In July 2020, Microsoft commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study to examine the potential return on investment (ROI) enterprises may realise by migrating from on-premises deployments of Microsoft Dynamics AX to Microsoft Dynamics 365 ERP solutions hosted in the cloud.
Forrester’s study revealed that companies who migrated from Dynamics AX 2009 and/or AX 2012 to Dynamics in the cloud either matched or reduced their ERP’s Total Cost of Ownership by 3.4%. Furthermore, a variety of additional cost and operational efficiencies were achieved through the organisation.
In this article, we share Forrester’s top 3 findings on how companies reduced their TCO.
1 Consolidating On-Premises Licensing and Support Costs
Companies with global operations realised greater savings through the consolidation of their user licenses across multiple geographies as centralised functions yielded savings via a downgraded license type or avoided some user licences altogether.
Some organisations paying user license fees for additional ERP functionality, (not available on their Dynamics AX deployments), reported higher levels of consolidation savings after the migration. By moving to the cloud, companies saved an average of over 8% of the overall licensing and support costs for their ERP users. Furthermore, organisations with global and multiple on-premises Dynamics AX deployments reported consolidation savings upwards 20%.
2 Avoiding On-premises Infrastructure Costs
Migration to the cloud inherently allows significant infrastructure cost savings over an on-premises deployment, reducing both capital expenditure and overhead costs.
Initial savings include hardware and software costs for infrastructure refreshes. Companies who migrated to Dynamics 365 in the cloud reported savings of approximately £19,360 per server across deployment. Ongoing costs such as maintenance, cooling and power, are also avoided at roughly £10,600 per server per year.
3 Reducing the Burden on IT Systems Administrators
As organisations’ on-premises deployments are migrated to the cloud, IT systems administrators, previously tasked with maintaining and upgrading the on-premises deployments, realise productivity savings of up to 50%. This means they can be reallocated to other high impact tasks.
In addition to a reduction in TCO, other benefits identified by migrating to the cloud included:
- Improvement to the user experience due to an improvement in device access and reduction of tedious tasks. This results in higher productivity for finance personnel, and operational efficiency gains throughout the supply chain.
- Better customer experiences for improved services and delivery times.
- Flexibility to scale with business demands, or in response to unforeseen events.
Accelerate your Journey to the Cloud with Dynamo
Mainstream support for Dynamics AX 2012 R3 ended on October 12, 2021. After that date, only security hotfixes will continue to be provided through the extended support period that continues until January 10, 2023.
Dynamo is currently working with several organisations currently using Dynamics AX to understand what this means for them – helping them assess the risk of remaining on a legacy on-premises solution, as well as understand the value and business benefits of upgrading to Dynamics 365 Finance and Operations.
Our Dynamics 365 Consultants can provide a Live Demo, help you to set up a free trial, and show you how to transform your business processes using Dynamics 365 Finance and other integrated Dynamics 365 modules.
Contact us now to discuss how we can support your business