Implementing ERP is a complicated endeavor for any organization, but it’s much more challenging when you have a global ERP implementation.
There are a host of issues to consider as you plan a global ERP implementation, from differences in languages to a variety of tax regulations in different countries. In this podcast, Gerry Kistler, president and CEO of KCP Dynamics, discusses a few things that organizations should know before beginning a global ERP implementation. Kistler is a veteran of more than 20 years of implementing global ERP systems, and his company plans, implements and supports Microsoft Dynamics systems in more than 60 countries.
Kistler says you need to make two major choices before beginning a project. The first is to decide if you will do a phased rollout, which implements the system incrementally, or a “big bang” rollout, where the system is implemented as a whole in one big push. Second, you need to decide if you want to standardize business processes across the system or allow local entities to run their own processes.
In either decision, Kistler says, you must take local legal regulations into account. Latin America is particularly complex, with each country having its own Byzantine tax system that needs to be configured in the system. Brazil, for example, can have up to five different taxes on a single transaction.
Most important, Kistler explains, is to bring together everyone involved in the process and determine the approach to take before it starts. He says you must gather people in the enterprise from around the world and get them in the same room — live or virtual — to determine the processes.
“They need to go through and outline the basic processes that you do, where they’re done, what you can standardize and what may have different variations,” Kistler says. “Then come up with the decision — are we going to build in all the different variations that we have in all countries, or are we going to move everybody to one standard process?”
One reason you need to have everyone on the same page is that either approach for the implementation and process strategies has its own strengths and weaknesses. The advantage of the big bang theory is that the software is implemented in all locations at the same time, Kistler explains. However, this means that you need to have a lot of teams to do the implementations and follow-up support, which may cost more and lead to loss of control. A phased approach takes more time, but allows you to have one key team involved in the implementations at all locations, ensuring consistency throughout the process.
There’s no one right answer for your approach. “The best thing is to do really good analysis upfront so that you know what your environment looks like,” Kistler says. “From there, make a decision as to one, how you’re going to formulate the software, and then two, how you’re going to roll out.”
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