Deciding to implement a global ERP system is not one that should be made lightly. The truth is this can be a very challenging transition to. Are you ready to take on the challenge of global ERP implementation? It can be daunting, like when you are at the top of a ski slope thinking you are ready to push off. To make this process easier, first determine if this is even the best strategy for your company. Here are six things you should consider before embarking on a global ERP implementation:
1. Consider the size and reach of your business.
Just like skiing, if you have not been growing your skill level you might not be ready for this big of a mountain. The primary reasons to even consider making the switch to a global ERP system are size, scale and locations. If you have multiple sites and operate on a worldwide level, a global system may be necessary or desirable. It will allow for standardized business practices, streamlined processes and faster financial reporting. If your company does not have this type of footprint, there may not be a need to go global. If it does, consider adding the services of an independent ERP consultant to help navigate. Global ERP implementations are difficult and fraught with unknowns.
2. Evaluate possible language and cultural barriers.
Trying to get everyone in your company on the same page can be hard, mainly when there are issues with communication. This can lead to a significant breakdown of the ERP planning and implementation process. In fact, underestimating the impact of culture is one of the primary reasons of global ERP implementation failure. This is why it is imperative that you partner with someone who has experience and expertise in the language and culture of the country you are working in. This will help avoid language barriers, prevent you from committing cultural taboos and help you gain the trust of your company’s local team.
3. Have a clear understanding of the country requirements.
Every country has different (and sometimes intricate) requirements when it comes to taxes, currencies and regulatory reporting. Without even realizing it, you could fall out of compliance and be subject to penalties. Global ERP systems necessitate understanding each country’s requirements and nuances. Countries can operate very differently. While may use a flat tax rate regardless of profit, some countries (Italy and Germany, for example) have alternate tax models that correlate the effective tax rate with increasing profits. Matching and testing them within your ERP system can be complex at best.
4. Find an ERP system that provides a balance between localized and global processes.
Global ERP systems give you the opportunity to standardize as much as possible. When determining how to do this you should be sure to identify methods that will work best for everyone. Be willing to bridge differences that will make it easier for everyone to accomplish crucial tasks and build a healthy relationship between the various locations. This is also the time to determine whether your support will be global, localized or customized.
5. Think about your rollout style
Are you planning to go-live with all features and geographies simultaneously or will you roll out in phases, based on geography and/or features? This will largely depend on the experience of your implementation team and other resources, as well as any legacy system constraints. Keep in mind that a well-defined phased implementation offers significant advantages including decreased ERP failure risk.
6. Develop a clear plan for cleaning and migrating all data
Determine how data and growth will be managed now and in the future. How much data will be transferred to the new system? Another way of thinking about this is your ERP initiative should be geared for the future state business challenges and opportunities. For example, can local offices control their local accounts or will any changes require centralized governance?
Don’t jump off on this big mountain without anticipating all the pitfalls, bumps and angles. Contact Panorama Consulting Solutions to help determine and validate if this is the right time and approach for your global ERP implementation.