Dynamics 365 to Tellency ERP: Migration Guide for Manufacturers

If you run a small manufacturing shop on Microsoft Dynamics 365 and you're eyeing the exit, you're not alone. The licensing math stops working somewhere between 15 and 40 users — and the customization bills pile up faster than scrap metal on a bad week. This guide walks through migrating to Tellency, an ai native erp built for SMBs, with the practical realities nobody puts in a sales deck.

Here's what vendors won't tell you about AI agents in ERP migrations: the software swap is the easy part. The hard part is getting your shop floor, your accountant, and your procurement lead to stop fighting the new system by week two. I'll cover that too.

Why Small Manufacturers Are Leaving Dynamics 365#

Dynamics 365 is a capable product. It's also built for companies with a full-time Dynamics administrator, a partner on retainer, and a budget that treats five-figure invoices as rounding errors. For a 30-person job shop running three CNC cells and a small assembly line, that's the wrong shape of tool.

Based on deployments I've seen, the specific pain points cluster in three areas. First, total cost — between per-user licensing, Power Platform add-ons, and partner hours, manufacturers typically report annual spend in the $60K–$180K range before they've closed a single work order faster. Second, speed of change. Want to add a new inspection step to your routing? That's a change request, a quote, and three weeks. Third, the AI story. Copilot in Dynamics is useful for drafting emails. It is not running your MRP for you.

Tellency approaches this differently. It's an ai erp for manufacturing where agents actually execute — generating POs when stock hits reorder points, reconciling supplier invoices against receipts, flagging demand shifts from your sales pipeline. That's the real pitch behind the sap alternative affordable and netsuite alternative affordable positioning: it's not just cheaper, it's doing work Dynamics makes you do by hand.

Week Zero: Planning Before You Touch Anything#

Don't start the migration. Start the audit.

Spend three to five days mapping what you actually use in Dynamics 365. Not what you licensed — what you use. In most small manufacturers I've worked with, the answer is: general ledger, AP/AR, inventory with lot tracking, production orders, and maybe a customized purchase requisition workflow. Everything else is either unused or touched once a quarter by one person.

Make four lists:

• Core workflows that must work on day one (invoicing customers, receiving inventory, running payroll if it's in Dynamics)
• Monthly workflows you can cut over in week two (period close, commission calcs, supplier statements)
• Custom fields and reports that people actually reference — get screenshots
• Integrations — your shop floor data collection, your shipping system, your CAD or PLM tool, your bank feeds

This audit is where most migrations quietly die. Teams skip it, assume "everything is critical," and then spend six weeks recreating reports nobody reads. Don't do that.

One non-obvious tip: pull your last 90 days of Dynamics audit logs and look at which forms were opened most. That tells you what's actually load-bearing, regardless of what people say in meetings.

Data Migration: The Part That Actually Takes Time#

The Tellency deployment genuinely runs in about a week for a small manufacturer. The data migration runs on its own clock, and it's where you'll spend most of your calendar time if you're not careful.

Here's the practical sequence I recommend:

Days 1–2: Master data. Export items, BOMs, routings, customers, vendors, and your chart of accounts from Dynamics. Clean them before import. I cannot stress this enough — a migration is the one time your team will tolerate deleting 800 obsolete SKUs. Use it. Tellency's import accepts CSV and has an AI-assisted mapping step that handles most field translations, but garbage in is still garbage out.

​Days 3–4: Open transactions. Open POs, open sales orders, open production orders, open AR and AP. These have to come over with their aging intact. Reconcile totals against Dynamics before and after. If your AR subledger is off by $347, find it now, not during your first Tellency month-end.

​Days 5–6: Historical data. You don't need five years of closed transactions in the live system. Archive them in a data lake or even a read-only SQL dump. Bring in 12–24 months of closed history for trending and warranty lookups. Everything older can stay in a reference archive.

​Day 7: Reconciliation and sign-off. Controller signs the trial balance. Production manager signs the WIP report. If either won't sign, don't go live. Period.

Common pitfall: units of measure. Dynamics lets you get away with some sloppy UoM conversions because everyone's learned the workarounds. Tellency's agents will surface those inconsistencies immediately, which feels like the new system is broken. It isn't — your old data was just papering over issues.

Training Your Team (Without Losing a Week of Production)#

Small manufacturers can't send their AP clerk offsite for a three-day training. You have one AP clerk. She's processing invoices.

The training model that actually works for SMBs is role-based, short, and on the real system with real data. For a 25–50 person manufacturer, plan roughly this:

• Shop floor / receiving: 45 minutes. They're scanning barcodes and clicking "receive." The UI should be simple enough that training is mostly "here's where the button moved."
• AP/AR and accounting: 3–4 hours across two sessions. Focus on period close, bank rec, and how the AI agents propose matches versus when humans still approve.
• Purchasing and planning: 4–5 hours. This is where AI agents change the workflow most — Tellency's procurement agent drafts POs based on demand forecasts, and your buyer moves from creator to reviewer. That shift takes real coaching, not just a tutorial.
• Production supervisor: 2 hours. Work order release, labor reporting, scrap entry.
• Leadership: 1 hour on dashboards and how to ask the natural-language query tool useful questions.

Honestly, the biggest training risk isn't the software. It's the buyer or scheduler who's been running the shop in their head for 15 years and quietly distrusts the AI's suggestions. Sit with them. Let them override the agent a few times. Show them the audit trail. Trust builds faster when people can see exactly why an agent proposed a $12,000 PO to a specific supplier.

Parallel Running: How Long, and What to Compare#

Run Dynamics 365 and Tellency in parallel for 10–15 business days. Longer than that and your team starts cutting corners in one system, which defeats the point.

During parallel running, reconcile these four things daily:

• Inventory on-hand by location and lot
• AP open invoice total
• AR open invoice total
• WIP value by work order

Weekly, reconcile the trial balance and production variances. Log every discrepancy. Most will trace to a timing difference or a missing setup (a tax code, a default GL account, a UoM conversion). A handful will reveal actual data problems in Dynamics that were hidden by custom reports smoothing things over. Fix them in Tellency — don't carry the fiction forward.

Here's the thing: parallel running is exhausting. Your team is doing double entry. Set a firm cutover date before you start, communicate it everywhere, and hold it unless something truly breaks. An extended parallel period signals indecision, and indecision kills adoption.

Go-Live and What You'll Miss from Dynamics 365#

Go live on a Monday, not a Friday. Not the day before month-end. Not the week your biggest customer audits you. Boring cutover dates are good cutover dates.

Day one, expect 20–30 small issues. A report someone wants that isn't built yet. A vendor who emails invoices to an address that's no longer monitored. A shipping label format that needs tweaking. Have your internal champion and one Tellency implementation contact on standby for the first five business days. Most issues resolve in under an hour.

Now the honest part — what you'll miss from Dynamics 365:

• Deep Power BI integration. If your analytics team lives in Power BI, you'll need to point it at Tellency's data warehouse connector. It works, but it's not as tight out of the box.
• Some industry-specific ISV add-ons. If you run a specialized Dynamics ISV for, say, metal service center pricing or food traceability, verify Tellency covers those workflows natively before you commit. In most cases the AI-driven customization ("describe the workflow, the system builds it") handles it, but verify.
• The Microsoft ecosystem gravity. Teams, Outlook, SharePoint deep hooks. Tellency integrates with Microsoft 365, but it's not the same as being inside the tenant.

What compensates: deployment in a week instead of six months, pricing roughly 70% below comparable Dynamics 365 + partner setups, and AI agents doing procurement drafts, invoice matching, inventory reorders, and demand forecasting without a separate Copilot license. For a small manufacturer where the CFO is also the HR director is also the IT lead, that trade is usually worth making.

Your Next Step#

If you're seriously considering this migration, start with the audit I described in week zero — you can do that without committing to anything. Then request a scoped demo using your actual item master and BOM structure, not a canned dataset. That's the only way to see whether an ai native erp system fits your specific shop.

Try Tellency ERP with a manufacturing-focused pilot, and bring your messiest data. The system that handles your real mess is the one worth switching to.