Companies that grow internationally and through subsidiaries must have an ERP system to support and expand on these shifting business models. This involves figuring out which method is best for your business as it develops and expands. This may indicate development into a scattered organization or a fully integrated international business.
This essay will examine some of the crucial factors influencing this choice.
Defining Global ERP System
With the help of global ERP solutions, a multinational organization can be automated, streamlined, and made to work better. They put data and information from different departments in many countries and companies into networked applications for a centralized view.
ERP solutions give you a single, real-time view of all aspects of your business operations, even if you do business in more than one country. Automation is important because it lets you turn manual tasks into automated workflows within the ERP. This dramatically increases productivity and accuracy while reducing paperwork and employee turnover.
To determine if a global ERP could be appropriate for you, consider the following inquiries:
- Does your company have a global presence? Or, will it?
- Does your company deal with many currencies?
- Do you have to pay taxes in many nations?
- Are you utilizing data centers all around the world?
- Have you recently purchased a new business or intend to expand your market?
If you answered “yes” to these questions, a global ERP system could be a good way to automate and streamline your company’s operations and departments.
Does the ERP system support several currencies, tax laws, and legal systems?
When choosing global ERP solutions, it is critical to consider a system’s compatibility with different currencies, tax laws, and legal frameworks. Businesses that operate internationally, for instance, must keep an eye on exchange rates.
Also, various laws in various nations govern taxes like GST and VAT. Also, the standards for financial reporting will always differ between nations. Changes in local legalization can have a significant impact on enterprises operating internationally.
Your company’s top global ERP system will have a proven track record of success in the regions your company wants to operate. Updates should be quickly delivered anytime some changes need to be considered, and it should accept geographical differences and automatically address them in a single instance.
What standards do you have for the consolidation of global finances?
Consolidated financial information is essential since financial managers give shareholders and regulators a thorough corporate perspective. You will require various report sets if you have many locations, and all of this information must be combined into a single financial statement. By using a robust global ERP system with top-notch automated tools for consolidation, you can eliminate the problem of inaccuracies snaking in as reports are transferred between different hands.
Executives must consider how the business model will be supported by the system to make the best use of global ERP for unifying finances. A fully integrated solution, for example, in which all subsidiaries and locations use the same ERP system instance, maybe the best option. A regional model, on the other hand, would be more appropriate, in which several regional businesses use diverse systems and provide consolidated financials for head office reconciliation. These two models could be combined if desired.
The problem with the second alternative is that it raises the possibility of a “mushrooming” effect, which would reduce productivity, take more time, and increase the likelihood of reconciling errors. These mistakes are common when transferring data manually between different local systems.
Ultimately, a global ERP solution must have the flexibility your company needs to support how it wants to grow. This is true whether you are going global, starting new subsidiaries, growing your product line, or opening new channels.
Will the ERP be able to deliver the required customization?
It is always necessary to customize a global ERP system to meet the needs of a particular organization. It must be optimized for factors like your goals and geographic areas. While some local business operations must continue, all local employees must have access to data and dashboards in their native language and currency.
In this case, the ERP will eliminate the costs and delays from needing IT support from headquarters to make changes at a subsidiary. At some point, an international roll-up and consolidation must be seamless.
All stakeholders must take into account all pertinent information consistently. The same basic database should be used for all consolidation and calculations. Suppliers of sound global ERP systems will be able to show case studies of successful implementations that show how different languages, currencies, and customized business flows can be used without compromising the ability to follow international reporting standards.
What degree of visibility will the system offer?
Moving to a global ERP system is often done because of the need for effective financial consolidation and cross-border tax and accounting compliance. Beyond simple money management, there are, however, many more advantages.
A global business management system can standardize and streamline many processes, such as inventory control, supply chain management, billing, and customer relationship management (CRM). You have better control over business operations and top-down visibility with more standardized processes.
Your organization can standardize important procedures when necessary while allowing for decentralization and flexibility with the most suitable system.
Can the ERP system be scaled?
Scalability refers to the ERP system’s ability to accommodate and support expanding businesses. With a centralized system set up and optimized for new business interests, it is faster and easier to set up business operations wherever needed. ERP software shouldn’t impede a company’s expansion, as it is designed to do.
If necessary, can the ERP system coexist with an on-premise ERP system?
Numerous companies make significant investments in regional, on-premise ERP systems. If you’ve done this, you’ll want the new ERP system you put in place for your global expansion to work with the one you already have. You can only migrate completely to a new system once because that system will contain a lot of historical data.
With a two-tier implementation, affected businesses can keep using their current systems while implementing the more flexible, cloud-based multinational ERP. This will allow adding more divisions and subsidiaries without changing how the business works now. The ideal solution, however, will guarantee flawless synchronization between those two ERP systems.
Final Thought
Taking Your Business to the next step can only become a reality if you have the expertise to deliver outstanding solutions. At Seibert Consulting Group, we provide modern solutions to businesses that fully utilize the NetSuite ERP, SuiteCommerce, Shopify, and BigCommerce eCommerce platforms. We always customize our solutions to meet Your Business’ requirements and goals. Let’s start talking about your project and find out how we can help Your Business grow. Contact us via our chatbot or email at hello@seibertconsulting.com and via our direct line at 760-205-5440.
