Many companies still operate on older on-premises versions of Dynamics NAV or Business Central. At the same time, Microsoft is increasingly moving new functions, AI features, and platform developments to the cloud. Looking ahead to the coming years, the question of how companies will structure their ERP and finance landscape in the future is therefore becoming increasingly relevant. The pressure to act is mounting significantly, particularly with regard to migration by 2027.
What does "On Prem" actually mean in Business Central?
"On-premises" means that Business Central or earlier Dynamics systems are run locally within the company. The infrastructure is typically housed in the company's own data centers or on its own servers. Updates, maintenance, security, and operations must be managed internally or in collaboration with partners.
This model was the standard for a long time. Many companies have customized their ERP systems over the years and deeply integrated them into existing processes. That is precisely why there are still numerous older on-premises NAV and Business Central installations in use today. At the same time, however, Microsoft has been significantly shifting its strategy toward cloud and SaaS models for several years. New functions, AI features, Copilot extensions, and modern platform services are increasingly being made available first or exclusively in the cloud.
As a result, many companies are facing a growing gap between their existing on-premises systems and modern platform capabilities.
Why the 2027 deadline is becoming relevant now
Many companies currently underestimate how much work a future migration could entail. At the same time, they often get the impression that there is still plenty of time.
The reality is often quite different. ERP migrations involve not only technology, but also processes, data structures, integrations, user roles, and customizations. The longer systems are operated without changes, the more complex the subsequent migration often becomes.
A particularly critical issue here is that modern features are increasingly available only through cloud-based solutions. These include, among other things, Copilot features, modern automation tools, AI support, and cloud-based platform services.
The following overview shows why many companies should already be incorporating this issue into their strategic planning:
| Topic | Timeframe / Deadline | Meaning |
|---|---|---|
| Mainstream Support for Older Versions of Dynamics NAV | Already expired | No more regular feature updates |
| Focus of New Microsoft Developments | Already cloud-centric | New AI and Copilot features are primarily developed in the cloud |
| Business Central Cloud Enhancements | Ongoing | New features are released first in SaaS environments |
| Preparing for Migration | No later than 2025–2026 | Analysis, planning, and data cleaning take time |
| A critical period for many on-premises migrations | Through January 2027 | By then, companies should have strategically prepared for migrations |
| Future AI and automation features | Primarily cloud-based | Many modern features require cloud platforms |
Many companies underestimate how early they need to start preparing for ERP migrations. Customizations, integrations, and legacy data structures, in particular, often significantly increase the effort involved.
Why many companies have postponed the migration so far
The reluctance of many companies is understandable. ERP systems are among the most sensitive platforms within an organization. Changes have a direct impact on finance, procurement, projects, reporting, and operational processes.
The following factors are particularly common in this context:
- customizations
- processes that have developed over time
- Integrations with third-party systems
- Uncertainty about the effort and costs involved
- lack of internal resources
- Current Projects and Priorities
In addition, many organizations have been operating smoothly with their existing systems for years. Understandably, this creates little pressure to change as long as no immediate problems arise. At the same time, this very wait-and-see approach often results in migrations having to take place later under significantly greater time pressure.
What risks are involved in waiting and seeing?
Many companies still view migration primarily as a technical issue. In reality, however, the greatest risks often arise in day-to-day operations. Older on-premises systems are making it increasingly difficult to:
- modern integrations
- flexible scaling
- cross-site collaboration
- cloud-based services
- AI Features
- modern automation
At the same time, demands are increasing on:
- Security
- Compliance
- Privacy Policy
- Availability
- Reporting
- Transparency
This becomes particularly problematic when existing systems require increasingly customized extensions, even though their underlying technology is already outdated. There is another important factor to consider: Many new features related to Microsoft Copilot, automation, and modern workflows are now being developed directly within cloud platforms. Companies with older on-premises environments often have limited ability to take advantage of these developments. This not only leads to a technical gap but also, in the long term, to an operational competitive disadvantage.
Why Business Central Cloud is so much more than just hosting
Many companies currently limit the discussion to whether a system should be run on-premises or in the cloud. In reality, however, much more is changing. Business Central Cloud opens up new possibilities for:
- Automation
- AI Support
- Real-time reporting
- Integration with Microsoft 365
- central data platforms
- modern safety standards
- flexible scaling
This changes not only the technical infrastructure, but also the way finance and accounting are managed.
Why migrations should be planned well in advance
Many companies underestimate the organizational effort involved in an ERP migration. Even when the technical transition is carried out in a relatively structured manner, challenges often arise in the following areas:
- Data Quality
- Process definitions
- Role models
- Training courses
- Permissions
- Integrations
A particularly critical question that often arises is which individual adjustments are still actually needed and which processes should be modernized. This is precisely why early planning is crucial. Companies need sufficient time to:
- analyze existing systems
- Evaluate processes
- Clean up data
- Set priorities
- Review integrations
- define future goals
The sooner these issues are addressed, the more effectively risks can be mitigated. Information on planning and preparation is also available from Microsoft:Plan and prepare for on-premises deployments.
Why migration can also be an opportunity
Many companies initially view migration primarily as a necessary IT project. In reality, however, it often presents an opportunity to fundamentally modernize existing processes. This is particularly true in finance and accounting, where the following are often found:
- manual steps
- duplicate data entry
- isolated reports
- Custom Excel Solutions
- lack of transparency
A migration offers an opportunity to reevaluate these structures and meaningfully integrate modern platform features. Especially when combined with modern AI and automation capabilities, it becomes clear that migration is no longer just about infrastructure.
What role AI and Copilot will play in the future
Microsoft is currently integrating AI capabilities extensively across its entire business platform. Copilot, in particular, is increasingly becoming an integral part of finance, ERP, and business processes. This opens up new opportunities for:
- Summaries
- Analyses
- Forecasting
- Support with booking processes
- Data analysis
- Process Automation
However, many of these features are primarily developed within modern cloud platforms. Companies that wish to benefit from these developments in the long term must therefore increasingly consider what their future platform strategy should look like.
Conclusion
Migrating older Business Central or NAV on-premises environments will become a key priority for many companies in the coming years. This goes far beyond just infrastructure or hosting. Modern cloud platforms are transforming processes, automation, reporting, and the entire management of finance and accounting. At the same time, demands for security, integration, and flexibility are increasing. Companies that plan early can mitigate risks more effectively while also using the migration as an opportunity for modernization.
FAQ
What does "Business Central On Prem" mean?
In this setup, Business Central is run locally on the company's own servers or in its own data centers.
Why will migration become important by 2027?
Microsoft is increasingly shifting new features and platform developments to the cloud. At the same time, demands for security, integration, and modern platform services are on the rise.
What happens if companies don't migrate?
Over time, older systems may reach their limits in terms of innovation, integration, security, and automation.
Is a Business Central migration just a technical project?
No. Migrations also involve processes, data, roles, integrations, and organizational workflows.
What are the benefits of Business Central Cloud?
These include improved scalability, modern integrations, AI capabilities, automation, and cloud-based platform services.
What role does Microsoft Copilot play in Business Central?
Copilot is increasingly expanding Business Central with AI-powered support for analytics, processes, and operational tasks.
How long does a Business Central migration take?
That depends heavily on the system environment, data quality, customizations, and integrations. Many projects require several months of planning and implementation.
