How to Migrate Data to Dynamics 365: A Complete Guide

Let’s be honest, the ERP migration process can be complex and high-risk. That’s why many organizations delay ERP migrations longer than they should. 

But the long-term benefits of moving to Microsoft Dynamics 365 Finance & Supply Chain Management (D365 F&SCM) far outweigh the stress, cost, resources, and complexity of maintaining outdated legacy ERP systems.

In a D365 F&SCM implementation project, migration needs to be given high-priority and requires proper planning and strategy. Most organizations do not realize that the success of the data migration directly impacts the success or failure of the ERP project. Infact based on a report 50% of all ERP implementations fail the first time.

To help ease your transition from a legacy ERP system to D365 F&SCM, we present this comprehensive guide. This guide includes the benefits of transitioning to Dynamics 365, the challenges to anticipate, common mistakes to avoid, best practices to swear by, and a step-by-step breakdown of the D365 data migration process.

With over two decades of experience, STAEDEAN has helped customers ease business processes using the power of Microsoft Dynamics ERPs with no-code/low code solutions embedded within the ERP system. 

We have condensed our experience in this guide. Let’s walk through the entire process to get your migration right the first time.

Looking for a solution that can help you fast track your data migration to Dynamics 365? 

What is Dynamics 365 data migration?

When you decide to move from your current ERP system, whether legacy on-premises or on the cloud, to Microsoft Dynamics 365 Finance & Supply Chain Management, that involves moving all your data to Dynamics 365. 

But you cannot just ‘lift and shift’ data as it is. Each ERP system has its business logic, rules, and data model. Therefore, a Dynamics 365 data migration involves data extraction, transformation, mapping from source to target, and finally moving data to the new ERP system. 

ETL, or extract, transform, and load, is an essential process in the Dynamics 365 data migration project.

Benefits of upgrading to Microsoft Dynamics 365 ERP

Microsoft offers a modern “autonomous ERP” as Sameer Verma, General Manager & Head of AI and ERP at Microsoft puts it in our webinar: Beyond SaaS: How AI Agents Are Taking Over Enterprise Tech. 

Microsoft offers a cloud-based platform offering various business applications including sales, marketing, customer service, finance, operations, and supply chain management. 

Additionally, you can leverage Microsoft’s ecosystem for other processes such as Power Platform (Power Apps, Power Automate), Office 365, and Azure.

Based on the Total Economic Impact™ study by Forrester, commissioned by Microsoft to report the ROI for organizations that moved from a legacy ERP system to Microsoft Dynamics 365 Finance & Operations offers impressive cost benefits and transformative business benefits. 

Some of these benefits are listed below:

• Streamlined financial operations: With standardized financial reporting across legal entities and geographies, and accelerated month-end closings of 6 days compared to 20 days taken by legacy systems, makes managing financial tasks easier.

• Automation and improved user experience: Tasks like expense management, procurement, invoicing, and payments are fully automated. The platform offers role-based dashboards for easier navigation.

• Scalable and simplified Infrastructure: Transitioning to the cloud eliminates the need for complex, costly on-premises infrastructure and makes it easier to scale with lesser costs and resources.

• Cost savings: Lesser reliance on external tools for processes such as timesheets, auditing can result in savings of $100K+ annually.

• Security: You can leverage Microsoft’s $1B investment in Azure security infrastructure when you opt for Dynamics 365.

• AI, ML, and IoT: Microsoft offers intelligent forecasts, demand planning, and predictive maintenance. You can also take advantage of IoT-enabled automation for devices like sensors and RFID trackers that can enhance supply chain visibility and operational control. Additionally, in April 2025, Microsoft rolled out AI agents that work in sync with CoPilot.

Challenges of migrating to Dynamics 365

To truly witness the benefits of Dynamics 365 and ensure user adoption, your ERP system's data needs to be assessed and polished before it can be transferred, removing duplicates, errors, and historical data. 

A data migration project can be extremely high-risk if you do not adequately plan the scope, timeline, budget, resources, tools, and strategy.

Whether you are moving from AX 2012, SAP, Oracle, or other proprietary systems, the data migration process involves not just moving data, but ensuring its quality, consistency, structure, and compatibility with Microsoft's ecosystem. 

Below are some challenges we have come across:

1. Data structure mismatch: Different ERPs store data in varied formats, schemas, and hierarchies. Dynamics 365 requires adherence to a strict structure, including:

2.  

   • The ERP offers the Data Management Framework (DMF) with 1500 data entities to map your data. Any fields not present in DMF will need to be customized or configured using an ISV.

   •  Specific dependencies (data hierarchy and field mappings, e.g., currencies must be loaded before customers).

3. Poor data quality: Moving to Dynamics 365 from a legacy ERP system is an opportunity to do a deep-cleanse of the data.

• If you have inconsistent, incomplete, or duplicate data in your legacy system, migrating the data as is in Dynamics 365 might give you errors or cause other operational issues.

• To leverage the potential of Dynamics for reporting, analytics and AI, you need to ensure you prioritize data quality during the migration and beyond. 

1. Moving financial data: Moving financial data in Dynamics 365 migration can be challenging. 

• Dynamics 365 has rules around financial dimensions that need to be adhered to. So, before moving data, it also needs to be validated. This can be very challenging and time-consuming using customizations, especially for moving multiple financial dimensions.

• Dynamics 365 generates a unique RecID for customers and also makes moving that data a challenge as this might differ in the legacy ERP system.

1. Migrating from multiple systems: This is usually a common scenario for acquisitions and mergers.

• Some organizations use multiple ERP systems or need to consolidate data from different systems (WMS, CRM, etc.) to Dynamics 365. 

• These systems require integration with Microsoft Dynamics 365 to ensure a smooth transition. 

• This can be a very complex scenario to manage using Microsoft’s native tools and will require either development or the use of an enterprise-ready solution.

For more challenges, read our blog: Challenges in Migrating Data to Dynamics 365 ERP From Legacy Systems

Why a Strategic Approach to Dynamics 365 migration matters

More complex ERP implementations can cost companies major losses and can be extremely high-risk when not adequately planned.

Data migration mistakes 

Below are some common mistakes organizations make during their data migrations that you should avoid at all costs.

• Data migration as an afterthought: Although data migration is a part of the ERP implementation, it can also be one of the biggest hurdles in the project. Dynamics 365 migration planning and strategy should account for enough time, resources, and budget for the project. Most organizations do not take up the data migration till just before go-live. This makes it difficult to foresee challenges and causes delays in the Dynamics 365 implementation.

• Tight deadlines: When data migrations go live in a hurry with tight deadlines, the repercussions can be disastrous. Some of your crucial data could be missing, have errors, and users will not use the new ERP system. You will face issues in operations, delayed deliveries, and compliance fines. Meanwhile, you are stuck between two systems, you need to fix errors and move users to a new system. This can become a very expensive issue to fix.

• Poor data quality: When you are moving data from multiple source systems to Dynamics 365, you need to check, transform, and map the data. To ensure there are no duplicate records, errors, or missing data, data quality checks need to be conducted multiple times at different stages of the project. This is also an opportunity to clean out your system and archive or delete historical data that is no longer relevant for your business.

• Inadequate testing: You cannot rush testing in a data migration, and you need multiple iterations to get it right. Testing gives you a means to optimize performance and is also an important stage to check your data transformations, mapping, and data quality. Not planning enough rounds of testing can leave you with data discrepancies between the two systems post go-live.

A well-planned migration with the right strategy, team, tools, and checkpoints will have a higher chance of success and will also impact the ERP implementation. If you want to harness the potential of Microsoft Dynamics 365, you have to get it right the first time.  

The Complete Dynamics 365 Data Migration Process

Step 1:  How to build a successful Dynamics 365 migration team

• Get the right mix: Ensure you have functional and technical team members who understand the business processes and the source systems – ERP system/s and business systems. This would include team members across business processes, especially finance, to validate critical financial data. 

• Onboard partners: It would also be crucial to get a partner/vendor that has an understanding of Microsoft Dynamics 365’s business rules and data entities. If you are looking at customizations or an enterprise-ready solution, you will also need to hire or involve a developer/ or external consultants. 

• Get sponsorship: We also recommend having a senior management member involved in the project. At this stage, demarcating clear roles and responsibilities, and ensuring time for the entire project is planned and blocked for the data migration team.

Step 2: Assessing your data environment

• Data analysis: Next, evaluate the scope, quality, and type of data in your source systems. It is time for a data assessment of your legacy ERP system/s. Check historical data and ask your team, “do we really need this data?”. 

• Begin documentation: Ensuring documentation right from the beginning, when you begin the legacy system evaluation and data assessment, will make it easier to map your data between source and target systems. 

• Define scope: At this stage, you will need to understand data structure discrepancies and the transformation required to outline the scope of the project.

Step 3: Developing a migration strategy

• Pick an approach: Plan your data migration approach – big bang or phased based on the scope of your project. We always recommend a phased approach as that allows you to move some data earlier and optimize the speed of data transfer, check for data quality, and address other potential issues that could threaten your data migration.

• Draft a project plan: Planning for your Dynamics 365 migration timeline, budget, goals, user training, and communication plan should be part of the data migration strategy. Ensure all stakeholders align on your data migration goals whether that is 97.8% data accuracy or 99%.

• Plan testing and go-live: Ensure you allocate adequate time for testing besides the user acceptance testing (UAT), and final extraction, transfer, and load, (ETL) which will have to be scheduled on a long weekend or post-work hours. 

Step 4: Selecting migration tools

• Evaluate native tools: Microsoft offers the Data Management Framework that allows you to map data with D365’s data entities for reference, master, and document data. However, moving financial data such as financial dimensions, and RecID can be a challenge as the system generates a unique identifier per customer. 

• Identify number of customizations: Additionally, if your nomenclature differs in your legacy or external systems that you are moving data from, you need to begin development. However, development means a dependency on developers, longer timelines, and also maintaining those customizations after go-live. 

• Consider an ISV Solution: However, an enterprise-ready solution that is low-code/no-code will help you speed up your data migration twice as fast in comparison to development.

If you are confused, which approach to take, our customizations versus ISVs webinar will give you a holistic picture of both paths.

Ensure the Dynamics 365 migration tool you choose offers:

• a plug-and-play solution that supports data mapping and transformation
• Microsoft business logic built-in
• data migration, integration, and movement
• templates that speed up your migration
• adequate support and documentation
• maintenance with Microsoft’s updates
• roadmap based on the latest advancements in technology 

STAEDEAN’s embedded no-code Data Migration Solution for Dynamics 365 ticks all these boxes.

Step 5: Preparing your data for migration

• Data cleansing and transformation: Once you pick an ISV solution or decide to use customizations, it is time for data cleansing, transformation, and mapping. Ensure you designate team members to validate data after it is transformed and mapped before you begin testing. Although you will have to continue to do data quality checks once you begin testing as well.

• Map source and target fields: Data mapping involves identifying the correct location in the target system for each field from the source system. Microsoft follows a sequencing of data, therefore, you also have to map out the entire sequence to ensure dependent fields are being moved in the right order or the system will throw an error. 

• Use versioning: You will have to consider multiple iterations till you get this right and document each iteration so that you can identify errors and learnings.

• Plan for custom fields: For custom fields, you have to consider transformation or customizations before you can map that data. STAEDEAN’s Data Migration Solution allows you to add placeholders for custom fields and map data with ease.

Step 6: Testing and more testing

• Begin with critical data: When you are testing iterations, we recommend testing critical data first. Testing is an opportunity to spot errors, optimize performance, and also improve your data quality. With incremental testing, for every iteration, you can increase the load. Therefore, do not use sample data for testing, but actual data.

• UAT planning: The user acceptance testing (UAT) is a chance to go through all your processes and test the entire data load before go-live. Ensure your security roles are also set up during this phase, so that users can point out access problems, if any.

• Final tests: Post the UAT, the final migration testing run prior to production is your last chance to make any tweaks. Prioritize data validation throughout testing to ensure maximum data accuracy.

Step 7: Executing the migration process

• Plan communication: It is essential to share communication about downtime and the migration execution timeline in advance. The legacy ERP system needs to be out of commission during this period. 

• Schedule user training: Conduct user trainings to ensure users are comfortable and adopt the new ERP system and any issues during UAT have been fixed. Another thing to do in advance is block out the data migration team’s availability for the data transfer process and post-migration activities. 

• Move some data prior: Although the final data migration is conducted on a weekend or night shift, we recommend moving some static data in advance to reduce the load on the final event.

Step 8: Optimizing post-migration performance

• Plan a go-live checklist: Ensure, you have a checklist for post-migration activities planned in your strategy per business function. For example, the finance team might need to check ledger balances and update the status of the transactions that couldn’t be posted during the migration. 

• Recommended checks: Data quality checks between the source and target systems and checking the number of exported and imported records are basic checks that we recommend for all our customers.

Step 9: Managing ongoing data quality

• Plan for data governance: To maintain data quality post go-live and ensure the integrity of your master data, charting out a data governance framework and processes for data quality management should be your next project. 

• Implement data process in ERP: Adding workflows, data quality rules, and managing master data distribution and control can ensure new data entered in the system is accurate, consistent, complete, timely, and validated.  

At STAEDEAN, we offer the Master Data Management Solution that helps you maintain data governance post go-live for your Dynamics 365 data.

Dynamics 365 migration best practices

Below are some tips to help you plan a successful migration project.

• Set up data quality processes: Add data quality rules, using a tool or customizations prior to the data migration. Prioritize data quality checks throughout the project.

• Assemble the right team: Look for team members/partners who have experience in data migrations and understand the differences in nomenclature between D365 F&SCM and your legacy system.

• Ensure documentation: Maintain documentation at every stage from the start of the project. If people leave in the middle of the project, you can rely on the documentation.

• Plan a communications calendar: Plan communications for important timelines and milestones such as the last date to enter data into the legacy system, mandatory training schedules, downtime, and go-live date.

• Extract data for analysis: Perform an extraction from all subsystems during the planning stage into staging tables in D365 F&SCM to understand the volume of data transformations required.

For more winning tips, read: 20 Insider Tips for a Successful Data Migration to D365 F&SCM

Conclusion: Ease your transition to Dynamics 365

Migrating to Microsoft Dynamics 365 Finance & Supply Chain Management is a risky endeavor. A badly planned and executed Dynamics 365 data migration project can derail your ERP implementation. Getting it right the first time is crucial. But it demands careful planning, the right team and tools, adequate testing and data quality checks. With a well-planned data migration strategy, your organization can harness the full potential of Dynamics 365, including better data-driven decision-making, streamlined operations, and long-term cost savings.

By following the steps, best practices, and avoiding common pitfalls outlined in this guide, you improve the chances of a successful data migration. At STAEDEAN, we've helped 600+ organizations ease their transition to Dynamics 365 using our no-code/low-code Data Migration Solution.

When to seek professional help?

Assess the risk in your project using our free Data Migration Risk Assessment. If your project is high-risk and complex, reach out to us. 

Our team has eased the transition for customers using various legacy ERP systems to Microsoft Dynamics 365 using our embedded no-code Data Migration Solution and would be happy to help.

If you are looking for a solution to speed up your move to D365 F&SCM, our solution offers:

• multi-company support
• parallel imports
• multi-threading
• built-in templates that can help you achieve 62% faster data migrations!

For more details about the features and benefits of our data migration solution, download our Data Migration Solution factsheet. To schedule a demo with our experts, click on the link below.