamic (excuse the pun) economy.

Why Move from AX to Dynamics 365 Now?

There are several compelling reasons to migrate from AX to Dynamics 365 this year:

 

  • AX support has ended.
  • Technical debt is mounting.
  • Manual workarounds are becoming the norm.
  • The risks of staying put are growing every day.

 

Dynamics AX to 365 Timeline

 

This means the move to Dynamics 365 isn’t just technical. It’s strategic.

 

Many manufacturers tell us that Dynamics 365 gives them the agility, visibility, and resilience they couldn’t get from AX. Let’s explore this a bit further:

What’s In It for Manufacturers?

Manufacturers are facing unprecedented challenges to supply chain in 2025, with global geopolitics affecting costs, timelines, and resources.

 

With Dynamics 365, Manufacturers gain an end-to-end view of operations, with tools that support lean, agile processes.

 

Benefits include:

  • Real-time supply chain visibility
  • Integrated shop floor and warehouse management
  • Built-in quality control and non-conformance handling
  • Configurable production planning tools with IoT integration

 

For example, research conducted by IDC found that for Manufacturers, Dynamics 365 was leading to 85% less unplanned asset downtime, 20% more productive supply chain and procurement teams, and 40% quicker order/product delivery time—among many other benefits.

 

Furthermore, as expectations progress, AX cannot keep up and businesses find they are supplementing functionality with a range of customisations and add-ons. This was the case at Kodak Alaris—by modernising from AX to 365, they reduced customisation by 45% and reduced ISVs by 25%.

 

Like Kodak Alaris is experiencing, Dynamics 365 provides Manufacturers the end-to-end visibility required to accurately forecast and efficiently respond to market changes.

What’s In It for Retailers?

Retailers face shrinking margins, shifting customer expectations, and constant pressure to innovate. While AX 2012 served many well, it now lacks the modern capabilities and agility required in today’s dynamic retail landscape.

 

Dynamics 365 enables Retailers to finally unify customer, stock, and financial data, removing silos and speeding up decision-making.

 

Benefits include:

 

  • Real-time inventory visibility across all channels
  • Personalised customer experiences using unified data
  • Connected store ops, fulfilment, and promotions
  • Faster ability to launch and trial new services

 

“What we get with Microsoft Dynamics 365 is a single view of inventory, a single view of customers.”

Carl Phillips, Director of Technology, ao.com

 

For example, Build-A-Bear leveraged Dynamics 365 to optimise fulfilment, enabling their teams to ensure products are available when and where customers need them. Dynamics 365 led to a 28% reduction in processing days and significantly boosted warehouse productivity.

Why ERP Transformation Matters

I work with retailers and manufacturers every day who are struggling to scale and modernise with outdated systems. Dynamics 365 brings the tools, but the value only comes when it’s implemented with a business-led mindset.

 

We’ve supported many clients in the Retail and Manufacturing sectors to build roadmaps that are outcome-driven, not just IT-led. That’s the difference between “a migration” and a transformation.

 

You’ve already made the hard choices: ERP, Microsoft. Now it’s about making them work harder for you.

 

Dynamics 365 isn’t just the next version of AX, it’s a platform that sets your business up for resilience, adaptability, and future growth. And right now, Microsoft has funding available to support eligible customers in migrating to Dynamics 365 through a trusted partner like Telefónica Tech.

 

Let’s have a conversation about how you can take the next step. Reach out to me or the Telefónica Tech team to explore what a modern ERP journey could look like for your business.

A man smiles at the camera while sitting with a laptop

Explore your modern ERP journey

Get in touch with the Telefónica Tech Business Applications team today. Let’s explore what a modern ERP journey could look like for your business.

 

About the author

Brad is an experienced Transformation Director with a proven track record of successfully leading large-scale ERP implementation and business process reengineering initiatives. Passionate about leveraging technology to drive organisational growth and efficiency, Brad is skilled in strategic planning, change management and cross functional collaboration. In his role at Telefónica Tech, Brad leads the Retail & Manufacturing practice, drawing upon 20 years of experience in retail IT.

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