8 tips for a successful ERP implementation abroad
As cut-throat competition is constantly growing, foreign markets are becoming more and more attractive to SMEs. According to the latest study by Kienbaum, more than 30% of the German companies interviewed see great potential for growth in Europe and overseas. However, only 15% of the division managers, department heads and team leaders are convinced that internationalization is being sufficiently promoted in their own company. A central element of success is the international use of an ERP system as the digital backbone of all business divisions.
But the question is: What factors are decisive in order for companies to successfully compete in the international market? Productivity, speed and efficiency are key here. We'll show you 8 aspects of an ERP roll-out that will have hidden champions shine on the international stage as well:
Communication is key
Turn the cultural challenges into an opportunity for your business. Every country has different decision-making and planning processes. We recommend to take as much time as possible at the beginning of the project to define a common procedure with all parties involved. Establish a plan with clearly defined and documented project goals and processes. This will prevent misinterpretation from the beginning. Functioning processes are an important basis for being well connected and successful abroad as well.
Overcome language barriers
English has established itself as the working and project language in the international environment. Especially the communication between native speakers and non-native speakers often depends on nuances that might lead to misunderstandings and jeopardize the project's success. For the preparation of your ERP roll-out abroad, you should therefore rely on project managers with international experience that can stay clear of linguistic pitfalls.
Identify local requirements
The legal regulations for companies differ from one country to another, if not regionally. In order to brace yourself for all eventualities, you should familiarize yourself with the relevant regulations already before establishing a foreign branch. It's also useful to know the business practices of the target country. A standardized questionnaire for the ERP roll-out doesn't make sense here since important success criteria might go unnoticed. For this purpose, proALPHA holds workshops where users can openly discuss their obstacles and define individual requirements. Specific questions will then help to get the big picture.
Involve IT from the start
The technical architecture for an international use of ERP software must be defined as early as possible. It's usually not enough to just add some user accounts. The setup in the back end is an essential success factor for your project.
One possible scenario is to add another company to your existing database. This saves license costs, reduces the time required for the implementation, and facilitates the data exchange. However, it also means that all countries depend on one database server. If you want to react more flexibly to maintenance work and local requirements, you should implement scenario no. 2: Every location receives its own database, which entails additional license costs and more workload for implementing updates.
Standardization and its limits
Individual requirements for workflows and data structures quickly lead to deviations from the standard programming in the ERP system, especially in the company headquarters. However, since most foreign branches are more compact and require less special tools, it rarely makes sense to adopt the entire architecture. The solution is to develop a setup with several international subsidiaries and to modify the standard version as little as possible for your branches. This way, adjustments per company or country can be realized more easily.
Introduce mandatory master data management
Unlock the potential of the master company concept as a useful tool for central master data management when the locations' processes are similar and the same data are used. Despite the high effort, this will help you uncover the potential of a globally uniform ERP system and to harness it for your company. The master data are stored and updated centrally, and can be replicated to other companies. It's important to differentiate between global and local master data to take regional and national differences into account, for example, for the parameterization of country-specific tax laws.
Local languages are the key
It should be possible to adjust ERP systems to the requirements of the respective user, not least regarding the language version. Even if English-language user interfaces and menus are often the international standard, masks in the local language make the work much more comfortable. If your ERP provider does not have a language version for your requirements in their portfolio, they should at least provide a translation kit.
Is on-site consulting necessary?
Consultant days on site are a huge cost factor for the roll-out of an ERP system abroad. You should therefore limit them to an absolute minimum. In coordination with the project manager, you define the tasks that must be completed on site at the respective location. Country-specific settings of the ERP software and other work that doesn't require knowledge of customer specifics can then be completed comfortably and less costly via remote consulting.
These 8 tips prepare you for the most common obstacles and help you to perfectly configure your ERP system already before the internationalization venture. Do you want to learn more about potential pitfalls? Download our white paper on accounting abroad now!