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.