Many companies still work with older Dynamics NAV or Business Central On Prem environments. At the same time, Microsoft is increasingly moving new functions, AI features and platform developments to the cloud. With a view to the coming years, the question of how companies will set up their ERP and finance landscape in the future is therefore becoming increasingly relevant. Especially around migration by 2027, the pressure to act is increasing significantly.
What does On Prem mean at Business Central anyway?
On Prem means that Business Central or earlier Dynamics systems are operated locally in the company. The infrastructure is usually located in the company’s own data centers or on its own servers. Updates, maintenance, security, and operations must be managed in-house or co-with partners.
This model was standard for a long time. Many companies have adapted their ERP systems individually over the years and integrated them deeply into existing processes. This is exactly why numerous older NAV and Business Central On Prem installations still exist today. At the same time, however, Microsoft has been changing its strategy significantly towards cloud and SaaS models for several years. New functions, AI features, Copilot extensions and modern platform services are increasingly being provided first or exclusively in the cloud.
For many companies, this creates a growing gap between existing on-prem systems and modern platform functions.
Why the 2027 deadline is now relevant
Many companies are currently underestimating how great the effort of a later migration can be. At the same time, the impression often arises that there is still enough time.
The reality is often different. ERP migrations affect not only technology, but also processes, data structures, integrations, user roles and individual customizations. The longer systems are operated unchanged, the more complex the subsequent changeover often becomes.
Particularly critical is the fact that modern functions are increasingly only available on a cloud-based basis. These include Copilot functions, modern automations, AI support and cloud-based platform services.
The following overview shows why many companies should already plan for the topic strategically:
| Topic | Period / Deadline | Significance |
|---|---|---|
| Mainstream support for older Dynamics NAV versions | Already expired | No more regular feature updates |
| Focus on new Microsoft developments | Already cloud-centric | New AI and Copilot functions are primarily created in the cloud |
| Business Central Cloud Evolution | Ongoing | New features first appear in SaaS environments |
| Preparing for migration | 2025 to 2026 | Analysis, planning, and data cleansing take time |
| Critical period for many on-prem conversions | Until January 2027 | Companies should have strategically prepared migrations by then |
| Future AI and automation capabilities | Primarily cloud-based | Many modern features require cloud platforms |
Many companies underestimate how early ERP migrations need to be prepared. In particular, individual adjustments, integrations and historically grown data structures often significantly increase the effort.
Why many companies have postponed 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, purchasing, projects, reporting and operational processes.
The following factors often play a role:
- Individual adjustments
- Historically grown processes
- Integrations with third-party systems
- Uncertainty about effort and costs
- Lack of internal resources
- ongoing projects and priorities
Many organizations have also been working stably with their existing systems for years. Understandably, this creates little pressure to change, as long as no acute problems arise. At the same time, it is precisely this waiting that often leads to migrations having to take place later under much greater time pressure.
What risks arise when waiting
Many companies still view migration primarily as a technical issue. In fact, however, the greatest risks often arise in everyday operations. Older on-prem systems make it increasingly difficult to:
- Modern integrations
- Flexible scaling
- Cross-site collaboration
- cloud-based services
- AI Features
- modern automation
At the same time, requirements are increasing:
- Security
- Compliance
- Data protection
- Availability
- Reporting
- Transparency
This becomes particularly problematic when existing systems have to be expanded more and more individually, even though the technological basis is already outdated. In addition, there is another important point: Many new functions around Microsoft Copilot, automation and modern workflows are now being created directly within the cloud platforms. Companies with older on-prem environments can often only use these developments to a limited extent. This not only creates a technical backlog, but also an operational competitive disadvantage in the long term.
Why Business Central Cloud is much more than just hosting
Many companies are currently reducing the discussion to the question of whether a system is operated locally or in the cloud. In fact, however, much more is changing. Business Central Cloud opens up new opportunities for:
- Automation
- AI Support
- Real-time reporting
- Integration with Microsoft 365
- Central data platforms
- Modern safety standards
- Flexible scaling
This is changing not only the technical infrastructure, but also the way in which finance and accounting can be controlled.
Why migrations should be planned early
Many companies underestimate the organizational effort behind an ERP migration. Even if the technical changeover is comparatively structured, challenges often arise in:
- Data quality
- Process Definitions
- Role models
- Training
- Permissions
- Integrations
The question of which individual adjustments are actually still needed and which processes should be modernized is often particularly critical. This is exactly why early planning is crucial. Companies need sufficient time to:
- Analyze existing systems
- Evaluate processes
- Clean up data
- Setting priorities
- Check integrations
- to define future target images
The earlier these issues are addressed, the more controlled risks can be reduced. Information about 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 consider the migration primarily as a necessary IT project. In fact, however, there is often an opportunity to fundamentally modernize existing processes. Especially in finance and accounting, there are often the following:
- Manual work steps
- Double data maintenance
- Isolated reports
- Individual Excel solutions
- lack of transparency
A migration offers the opportunity to reevaluate these structures and integrate modern platform functions in a meaningful way. Especially in combination with modern AI and automation functions, it becomes clear that migration is no longer just about infrastructure.
What role AI and copilot will play in the future
Microsoft is currently massively integrating AI functions into the entire business platform. Copilot in particular is increasingly becoming an operational component of finance, ERP and business processes. This creates new opportunities for:
- Summaries
- Analyses
- Forecasting
- Support with booking processes
- Data analytics
- Process automation
However, many of these functions are primarily created within modern cloud platforms. Companies that want to benefit from these developments in the long term must therefore increasingly examine what their future platform strategy should look like.
Conclusion
Migrating from legacy Business Central or NAV On Prem environments will become a key issue for many organizations in the coming years. This is by no means just about infrastructure or hosting. Modern cloud platforms are changing processes, automation, reporting and the entire control of finance and accounting. At the same time, requirements for security, integration and flexibility are increasing. Companies that plan early can reduce risks in a more controlled manner while using migration as an opportunity to modernize.
FAQ
What does Business Central On Prem mean?
Business Central is operated locally on its own servers or in its own data centers.
Why will migration become important by 2027?
Microsoft is increasingly moving new features and platform developments to the cloud. At the same time, requirements for security, integration and modern platform services are increasing.
What happens if companies don’t migrate?
Legacy systems can reach their limits in terms of innovation, integration, security, and automation in the long term.
Is a Business Central migration just a technical project?
No. Migrations also affect processes, data, roles, integrations, and organizational operations.
What are the benefits of Business Central Cloud?
Among other things, better scaling, modern integrations, AI features, automation and cloud-based platform services.
What is the role of Microsoft Copilot 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?
This depends heavily on the system landscape, data quality, customizations and integrations. Many projects require several months of planning and implementation.
