Taking your organization across borders
From handling multiple languages and currencies to ensuring compliance with local tax laws and regulations, global ERP implementation projects can certainly be daunting. So how do you take the complexity out of the localization process and make the right choices for your organization? Below we look at some of the topics that you need to consider and how a solid ERP solution can help your organization scale internationally.
Localization isn’t limited to local languages and currencies. Areas such as regulatory requirements must also be considered and these vary depending on the country. For example, within Europe alone, taxes, VAT, and regulations can be completely different from one country to another. And there’s other practical things to consider. For instance, what are the options for local internet access and can it support your new solution?
But before you even start to consider these local factors, it’s vital that your data is standardized and aligned with your business language and currency.
Working from a common data source is an important part of an effective international ERP implementation. It enables organizations to consolidate financial data as well as share data about customers, vendors, items, prices, and more. Achieving common data depends on how the organization operates. For instance, do each of your subsidiaries sell different products in different markets? Or do the different countries and sites operate in the same markets with the same set of products? Depending on your setup, ERP solutions can offer great opportunities. For instance, with common markets and products, it’s possible to implement common customer and supplier numbers allowing for enhanced credit control. Or you can move around surplus materials and quickly respond to emergency shortages. Plus, it’s easy to consolidate purchases and place orders through a subsidiary located close to the supplier for additional cost savings.
You might decide to use one common language across borders and streamline your processes across your subsidiaries. But then how do you handle local languages for local resources? An intelligent ERP solution lets you set up local language requirements – so your New York office sees the system in English while your Paris office sees it in French. This way everyone works with the same system and the same data, but in the local language and in compliance with local regulatory requirements. English is often the common business language for global organizations, but it’s important you confirm that the people handling daily operations are comfortable working in English. And remember language isn’t just about spoken word. If you want to expand into new countries and regions, all materials including GUI screens, notifications, training materials, and manuals must be translated into local languages.
ERP solutions can translate currencies across borders allowing users to see financial data in their local currencies and ensuring efficient management of global transactions. For example, financial data from the Paris office can be displayed in US dollars when viewed by employees at the New York office. This makes it much easier to manage the financials across borders. All-in-one solutions like Microsoft Dynamics 365 also allow you to add new currencies alongside the base currency. And if the currency you need is not available, it’s possible to define custom currencies based on user-defined exchange rates.
International organizations have various locations across the world and customers located in different time zones. Working in multiple time zones can be challenging, especially when scheduling activities. Time zone functionality in Dynamics 365 lets you create and synchronize activities and align them with the time zones set up in Microsoft Outlook. For example, if your New York offer schedules an activity with attendees located in Paris and Sydney, all participants will see their activities displayed in the time zone in which they are located.
Regulations and global compliance
International organizations are constantly challenged by the need to meet local regulations in the countries they operate. That’s because regulatory requirements are often changing and can vary from country to country. Some ERP solutions don’t guarantee legislative compliance when it comes to issues like Brexit and GDPR. However, other solutions, such as Dynamics 365, are GDPR compliant and support major global, governmental, regional, and industry regulations. This makes it easy for organizations to comply with existing standards and respond to new standards and regulations as they arise.
Over 170 countries impose a Value-Added Tax (VAT) in each production stage of a good or service. And as usual, this consumption tax varies from country to country. Even rates within EU member states aren’t uniform. For example, the highest standard VAT rates are in Hungary (27%), and Croatia, Denmark, and Sweden (25%), while the lowest rates are in Luxembourg (17%), Malta (18%), and Cyprus, Germany, and Romania (19%). There can also be exemptions to these if a country levies reduced rates for certain goods and services such as tourism to help promote local services. Thankfully, there are solutions that take the heavy work out of managing all this. For instance, with Dynamics 365 users can set up different VAT rates tailored to specific needs. Rates are based on local requirements, and it’s possible to set up customized VAT rates if a customer is exempt.
Today’s cloud-based ERP solutions require fast internet access and sufficient bandwidth so that all the users can connect and effectively perform their tasks. This means these solutions are only as effective as the local infrastructure allows. That’s why it’s important to validate your legacy infrastructure before proceeding with any implementation. In some regions speedy internet simply isn’t available, so you might want to contract a second internet provider as a backup. Organizations also need to consider how to handle support for the new ERP solution- will there be centralized or local ERP support and help desk functions? Again, language can be an issue here- if there’s no local support available, users can only access support in a foreign language or from a different time zone.
Implementing an ERP solution will fundamentally change the way people work and that’s why it’s important to get strong buy-in from the entire organization- not just top management. All future users should be involved in the implementation process and provide their input and guidance along the way. This helps ensure everyone understands the benefits of the new system and accepts the project objectives. It’s crucial that the implementation process recognizes and respects the company culture, and the different local cultures throughout the global organization.
Think Global – Act Local
Localizing your ERP solution to meet regulatory requirements, language requirements, and local best practices is vital for successful international deployment. And thanks to out-of-the-box localized software, you can have peace of mind knowing you’re always in compliance with local legislation. Dynamics 365 offers a full suite of business applications and localized ERP packages so customers can select the localization for their country and enable market-specific business processes. The latest release of Microsoft Dynamics 365 (2022 release wave 1) is available in more than 70 countries and regions worldwide.
To secure successful implementation, organizations should partner with local experts who have a solid grasp of the local regulations, language, and culture. Here at Pipol we aim to take the complexity out of the localizations process and help you make the right choices for your organization. With offices in more than 85 countries and a committed alliance of more than 80 leading local Microsoft Dynamics partners around the world, we have the competencies and global presence required to support you wherever you’re located.
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FIVE STEPS GUIDE TO INTERNATIONAL ERP
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