Somerset councils merge and modernize with Dynamics 365

Change enhances community service

Somerset is a region in South West England, with approximately 562,000 people living among scenic hills and wetlands. The Somerset Council has over 5,000 staff who deliver a wide range of services to the people of Somerset, such as planning, household waste collection and recycling, and tourism. Other support offerings include delivering government-funded regeneration projects, business licensing, road upkeep, and looking after vulnerable children and adults — all of which require strict and compliant financial management and reporting.

Historically, the area had five separate councils, each with its own governance and financial management systems. Some of the business and financial managers relied on old accounting systems and had to fill in the duplications, gaps, and inefficiencies with manual processes. Their leaders wanted to find a better way, and by 2022, a new government mandate provided the opportunity to do just that.

The UK government's Local Government Reorganisation (LGR) agenda—the nationwide policy to update data security, financial records, and ICT systems with the aim of consolidation, improved compliance, and cost savings—led to the creation of Somerset Council. Nearby councils would join forces, harmonizing processes and systems, while achieving cost-savings and streamlining targets. The main goal for all five councils was to serve their communities better by using enhanced, more efficient systems for business planning, forecasting, funds disbursements, and financial reporting for all program areas they managed. This new government policy offered a chance for a much-needed, major system overhaul.

Andy Kennell, Information and Communications Technology Services Director, Somerset Council was pleased to seize the opportunity. “The main driver, along with a single system for the new unitary authority, was to build upon the Microsoft platform we had already invested in. The ability to utilise already familiar technologies allows us to be in control of how we support, develop, and enhance the new finance system” 

Inefficiencies caused by a web of systems

When the five councils came together, between them, they were using 50 different applications, none of which connected to a centralized system. Given the relatively short timeline required by the new mandate, they urgently needed to merge, integrate, and improve their business processes. Per guidance from the government, they would begin with their financial management needs first. All five separate systems and the supporting, non-standardized applications would have to be shut down and replaced, or securely integrated into one modern and compliant platform. And, because the government demanded evidence of a successful implementation of at least basic accounting systems in place within 10 months, the migration timeline was not flexible. Critical core capabilities had to be in place and working successfully. 

Five councils merge, as do financial systems

With a high need for accuracy, Somerset's Operations team took the initiative to develop a detailed implementation plan. The Council sought help from a Microsoft Customer Success Account Manager (CSAM) and Dynamics Customer Success Management teams for a coordinated effort to finish this complex project. From project planning and technical consulting, to offering ongoing support and training workshops, Microsoft Dynamics 365 experts helped achieve a smooth implementation and easy adoption of Somerset Council's new centralized system.

To address the technology challenges of the five councils, Somerset Council leaders hired Ernst & Young (EY) partners to evaluate their current situation. Due to the merger, they discovered 51 different interfaces connected to four discrete enterprise resource planning (ERP) systems. The EY team recommended using Logic Apps B2B as the basis for all integrations. This would create one modern and consistent platform that would integrate all the necessary applications and Dynamics 365 Finance, with built-in government compliance, would make it easy for Somerset Council employees to use. The implementation would not only meet each government requirement, but also enable the Council to provide better services in every area they serve their community. 

Using a practical “workshop and playback” approach, EY repeated the implementation several times, including users in the process and regularly doing typical customer invoicing, journaling, and audit tasks to make sure the data was aligned correctly—and the app worked well at every stage. Then, they extracted huge amounts of data from the old systems for all five council data sources, which involved significant effort in data validation and processing across many storage locations and asset types. Finally, the EY team worked with Somerset Council ICT teams and financial management users to carefully test the system.

Finance transformation harmonizes ways of working

The aim of the Dynamics 365 project for Somerset Council was to provide a single general ledger for the larger organization and harmonize the very different processes and interfaces inherited from the five legacy councils. Without it, the new organization’s financial processes would have been time-consuming and involve lots of manual processes and cross checking to ensure the system was compliant. It also gave Somerset Council the opportunity to start processes afresh and set a new culture for finance and procurement activities. A new 'No PO, No Pay' process was introduced and adopted across the whole organization, which in the legacy councils had not been achieved. “Dynamics 365 pulls critical data into the new ERP system, then efficiently parses relevant data out of the centralised system to our financial systems. Somerset Council is one unified business group now with true integration in our processes to better serve its community” says Chris Brink, Senior Manager IT Development, Ernst & Young.

Somerset Council's new Dynamics 365 platform not only meets the Local Government Reorganisation requirements of a single finance system, but it is also one unified source of truth, where all data is stored on a single compliant platform. The consolidation of five council’s united teams was a rapid transition that delivered a functioning system within 10 months of the project kick off. “To deliver this project in around 10 months alongside the wider Somerset Council consolidation effort is a phenomenal achievement and would not have been possible without [the] flexibility and adaptability of Dynamics 365 and the knowledge and experience of those team members from Ernst & Young” explained Andy Kennell, Information and Communications Technology Services Director, Somerset Council. This change could have been a significant challenge to the organization's staff, processes, and financial health without the smart integration offered by Dynamics 365.

Within eight months of the go-live date, Dynamics 365 evolved from a functioning minimum viable product system into a fully functional solution, with employees utilizing its standard, out-of-the-box processes and sticking with 'Adopt not Adapt' principles of the transition project. 

Council leadership is now exploring new possibilities around automation, analytics, and Microsoft Copilot to serve the greater community as it expands.

Community service on the horizon

Based on Microsoft Dynamics 365 Finance and Supply Chain Management, Somerset's new solution for government compliance positions the Council well for future expansion and innovation, giving the council effective, integrated, and automated business operations—promoting growth and offering flexible financial reporting, embedded analytics, and AI-driven business insights. In fact, the team is exploring Business Performance Analytics (BPA) and connecting Dynamics 365 to Fabric to build upon the strong foundation it has laid with Power BI and Azure Data Lakes. Kennell is excited for the future adding, “We’re poised to build on the platform and leverage new Microsoft technologies that are aligned with Dynamics. We’re already looking ahead to explore the opportunities Microsoft Copilot can bring to Dynamics 365 Finance.” 

Somerset Council handles its finances with ease while remaining compliant and forward-looking. Dynamics 365 is delivering smooth updates to keep its financial system up to date and prepared for the future, making sure today’s investments serve future Council developments. From funding for community programs to planning for tomorrow, Somerset Council trusts in the capabilities of Dynamics 365 to grow with them.