Things to consider when changing existing item from Basic to Advanced warehousing in D365 SCM

 1. First step is to remove storage dimension group on the Product level (not item level). Otherwise you will get the follwoing message:

The storage dimension group cannot be changed for the item. Remove the existing storage dimension group on the corresponding product before changing the item's storage dimension group.

2. You can only change the item which alreday has location dimension enabled. Otherwise you will get the following message:

You can only change the storage dimension group for items with an active location storage dimension.

If you don't have location dimension enabled, then you will need address this problem first and move your products to location enabled dimension.

You will need to perform the following according to the info shared here: How to change the Storage dimension group on items with existing Inventory transactions - Microsoft Dynamics 365 Blog

Note: I have tried the steps below and it worked. However I skipped inventory close procedure.

1. Count inventory down to zero. You will need to temporarily remove any existing reservations, registrations, etc.
2. Perform an Inventory close (Inventory management > Periodic > Closing and adjustment)
3. After performing the inventory close, you can change the storage dimension group at the Released item level.
4. Note that you will not be able to make this change unless the current session date is after the date of Inventory closing.

3. You can only change the item with storage dimensions that matches to the new storage dimensions in terms of inventory parameters. Otherwise you will get the following message:

The settings for active, blank receipt allowed, blank issue allowed, physical inventory, and financial inventory must match the settings of the current storage dimension group.

When you decide what is the best approach for changing your settings in the future, my recommendation is the following:

• If you are considering Basic or Advanced warehousing, then start with the Basic and later on you will upgrade to the Advanced. You cannot downgrade it from Advanced to Basic. 
• Start with active Location dimension enabled, it will simplify your life later when you decide to upgrade. For instance, you can use Warehouse=Location (1:1 values) if you don't have any locations yet.
• Set up storage dimensions smart from the beginning so it does not require any change later. 

That's it!