It's Time to Upgrade from Microsoft Dynamics AX 2012 to Microsoft Dynamics 365: Here's What You Need to Know

On December 27, 2022

While ERP migrations can be expensive and time-consuming, relying on an unsupported solution can put your GMP business at serious risk

Support for Microsoft Dynamics AX 2012 ended on April 12, 2022, so if you haven’t already upgraded to Microsoft Dynamics 365 the time to do so is now. While ERP migrations can be expensive and time-consuming, relying on an unsupported solution can be catastrophic.

While using an unsupported ERP system is risky for any business, it’s particularly so for highly regulated pharmaceutical, biotech, and medical device companies that must follow strict requirements for compliance and security.

Risks of staying on dynamics ax 2012
Beyond the security and compliance issues that are increasingly likely to happen if you don’t upgrade your ERP system, the cost of maintaining your legacy ERP will eventually be more than the cost of an upgrade.

Recently, Forrester Research quantified savings of $10.6 million in IT-related costs for companies that upgraded to Microsoft Dynamics 365, thanks to cost reductions in legacy licenses, maintenance, hardware, and system administration. By reviewing seven businesses that upgraded their legacy ERP solutions to Microsoft Dynamics 365, Forrester also found that real-time data analysis, automation, and streamlined processes drove a 10% savings in the cost of goods sold and a 2.4% improvement in gross margins. Based on these findings, Forrester determined that a Dynamics 365 upgrade generally pays for itself in about six months.

So, where do you begin? Microsoft offers a set of instructions and a seven-hour tutorial. What Microsoft doesn’t account for, however, are the unique regulatory and compliance needs of pharmaceutical companies, biotech firms, medical device manufacturers, and other life sciences organizations.

Setting up an ERP task force

A large part of your ERP upgrade will involve coordinating activities and managing change internally. So before you start the upgrade process, it’s a good idea to work closely with your life sciences partner and establish a cross-functional ERP task force. This committee can prioritize workloads, ensure the safety and security of your data, work with Microsoft and/or your Life Sciences ERP partner, and keep all stakeholders up to speed as the migration efforts progress.

While this task force should originate in your IT department, stakeholders from the business should be part of the team to make sure everyone is aligned on your objectives and the processes required to achieve them.

Setting up an ERP roadmap

Whether you follow Microsoft’s instructions or use an experienced life sciences ERP partner like AX for Pharma, the basic process is the same. While we use slightly different terminology, our migration roadmap mirrors the Analyze, Execute, and Validate steps found in the Microsoft tutorials.

A sample migration plan
In addition to supporting the upgrade to Dynamics 365, we can also take care of your cloud validation requirements if you decide to move off-premises for security and flexibility advantages.

Conducting a solution assessment

Once you have the general framework in place, your ERP task force will conduct or supervise a technical audit to identify data cleanup needs (smaller databases mean smoother upgrades), SQL configuration requirements, and whether any deprecated features need to be replaced.

The best thing about working with a partner like AX for Pharma during this phase is that we’ll advise you about best practices for optimizing processes and workflows.

For example, we can help you automate second-person verification within your new ERP, eliminating the need for tedious manual work while ensuring that regulatory requirements are met. We’re also aware of the fact that many local laws mandate that healthcare data stays in the same country from where it was obtained; this is of particular importance to multinational life sciences organizations.

Piloting the new solution

Once you know what you need from your new ERP system, it’s time to set up a pilot environment to test it out. You can use your own data, or, if you work with us and rely on our industry experience, we can provide you with sample data that’s relevant to your business. Either way, we use readymade templates designed for life sciences organizations to streamline the piloting process.

Implementing your new ERP

After the pilot, when you’re sure that your ERP solution is working properly, you’ll start preparing for an organization-wide implementation of the new system. Training users and migrating data can be stressful for most organizations, but if you conduct the pilot properly with the necessary testing, the wider rollout can go quite smoothly.

Validating your new ERP for the cloud

Regardless of whether you’re choosing a cloud deployment or an on-premises one, the final step is to validate the solution for optimal risk mitigation. Several companies can provide this service, but one of the things that makes AX for Pharma unique is our ability to “think validation” while implementing the ERP system. You can think of us as your one-stop ERP shop.

If you have any hesitation about moving to the cloud, you should know that the advantages far outweigh the disadvantages. A secure cloud architecture allows you to use your ERP from anywhere, on any device, reduces the cost of IT infrastructure and maintenance, and provides efficient and economical failover management, disaster recovery, and data redundancy.

Microsoft has a great cloud and great applications, and because everything comes from a single source it all fits together quite well. What’s more, Microsoft invests more than $1B in cybersecurity each year and its cloud customers receive the benefits of that investment.

Integration: Another benefit of Microsoft Dynamics 365

A prior lack of integrated, industry-specific solutions, along with extensive merger and acquisition activity, has left many life sciences organizations saddled with a patchwork of siloed legacy systems, cobbled together with custom integrations and disparate business processes.

This fragmented operational and application landscape creates inefficiencies and vulnerabilities that expose pharmaceutical companies, biotech firms, and medical device manufacturers to regulatory consequences and increased operating costs.

And now that you have a better idea of what to expect, investing in a single, integrated ERP system can help resolve these issues and deliver cost savings that can be strategically redeployed to improve competitive advantage.

Lower the cost of ownership
Simplifying your internal solution landscape on a modern ERP system will reduce the overall IT costs of licensing and maintaining an ecosystem of point solutions while improving employee productivity. The modern ERP system acts as a single data repository, unifying data on a single data model, improving visibility across the organization, and enhancing operational decision-making through near real-time reporting.

Start your upgrade today with a trusted life sciences partner

AX for Pharma has conducted many successful ERP upgrades as support for Microsoft AX 2012 started winding down some years ago. We provide our industry expertise and our GAMP 5 Category 4 solution AX for Pharma 365™, which delivers the configurable, industry-specific modules you need out of the box, without having to perform expensive and time-consuming customizations.

For more information or to schedule a Migration Assessment Workshop, please contact us at [email protected] or +1 (813) 365-9576.