Businesses that have grown outside of their country limits, face the situation of managing and controlling operations with different legal, taxation and accounting standards. In order to address this, they have relied on a local system, but while this solves the local problems, it doesn’t do much to follow your corporate standards and processes, presenting in the long run, a series of challenges that can arise from running a separate ERP system for each subsidiary.
Although implementing a global ERP system is a daunting task, the business benefits of the transition outweigh the implementation challenges. In this blog, we go over 3 critical questions that will help you find out if it’s time for your company to consolidate your global operations under your corporate ERP system.
HOW MUCH VISIBILITY DO YOU HAVE OF YOUR SUBSIDIARIES’ OPERATIONS?
According to TEC, analyzing your company’s data is extremely valuable, as it gives you unique insights you won’t get anywhere else, such as your busiest and slowest sales periods, for example. This, of course, grows exponentially in importance when you have operations overseas.
Managers at corporate headquarters need consolidated operational and financial information to provide a complete business overview for strategic decision making. Multiple local systems will produce multiple sets of information that need to be consolidated.
While manually consolidating data from two or three local systems to create a single overview of the business is not an unattainable task, it becomes increasingly complex, time-consuming and expensive to do so if the number of such “local” tools proliferates.
ARE YOU STRUGGLING WITH MULTIPLE TAXATION AND LEGAL REQUIREMENTS?
An organization that operates internationally requires a system that can handle multiple currencies, taxes and legal requirements. Local compliance and statutory requirements can vary substantially from country to country. And changes to local legislation, which are common and frequent, can have a negative impact on your international operations.
Rolling out your ERP system would allow local differences to be addressed automatically in a single instance and any updates required due to changing requirements and legislation, to be rapidly deployed.
IS YOUR CURRENT SYSTEM FOOTPRINT SCALABLE?
Scalability is all about how your system allows and provides support to your business’ growth. A decentralized system, with multiple customizations for each subsidiary, can slow down or even halt your growth.
The answers to these questions will reveal multiple areas of opportunity for your company. As we mentioned before there’s a series of issues when running a separate ERP System in your subsidiaries. Rolling out your corporate ERP system, will help you consolidate financial and operational data, simplify and standardize business process and practices, and overall save time and resources.