When considering an upgrade to Dynamics 365, it is important to have a proper overview of the costs that are involved in a migration. However, many businesses let themselves get too intimidated by the costs of an upgrade. Also, they mistakenly believe that keeping their legacy system does not cost them anything at all. For many reasons, this is a very wrong perspective to take, as we will explain in this blog.
Costs of holding onto your legacy system
Firstly, there are costs associated with the maintenance of your legacy system. Even though businesses often fail to acknowledge this, using Dynamics AX costs you money because it provides data to other applications that your company uses. When you use Dynamics 365, these applications are interconnected, so working with them is more efficient and saves you money.
Another component to the costs of your legacy system are the regular maintenance costs. For example, these are related to maintaining on-premises hardware. When you use the cloud-based D365, maintenance of the system becomes Microsoft’s responsibility. The solution provider also needs to make sure the system complies with increasingly strict security standards. Thus, after moving to D365, you no longer need to spend extra resources on the security of your system.
The aforementioned costs are all recurring, but there is also the risk of having to pay unexpected large expenses whenever there is an unforeseen issue with the system that needs fixing. And, if Microsoft no longer provides (extended) support for your legacy system, you’ll have to get support from a reseller.
Losing customers and employees
Importantly, even your customers could suffer from the negative influences of your legacy system. For example, the inefficiencies of legacy systems could cause problems with delivery of goods or delayed customer service. This could even make you lose customers as they decide to switch to companies that are better equipped to help them quickly and accurately. Similarly, you could lose employees as well. For instance, maybe your system is so old that all the professionals who can work with it are (nearly) retired. Or younger professionals are just not interested in working for a business that has such outdated technology when other, more innovative companies are also standing in line to sign contracts with them.
Opportunity costs of not upgrading to a newer system
In microeconomics, it is always important to not only consider the actual expenses you are making, but also the benefits you could have received from options that you did not choose. This is referred to as ‘’opportunity costs’’. There are many kinds of opportunity costs associated with not upgrading to D365, for example:
- Missed revenue because employees have outdated insight into stock availability, so they may fail to sell products even though they are, in fact, in stock. D365 would always give your employees access to real-time data, no matter where they are or what device they’re using. D365 ensures that your business is agile, so that you don’t miss any opportunities.
- Missed revenue because employees waste time on doing manual, tedious tasks. D365 offers many possibilities for automation, alleviating the need for employees to work on such tasks. It therefore also provides a possibility for reorganization within your company.
Upgrading to D365 does indeed mean that you need to make large investments, but you should not overlook the substantive costs associated with keeping your legacy system running. Also, the investment into D365 is more than likely to pay itself off over time. At Kaya, we are able to help you and advice you regarding your cloud transition. Please contact us if you are interested to learn more.