The Hidden Risk in AX and NAV to Dynamics 365 Migrations CFOs Underestimate

The Hidden Risk in AX and NAV to Dynamics 365 Migrations CFOs Underestimate

For many CFOs, the migration from AX or NAV to Dynamics 365 is framed as a necessary modernisation. Legacy platforms are reaching end of life. Support models are weakening. The organisation needs better data, better insight, and better scalability.

On the surface, the migration appears largely technical. Move from an on premise system to a cloud based platform. Standardise where possible. Clean up historical complexity. Enable future innovation.

Yet in practice, the most material risk in these migrations is not technical failure, budget overrun, or delayed go live.

The real risk is something CFOs consistently underestimate. The gradual erosion of financial control, transparency, and decision confidence during and after the migration.

This risk rarely appears on the programme risk register. But when it materialises, it directly impacts reporting integrity, audit outcomes, and leadership credibility.

Why AX and NAV migrations feel deceptively safe

AX and NAV migrations are often perceived as lower risk than greenfield ERP implementations.

The organisation already understands Microsoft finance. Core processes are familiar. Users believe they are upgrading rather than transforming. Sponsors assume continuity.

This sense of familiarity creates false confidence.

AX and NAV systems typically contain years of embedded workarounds, local extensions, manual controls, and undocumented logic. Much of this functionality is not visible in process documentation or design artefacts. It lives in behaviour.

When organisations migrate without fully understanding how value and control are actually delivered today, they inadvertently remove mechanisms that finance relies on, without replacing them.

The system improves. The control environment weakens.

Control does not live where CFOs think it does

One of the most common misconceptions in AX and NAV migrations is where financial control actually resides.

In theory, control sits in configured workflows, system validations, approval hierarchies, and automated reconciliations.

In reality, much of the control in legacy environments sits outside the system.

It exists in spreadsheets used to validate postings. In manual reviews performed because the system cannot be trusted. In informal checks carried out by experienced individuals who understand where errors usually occur.

Over time, finance teams build shadow control environments around the ERP.

When migrating to Dynamics 365, these controls are often stripped away in the name of standardisation and simplification. The assumption is that the new system will inherently be better controlled.

Unless controls are explicitly re engineered, they are simply removed.

Historical data hides future risk

CFOs are rightly focused on balance migration, open transactions, and comparative reporting during the transition period.

What receives far less attention is the quality and structure of transactional data that will drive future reporting, forecasting, and controls.

AX and NAV systems frequently contain inconsistent coding, entity specific practices, and manual adjustments that are tolerated because teams know how to work around them.

When this data is migrated into Dynamics 365 without structural remediation, the organisation inherits the same issues in a more rigid environment.

The result is a system that technically functions but produces outputs that require manual intervention to be trusted.

Over time, confidence in management information declines. Finance reverts to offline analysis. The promised transparency never materialises.

Process continuity masks process degradation

Another hidden risk lies in the assumption that continuity equals safety.

Many migrations aim to replicate existing processes as closely as possible to reduce disruption. Change management is framed around minimal behavioural change.

This approach feels prudent. In reality, it locks in inefficiency and weakens accountability.

Legacy AX and NAV processes often evolved organically. Responsibilities blurred. Exception handling proliferated. Ownership became ambiguous.

When these processes are lifted and shifted into Dynamics 365, inefficiency becomes harder to detect and harder to challenge. The system enforces steps, but not outcomes.

CFOs discover post go live that close cycles have not improved, cost to serve has not reduced, and decision making is no faster than before.

The risk is not disruption. The risk is stagnation disguised as stability.

Reporting integrity is the silent casualty

During migration programmes, reporting is often treated as a downstream activity.

The focus is on transactional correctness. Reporting is expected to fall into place once data is live.

This is a critical mistake.

Dynamics 365 reporting structures differ materially from AX and NAV. Account structures, dimensions, and hierarchies require deliberate design aligned to how finance wants to run the business.

When reporting design is rushed or delegated, finance teams lose the ability to explain performance clearly. Reports multiply. Reconciliations increase. Adjustments become normalised.

The organisation technically closes the books. But the CFO spends more time explaining numbers and less time using them.

Capability loss compounds the risk

AX and NAV environments often rely on a small number of highly experienced individuals who understand how the system really works.

During migration, these individuals are frequently marginalised or lost. New roles emerge. External partners dominate decision making. Knowledge transfer is assumed rather than planned.

Post go live, the finance function finds itself dependent on external support for even minor changes. Issues take longer to resolve. Enhancements are deprioritised.

The system becomes something finance uses, not something it controls.

For a CFO, this is a strategic risk. Loss of system ownership is loss of finance autonomy.

Why these risks rarely surface early

These risks are difficult to detect during delivery.

Parallel runs still reconcile. Auditors sign off. Programme dashboards show green.

The impact emerges gradually. Over months rather than weeks.

Manual effort creeps back in. Controls become compensating rather than preventative. Management information loses credibility.

By the time leadership recognises the problem, the programme has closed and accountability has moved on.

How CFOs can mitigate the hidden risk

CFOs who successfully navigate AX and NAV migrations treat them as finance risk programmes, not IT upgrades.

They insist on evidence based process analysis to understand how work and control actually happen today. They design future state controls explicitly rather than assuming the system will provide them.

They elevate reporting design to a core workstream. They invest in data governance as a finance capability. They protect and transfer institutional knowledge deliberately.

Most importantly, they maintain ownership of value and control outcomes, not just delivery milestones.

A final perspective

Migrating from AX or NAV to Dynamics 365 is unavoidable for many organisations. It can be a powerful catalyst for finance improvement.

But CFOs should be clear about the real risk.

The danger is not that the system will fail. The danger is that it will succeed technically while finance quietly loses control, clarity, and confidence.

Those risks are harder to see. And far harder to reverse once the programme is complete.