History of Dynamics 365: From Axapta to Microsoft Dynamics 365 Finance and Supply Chain Management

How has Microsoft Dynamics 365 Finance and Supply Chain Management evolved?

Dynamics 365 Finance and Supply Chain Management, originally known as Dynamics 365 Finance and Operations (D365 F&O), has more than twenty-five years of development history that has shaped the evolution of modern ERP systems.

Its roots date back to 1998, when the Danish company Damgaard Data introduced Axapta to the market—a flexible and technologically advanced solution for medium-sized and large enterprises, with a strong focus on international operations and customization. After the merger of Damgaard and Navision Software in 2000, Microsoft acquired Axapta in 2002, marking its entry into the ERP segment with the ambition of building a unified enterprise platform. In 2005, Axapta was renamed Dynamics AX and became Microsoft’s flagship ERP system, which expanded globally over the following decade thanks to robust capabilities in finance, manufacturing, and supply chain management.

A major shift occurred in 2016, when Microsoft moved its ERP fully to the cloud on the Azure platform and unified ERP and CRM under the Dynamics 365 brand. This led to the creation of Dynamics 365 for Finance and Operations (D365 F&O)—the first version of the system available exclusively through a web-based interface.

In 2019, the solution was split into two standalone applications: Dynamics 365 Finance and Dynamics 365 Supply Chain Management (D365 SCM), enabling more precise licensing and greater flexibility based on specific business process needs.
As a result, the original on-premises system evolved into a modern, scalable, and continuously innovated cloud ERP, now part of the broader Dynamics 365 ecosystem and Power Platform, supporting digital transformation for organizations worldwide through the use of AI.

Why did Microsoft change its approach: from on-premises to an intelligent cloud?

The transition to the cloud was not merely a technological update. It represented a fundamental shift in the philosophy of ERP systems. Modern organizations require speed, predictive management, and the ability to scale capacity as needed. This is exactly what Dynamics 365 delivers—a system that is continuously updated, secure, and fully integrated with the Microsoft ecosystem.

Instead of a model based on large upgrade projects carried out every few years, a new environment has emerged that delivers new capabilities almost continuously. For executive management, this means a significantly lower risk of technological debt and the ability to continuously leverage the latest technologies, including AI and automation.

Along with the technological shift came a change in licensing. While the system was previously tied to hardware and one-time licenses, today the licensing of Dynamics 365 Finance and Dynamics 365 Supply Chain Management is based on a per-user model (named user per month/year). Organizations can choose either the Finance application, Supply Chain Management, or a combination of both, depending on their current business process needs.

A recent revision of the licensing model has been announced: license management will be available through centralized administrative tools (e.g., the Power Platform admin center), and as of January 15, 2026, every user must have a valid assigned license—without it, access will be revoked.

The latest generation of Dynamics 365 also includes Copilot—an integrated AI agent that significantly simplifies day-to-day work with ERP systems. Through the Copilot platform, organizations can leverage artificial intelligence to automate routine tasks such as transaction reconciliation, communication drafting, and forecast generation.

In D365 Finance, Copilot automatically summarizes customer payment history, receivables, and invoices, and prepares suggested reminders or emails. In Supply Chain Management, it can generate overviews of inventory levels, orders, deliveries, vendor statuses, and demand planning, including trend analysis and decision recommendations. As a result, both management and operations gain a fast, clear, and data-driven view of cash flow, inventory, manufacturing, and logistics.

Benefits of Dynamics 365 Finance & Supply Chain Management for Modern Enterprises

The Dynamics 365 platform enables organizations to manage key business processes across the entire enterprise. Companies can work with consolidated accounting, plan cash flow, manage inventory, run manufacturing operations, and integrate processes with sales teams or CRM. A key benefit is the unification of data into a single platform, providing management with a clear and real-time overview.

Key benefits include:

Cloud flexibility – access from anywhere, automatic updates
Integrated platform – Finance, SCM, Power Platform, Microsoft 365
Security and performance – Azure infrastructure
Predictive management – AI, analytics, automation

Dynamics 365 Finance

Dynamics 365 Finance is a modern cloud-based application for financial management that provides organizations with real-time visibility into cash flow, profitability, and financial operations. It enables automation of accounting processes, consolidation of multiple entities, and management of budgets, taxes, and receivables/payables, including multi-currency and international support for global operations. With integrated analytics and planning and forecasting tools, it helps organizations respond quickly to market changes, optimize costs, and strategically manage growth.

Learn more about Dynamics 365 Finance

Dynamics 365 Supply Chain Management

Dynamics 365 Supply Chain Management delivers comprehensive supply chain management—from planning and procurement through manufacturing, warehousing, and logistics to distribution and asset maintenance. Thanks to its cloud architecture, AI capabilities, and integrated cross-department collaboration, it provides real-time visibility into inventory, orders, production, and deliveries across locations and countries. It enables organizations to respond quickly to changes in demand, optimize inventory levels, eliminate disruptions, and shorten lead times. An additional advantage is its integration with other modules and the ability to tailor processes to specific industry and organizational requirements.

Discover Dynamics 365 Supply Chain Management

Aricoma is your partner for ERP Dynamics 365

As an implementation partner with many years of experience, we help organizations not only with upgrades from older versions of Dynamics AX or Dynamics 365 FO, but also with transitions from systems such as SAP or other ERP platforms. We have experience across the entire project lifecycle, including support for change management, which is a key factor in the success of any implementation.

Our services include:

Process analysis – mapping the current state and proposing optimizations
Customization and development – system configuration and extension of functionality through custom modules or applications
Data migration – secure and consistent transfer of data to Dynamics 365
Integrations – system integrations, Power Platform, automation
Training and support – ensuring a smooth transition for users

We place a strong emphasis on the use of DevOps tools for transparent project management, requirements management, backlog and project documentation, development and testing management, automation of builds and deployments through LCS and Azure DevOps, quality assurance, and tracking change history. This approach increases project transparency, ensures control over changes, delivers predictable outcomes, and guarantees a high quality of delivery.

For international Dynamics 365 implementations, we deliver rollouts across Europe and other regions. We ensure process standardization, coordination of multiple vendors, and support for global teams. We provide Dynamics 365 localizations for the Czech Republic and Slovakia, including legislative requirements, reporting, and exchange rate solutions for Dynamics 365 Finance (ALS). Through our international partnerships, we cover the language, legislative, and technical requirements of additional countries and ensure seamless integration into a global enterprise architecture.

This comprehensive approach enables us to deliver projects that are not merely a technological replacement, but a true modernization of business processes, fully supporting growth and international expansion.

FAQ / Frequently Asked Questions

What is the licensing model for Dynamics 365 Finance and Supply Chain Management?

Licensing is based on a monthly per-user fee. Organizations can choose Dynamics 365 Finance or Dynamics 365 Supply Chain Management individually, or a combination of both. The system also offers add-on licenses for specific roles and automation. From 2026 onward, every user must have a valid assigned license.

How long does a Dynamics 365 implementation take?

The duration of an implementation depends on the scope of processes, integrations, and the level of customization. Smaller projects typically take 6–9 months, while more complex implementations in manufacturing or logistics may take 12–18 months. The cloud-based model of Dynamics 365 enables faster deployment and continuous expansion over time.

Is Dynamics 365 Business Central an alternative to Dynamics 365 Finance?

Yes, but for a different segment. Dynamics 365 Business Central is a comprehensive ERP solution for small and mid-sized companies with a simpler structure. Dynamics 365 Finance is designed for large enterprises, international groups, and holding organizations that require complex accounting, consolidation, multiple entities, and advanced financial processes.

How does Dynamics 365 Finance and Supply Chain Management use AI and AI agents?

Dynamics 365 leverages AI, AI agents, and Copilot to automate tasks, enable predictive analytics, and support intelligent management. It helps with cash flow forecasting, inventory planning, anomaly detection, data summarization, and action recommendations for users. As a result, it accelerates decision-making and increases efficiency across the entire organization.

How is Dynamics 365 Finance and Supply Chain Management implemented?

The implementation follows the 4D methodology (Discover, Define, Develop, Deploy). It begins with process analysis and the design of the solution and architecture, followed by configuration, customization, integrations, and data migration. The final phase includes testing, user training, and a controlled go-live deployment.

Is FO adapted to meet local requirements in the Czech Republic and Slovakia?

Yes, FO can be fully customized and localized for both the Czech and Slovak environments. Aricoma provides its own localization solution for CZ/SK, including legislative adjustments, accounting processes, reporting, and the ALS package. As part of international implementations of Dynamics 365 Finance & Supply Chain Management, we ensure that the system complies with local regulations while remaining fully compatible with the company’s global architecture.

Can Dynamics 365 Finance and Supply Chain Management be customized to meet specific needs?

Yes. The system offers extensive options for configuration, extensions, custom workflows, and integrations via the Power Platform or APIs. Thanks to its cloud architecture, processes can be customized without modifying the application core, ensuring fast updates and long-term solution sustainability.

Share