2. Setup & Configure organizational hierarchy for Legal Entity

Introduction

Before creating retail channels in Dynamics 365, it is essential to configure your organizational hierarchies. Organizational hierarchies provide a structured way to represent your business and enable reporting, analysis, and operational control from multiple perspectives.

By using organizational hierarchies, you can view your organization by legal entities, operating units, cost centers, or channels—ensuring alignment between your business structure and system configuration.

Prerequisites

Before creating an organizational hierarchy, ensure that the required organizations are already defined in the system, such as:

• Legal entities
• Operating units
• Cost centers
• Other relevant organizational units

These entities form the foundation of the hierarchy and must exist before the hierarchy can be created.

Create an Organizational Hierarchy

To create a new organizational hierarchy, follow the steps below:

1. In the navigation pane, go to
   Modules > Organization administration > Organizations > Organization hierarchies.
2. On the Action Pane, select New.
3. In the Name field, (Retail Stores by Region).
4. In the Purpose section, Click on Assign purpose.
5. From the list, select the appropriate purpose (for example, Retail assortment).
6. In the Assigned hierarchies section, select Add and mark the hierarchy Retail Stores by Region and select OK.

Add Organizations to the Hierarchy

After creating the hierarchy, you can begin adding organizations to define the business structure.

Follow these steps to add organizations:

1. Select the organizational hierarchy you created.
2. On the Action Pane, select View.
3. To modify the structure, select Edit, then choose Insert to add organizations.
4. choose legal entity and Select USRT From list and Click OK
5. When finished, save the draft and Publish the hierarchy to make it active.

Example Hierarchy Structure

In a typical retail scenario:

• A Legal Entity is placed at the root of the hierarchy.
• Under the legal entity, Cost Centers are added for channels such as:
  • Mall
  • Outlet
  • Online
  • Call Center
• Individual retail stores, call center units, and online channels can then be added under their respective cost centers.

This structured approach ensures clarity, scalability, and accurate reporting across all retail operations.