D365 Finance and Operation version upgrade process for Cloud hosted environments

Overview: Microsoft has made version upgrades mandatory in Dynamics 365 Finance and Operations. You are allowed to skip only one version during the upgrade process.

Example: If your current version is V46, you can skip V47, but then you must upgrade to V48. If you don’t, Microsoft will automatically upgrade your Production (PROD) and Tier-2 (UAT/Pre-Prod) environments.

Key Points Before Starting

- Do not upgrade your Tier-2 (UAT/Pre-Prod) to a Preview version.

- Preview versions are for exploring new features only.

- Always wait for the General Availability (GA) release before testing or upgrading.

Upgrade Process – Step by Step

1) Identify the version you need to upgrade (e.g., V47 or V48).

2) Review the Microsoft release plan for upgrade timelines. (Note: Dates may shift in some cases.)

3) Go to LCS > Asset Library → Click Import to check if the version package is available.

Ex: Below screenshots show V44.

4) Download the upgrade package to your project.

5) Start the upgrade activity initially with 1 Dev VM and 1 Test (TST) VM.

6) Navigate to your Dev/TST VM → Full details → Go to Maintain →  Apply Upgrade.

7) Select the downloaded package. Confirm if prompted.

8) Monitor the upgrade process on the Environment Details page.

9) The system usually runs 62–64 steps. Once completed, verify the upgrade is shown on the Environment Details page.

At this stage, Dev & TST VMs are upgraded and ready for testing.

Few of Challenges faced during previous upgrades

Scenario 1 – Upgrade from V40 to V42

- The upgrade may fail at step 24 (or another step).

- For V42, additional components must be installed in Visual Studio for LCS Cloud-hosted Dev/TST environments.

- For Tier-2 and PROD, Microsoft handles this automatically.

Scenario 2 – Upgrade from V38 to V40

- Build may fail if a custom package does not reference a newly added module.

- Always check the runbook log to find the cause of failure.

If you cannot resolve the issue, raise a support case with Microsoft. However, note:

- Microsoft support may only give suggestions.

- Sometimes, they may recommend decommissioning the existing VM instead of fixing it for Cloud hosted dev.

Testing Process After Upgrade

1) Download feature list for Finance & SCM from MS portal and track them in Excel.

2) If upgrading from V46 → V48, also download release notes for V47, since V48 includes V47 features.

3) Check for features enabled by default (mandatory). Some may not appear in Microsoft’s documentation but could still be active after upgrade. Include these in your testing.

4) Work with Finance & SCM functional consultants to identify features relevant to your business.

5) Focus only on features impacting your business processes instead of testing every released feature.

6) Validate that existing customizations and business scenarios still work.

7) After Dev/TST validation, upgrade your Tier-2 (UAT/Pre-Prod) and run test cases again.

8) Involve your client’s internal testing team to execute scenarios and provide sign-off.

9) Finally, plan the Production upgrade. The process is similar to moving custom packages from Tier-2(UAT/Pre-prod) to PROD.

10) Upgrade your build and other environment to match with Prod environment version.

Final Notes

- Always keep track of new features introduced in every version, but test only those relevant to your business.

- Document issues faced during upgrade, along with logs.

- Get proper sign-off before moving to Production.

- In some cases, the Tier-2 and PROD will be upgraded automatically by Microsoft, but the Dev and TST VM will be older version. We have to make sure all our Dev/TST/Build VM versions are matching with your PROD VM, skipping or working on lover version is not recommended.

How to skip the version upgrade process for more than one version:

It's with Microsoft team, if you have a valid business reason's, MS team will allow you to skip multiple version upgrade process, so that your Tier 2 and PROD will not upgrade forcefully.

Disclaimer: Please note that these suggestions are based on my personal experience and may not be the only version upgrade process. As always, thoroughly discuss your senior technical team and test any changes in your test environment before upgrading the PROD.