Deciding on ERP implementation after a divestment decision, saved Dynea 2m Euros in potential discounts

“You’ve put yourself in a perfect position for being sold.” The pre-purchase IT advisor for a potential buyer was impressed with the flexibility and scalability of Dynea’s new IT infrastructure and business system.

Preparing for a sale of the entire company while not knowing which facilities would be sold to whom, Dynea became aware that business system inefficiencies could result in large discounts, massive split-up costs and, in worst case, lack of attracted buyers.

Through a thorough analysis, strategy recommendation, and implementation of a simple and perfectly fitted ERP [Enterprise Resource Planning] platform, IZARA helped Dynea mitigate IT-related divestment discounts by

  • Showcasing a flexible and scalable standard ERP solution with low, fixed cost
  • Providing full transparency of the individual facility’s activities
  • Mitigate large rectification costs and potential discounts

Dynea dates back to 1947 when it first started as a chemical company and has since undergone major changes to its core business and structure. It is now well-known for its industrial adhesive products, and had in 2011, when IZARA was engaged, 42 production facilities in Europe and Asia. Towards the end of 2011 the owners of the Dynea Group decided to split up and divest clusters of production facilities to various international buyers. To minimise potential obstacles and expensive IT and sales liabilities, Dynea’s management team engaged IZARA to analyse the current infrastructure and business systems.

During the analysis conducted by IZARA and Dynea new CIO, it became apparent that the business system was not attuned to the business requirements. Major pain points included

  • Poorly integrated ERP solution and training in same led to time waste, lack of built-in automation, and high data inconsistencies,
  • Lack of business planning tools severely impacted procurement efficiency,
  • Manual reporting processed caused heavy delays in management transparency.

The analysis further revealed that the hosting/outsourcing agreement was inflexible and non-scalable and would results in massive IT cost for all entities, and thus a significant divestment discount in a split-up scenario.

Based on the analysis, we identified three business system strategy options, namely to

  1. Leave as is and sell with a significant discount,
  2. Upgrade to a more flexible and scalable standard solution of current system, but have no solution for small company clusters in the split-up,
  3. Adopt a different, simpler, more cost effective and better needs-suited system.

Following a thorough testing phase IZARA confirmed to Dynea’s Board that the business system could be simplified by running all facilities on a standard ERP platform without customization, that costs could be cut significantly through a flexible and scalable license agreement that allowed splitting up the licenses when divesting, and that it would be possible to complete the implementation in 10 identified facilities and within 10 months, before completion of the sales.

IZARA and a select team of Dynea subject matter experts were put in charge of the implementation, ensuring timeliness and budgets, setting go-live goals and deliverables. As agreed, the best-suited ERP platform, Dynamics AX, was implemented across the 10 facilities, within 10 months.

Following the successful implementation, infrastructure and business systems were no longer a liability as Dynea had obtained

  • Detailed production information from each individual facility
  • Smooth operations with no limiting IT dependencies and at low cost
  • Possibility to split licenses and operations in exactly the constellation the facilities would be sold

Overall, IZARA made Dynea’s infrastructure and business systems sales ready, optimised all identified facilities, including those not for sales, and saved Dynea 2 million Euro in potential divestment discounts.

“IZARA gave our company a tough decision to make, based on the thorough analysis of our facilities. I say tough decision because agreeing on an ERP implementation just before a scheduled sale to many people, myself included, seems like a risky, costly, and useless activity. But through the honest and straight-forward partnership, IZARA helped us gain the transparency our potential buyers needed to make an informed decision and the scalability we needed to divest the facilities as there was a demand for. Overall, we estimate a saving of around 2 million Euro in potential discounts and a much shorter, and smoother divestment.”

Henrik Vildenfeldt, CFO, Dynea

About us
At IZARA we put your freedom first. Freedom from overspent IT projects and disruptions. Freedom through a long-term partnership focusing on reaching your objectives. Because as your ERP partner we give you the freedom to choose a future in which IT is a scalable helping hand, business enabler, predictable monthly budget post, and a mean to a business oriented, leaner and less complicated organisation.

IZARA – Peace of mind, as a service.

Allowing transparency and predictability to drive MCI’s performance.

For MCI [Maersk Container Industry], an outdated business system had resulted in a shift towards spreadsheet usage and non-optimal communication across the global operations. After the successful Dynamics 365 implementation MCI had improved its

  • transparency and understanding of risks and costs,
  • data consistency and accurate cost settings,
  • predictability and pro-active, data-driven decisions.

MCI manufactures refrigerated containers, refrigeration machines and dry containers to the intermodal industry, which covers shipping lines, fruit multinationals and leasing companies. Furthermore, MCI has a global after sales service network and sells spare parts to 400 service providers across the world. With a production of 400 dry and more than 150 highly technical reefer containers per day in the facilities in Chile, South and North China, seamless communication and transparency is key.

In 2015, MCI and IZARA partnered to conduct a thorough infrastructure and application landscape review to assess the current state and outline a path for the future.

During the analysis phase, we found that MCI was facing some of the most common challenges for businesses operating in a margin-driven industry, namely outdated and single resource dependent infrastructure and an ERP which was neither fully implemented nor up to date. Thus, MCI could benefit from improved

  • communication through access from all locations,
  • data consistency through a single data repository and maintenance,
  • transparency of cost and resource usage,
  • planning tools,
  • user rights control and segregation of duties.

All in all, the analysis depicted a sizeable improvement potential for MCI, both in the internal use of systems and applications as well as in the customer facing parts of the business. The journey forward was named “Ten years in one” to highlight both the size of the change and the speed in which it would be implemented.

To determine the best way forward, MCI and IZARA immediately started identifying the selection criteria and with keywords such as predictability, flexibility, and scalability and a desire to move IT from internal pain to external service, a perfect fit was found in the cloud- and subscription-based Dynamics 365.Based on the analysis, we identified three alternative strategies: a) leave as is and accept, that the business system wouldn’t be as business enabling as newer systems allow for, b) upgrade from the current business system, M3 version 6 to version 13 which would mean re-implementation, and c) look at alternative ERP solutions.

The pre-implementation testing phase showed that majority of the standard Dynamics 365 components were suitable for MCI which would not only make the solution easily supported but also improve MCI’s time-to-value significantly. The final solution comprises of a standard ERP system with seven add-on ISV solutions centered in an AZURE datacenter on the US east-coast as that network-wise has proven to be the right ‘center of the world’ for MCI’s global operations.

MCI’s new and stronger backbone integrates 700 users in the four MCI locations, connects 400 service providers through real-time integrated e-commerce, seven global 3rd party logistics distribution centers, mobile device framework for efficient warehouse and shop floor operation, and can receive EDI orders directly from the needing vessels and other customers.

The case also revealed how resource-intensive manual testing is for successful ERP implementation and upgrades. MCI’s new solution therefore ensures monthly patches and bi-annual feature upgrades by IZARA’s partner Sonata. This is ensured through test-automation of 90% of discrete and end-to-end business processes.

The business add-on and improvement phase is still ongoing, with no disruptions of course. So far 700 users have been moved to the new platform and we expect 50-100 users to follow in the next 3-6 months as we move into QC management, product lifecycle management integration, and digitalization of internal operations.

“Dynamics 365 has provided us with increased transparency and flexibility across our businesses, supporting data driven decision throughout the value chain.

IZARA assisted us in analysing and mapping our IT-spend and confirmed that we probably did not spend too much in total, but a big part of the spend was not really-value adding activities. After a thorough business objective and needs analysis by IZARA, Dynamics 365 in the cloud and surrounding services was shortlisted. During implementation IZARA took charge of project management as well as finance lead to ensure implementation of the agreed project objectives in all corners of the company.

Post go-live IZARA is still dedicated to optimizing our implementation and usage, helping us setting the direction and ambition for the usage and integration of the business system as an evergreen solution so we hopefully never have to implement again…unless technology disrupts.

Lars Heineke, CFO, MCI Group

For a short video on the Microsoft Dynamics implementation at MCI, click here.

About us

At IZARA we put your freedom first. Freedom from overspent IT projects and disruptions. Freedom through a long-term partnership focusing on reaching your objectives. Because as your ERP partner we give you the freedom to choose a future in which IT is a scalable helping hand, business enabler, predictable monthly budget post, and a mean to a business oriented, leaner and less complicated organisation.

IZARA – Peace of mind, as a service.

IZARA – A strong focus on peace of mind and long-term partnerships

Experienced and complimenting forces merge together in a new and strong IZARA. With a focus on cloud-based IT “as a service” and dreams of changing the global view on business systems, IZARA is a different warrior in the battle against large, disrupting IT projects and expensive consultancy hours.

”It has grown under the surface for a long time, this idea that the IT industry is stuck in an outdated illusion about the need for complex ERP solutions (Enterprise Resource Planning), heavy racks in the basement and a larger division of internal IT experts to control and maintain them.” Jakob Ingemann, founder of the original IZARA and now CEO and Partner in our new IZARA, and he is a visionary with great hopes for the industry which he has played a part in for more than two decades. He glances around the modern Copenhagen-based office and smiles as his eyes catch sight of the dark purple wall in the middle of the room. ”We build long-term partnership that give our customer the freedom to develop the business.”

On the same side of the table is Thomas Henrik Meede, who founded and owned the other part of the equation, the company AXspecialists. Thomas has more than 20 years of expertise in delivering ERP solutions, and has, together with his highly specialised team, worked as a “crisis task force” which has saved global ERP projects that have gone wrong.

And it is exactly here, in the air between the experienced CFO, CIO, and advisor on one side and one of the world’s leading Microsoft Dynamics AX specialists on the other, that IZARA has grown and introduces new industry standards and goals.

Peace of mind, as a service
IZARA is all about creating freedom and peace of mind with our customers. Jakob has been on the other side of the table and from his time in top management positions he knows their exact pain points. From the moment you realise your organisation has outgrown it’s own limits, the horrifying consultancy hour-prices on ”upgrading” IT project, which never fail to disappoint the expected massive exceeding of both timelines and budget. Not to mention long disruption setbacks that hinder growth, regularly.

“We offer a package which includes a standardized and cloud-based Dynamics 365 and apps as a service and with a flexible service agreement. That gives our customers faster time-to-value, fewer disruptions during implementation and, most importantly, a stable, safe, and always updated underlying subscription-based business system which can be scaled up and down, exactly the way our customers need it. Through flexibility, scalability and simplification we give our customers the best possible optimisation of innovation and realisation of their growth potential” Jakob says.

The 3rd spice – uncompromised expertise, flexibility and professionalism
Further to the merger between the two companies and their core competencies, we will also offer services through a partnership with Sonata Software, a leading global software solutions provider with expertise in offering digital solutions to businesses in the travel, retail, cpg, distribution and software product development space. Sonata brings it’s proprietary digital industry platforms, over thirty years of expertise in outsourcing IT solutions for Fortune 500 customers and a global delivery footprint, which can be extended to offer unmatched flexibility and capability to Izara customers’ technology needs. Sonata is an award winning Microsoft Dynamics and SAP Hybris partner with industry specific solutions to implement Digital solutions on these platforms too.

IZARA is further strengthened with Peter Mægbæk (founder and CEO of Plenti) as both investor and Chairman of the Board. He sees a large potential in the future of the business: ”There is no doubt that Thomas and Jakob are leading the market and just the fact that they work with solutions as a service is extremely appealing for me, as I have a passion for subscription-based businesses.”