What is an Organization ?
An organization is a group of people who are working together to carry out a business process or achieve a goal.
Organizational hierarchies represent the relationships between the organizations that make up your business.
Why is Organizational hierarchy required ?
Hierarchies can be used for Policies ,Organization charts , Data access , Budget planning ,Project management .
*To view and report on your business from different perspectives
*To create a purchasing hierarchy to control purchasing policies, rules, and business processes.
*Each hierarchy is assigned a purpose in Microsoft Dynamics AX.
*The purpose of a hierarchy determines the types of organizations that can be included in the hierarchy.
*The purpose also determines which application scenarios a hierarchy can be used in.
*An organization can inherit or override the parameters of its parent organization. However, shared master data, such as products and address books, applies to the whole organization and cannot be overridden for individual organizations.
How to create Organizational hierarchy in AX?
CEU->Organization administration->Common->Organizations->Organizational hierarchies.
Click on New Define Name->Organizational hierarchy->Insert->Legal Entity
Click on Legal Entity->Insert->select departments as per organization structure .
Scenario
We want to restrict an user based on his department .User belonging to Dept. Administrator should be able to access the cost centers till range 1 to 100 and user belonging to Dept. Marketing
Should be accessing Cost centers from 101 to 200.
We designed our organization hierarchy accordingly and publish it.
Now we need to go to the Account structure click edit.
Relationships ->Select the created hierarchy.
Now that we want to control the entry of the cost centers based on selection made for the department dimension, select the record which shows Party A = Department and Party B = Cost center and click Ok button ->Activate it.
Navigate to GL > Journals > General journal ->New ->Lines
Enter the Main account -> Department; as soon as we enter department system only shows the Cost Centers we had set up in Organization hierarchy under department.
Further select the values, Amount and post.
Organization hierarchy in financial reports:
Financial reports are very essential part of business .As you create organization hierarchies in Dynamics AX, these hierarchies are dynamically created as Reporting Trees in Management Reporter.
Management reporter is a powerful tool used to create statutory and operational reports based upon your general ledger data. It empowers your managers by providing real-time insights into organizational results; they can take action and work to meet overall corporate goals.
How to use Organization hierarchy in financial Reports ?
Management Reporter is integrated with Dynamics AX ,Every time a new organisational hierarchy is created in AX a new reporting tree with the effective date gets dynamically created in MR .
When choosing an organization hierarchy in Report definition select the desired organization hierarchy and click on Generate button.
Here are some of the ways Management Reporter can help solve your financial reporting needs:
No need to create a connection to Microsoft Dynamics AX 2012 General Ledger (GL) – Management Reporter is directly integrated with your GL
Build custom reports based on Microsoft Dynamics AX ledger accounts and dimensions – with the ability to slice general ledger information into Rows, Columns, or Hierarchies to get insight into actionable information. Robust formatting helps highlight key areas on a report and create boardroom quality reports.
Organization hierarchy in purchase policies and procurement.
What is Purchasing Policy ?
A purchasing policy is a collection of rules that control the requisition process.With the help of these policies procurement administrators can plan their strategies which aligns best with the organizations purchasing needs.
Scenario
An organization operates its business as Head office and regional office and it has Administration departments set in both the offices. The organization wants its Head office – Administration department employees to be restricted to raise the requisition for only the “Laptops category” whereas the regional office –administration department should be restricted to “Desktop computers” Category.
In the above case, let us create “Head office” and “Regional office” as Business units for the organization and “HO-Admin”, “RO-Admin” as the departments.
Make sure that after creating organization hierarchy you have assigned purpose "Procurement Internal control” In order to make it reflected under "procurement policies"
To create new policy go to Procurement and sourcing>Setup> Policies> Purchasing policies> click new
Name->Click Parameters button->Add the desired hierarchy to the order of precedence.
By adding the hierarchy, we can set up the policies for any element(either business unit or department) in the hierarchy.
Policy organizations -> Select organization hierarchy ->Add the legal entity node, business entity and department nodes to “Selected organization nodes”.
Policy Rules->Click Create policy rule to define the rule. Focus on the desired Category -> Select button to move them to the Selected Categories ->Click OK.
Now, for “HO-Admin” department, only the laptop category is applicable. If any user from this department create a purchaser requisition then, only the items under category “Laptops” can be seen and user can request only those items.