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Choosing the Right ERP Solution to Support a Global Business – Part Two

  • 15 May 2013
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Many organizations are becoming increasingly global. To support these efforts, they have established multiple sites or locations—manufacturing plants, branch and regional sales offices, distribution warehouses and national, regional, and even global headquarters—that may be distributed within a country, a region, or around the world.

 

As organizations expand into new territories, they face a number of operational challenges. They need to adapt to the business rules of foreign countries, including government regulations, reporting requirements and variations in tax and labor laws. They must accommodate multiple languages, multiple currencies and varying local best practices. And because companies operating in multiple countries are required by law to create separate legal entities, inventory transactions become more complex with intercompany movements being treated as purchases and sales between legal entities.

 

Cre8tive Technology & Design (www.ctnd.com) will be posting a three-part series on “Choosing the Right ERP Solution to Support a Global Business”

 

Part One                      Each Business Unit Chooses its Own Solution

Part Two           Consolidating the Entire Business on a Single ERP Solution

Part Three         Using a Combined Solution

Four 3d puppets, making the round diagram. Object over white Four 3d puppets, making the round diagram. Object over white
Part Two – Consolidating the Entire Business on a Single ERP Solution

 

Organizations now recognize that internal operations must be integrated on a global scale to achieve global visibility and transactional interoperability, as well as ensure governance, risk management and compliance.  As a result, there is a growing trend among mid-sized to large organizations to consolidate applications, with many organizations attempting to deploy a single ERP worldwide. This strategy promises to provide a single repository for accounting, order processing, manufacturing, human resources and data from other functions as well as including advanced financial management reporting and analysis.  According to Gartner, roughly 70 percent of companies with multiple ERPs stated a desire to operate a single global ERP system.

 

The primary advantage of consolidating on a single ERP solution is that it integrates resources and eliminates redundancy.  A single database for all accounting, manufacturing and supply chain functions provides consolidated information from the head office down to the most remote subsidiary.  This enables managers and executives to drill down from the consolidated profit and loss statement to the underlying transactions at the point of entry, anywhere in the world.

 

In addition, when rolling out an ERP to several sites, costs can mount.  By reusing the same skill set, process models, methodologies, and deployment strategies at multiple sites, organizations can keep deployment costs under control.  At the same time, globalization requires standardized business processes whenever possible.  It’s simpler to harmonize and standardize business processes on a smaller number of production systems.

 

Cost and complexity issues dominate the reasons that organizations abandon a single ERP strategy.  If subsidiaries are located in the same region or country, the problems are not so great.  If the solution can be standardized in all operations with the same financial reporting structure, it can be installed quickly and cheaply.  But when a single ERP solution is deployed in different countries with different currency, fiscal, or legal requirements, many organizations find that the cost of configuration and ongoing support are out of proportion to the benefits gained.

 

In addition, not all ERP solutions are ideally suited to handling the less complicated needs of a branch or sales office in a remote country because of their complexity and these projects can take many years to roll out.  Thus, despite the best of intentions, many organizations have a difficult time deploying a single ERP throughout their organization.

 

Historically, there have only been one or two options for a global ERP solution—typically referred to as “Tier-1” solutions.  The set of choices has expanded to include additional “Tier-2” vendors which have the solution and infrastructure to effectively support a global ERP initiative in a cost effective manner.  Today, however, Tier-2 solutions such as Epicor offer all the capabilities that an organization would expect from a Tier-1 system.  These include end-to-end ERP capabilities, embedded workflows, as well as robust reporting and performance management capabilities.  In addition, Tier-2 solutions continue to provide their long-held advantages of a lower total cost of ownership, greater flexibility, and the ability to be implemented more quickly than their Tier-1 counterparts.  Tier-2 packages also offer ease of use, strong functionality, and a rich, repeatable footprint based on established business processes.  If overall cost and manageability are important, organizations should consider a Tier-2 option for their global operations.  Not only does the organization benefit from the global functionality it needs at a lower cost, it can also benefit from the unification that comes from a single solution strategy, and avoids the extra integration and vendor relationship required in a Tier-1/Tier-2 approach.

From an Epicor White Paper

About Epicor

Epicor Software Corporation is a global leader delivering business software solutions to the manufacturing, distribution, retail, and service industries. With more than 40 years of experience, Epicor has more than 20,000 customers in over 150 countries. Epicor solutions enable companies to drive increased efficiency and improve profitability. With a history of innovation, industry expertise, and passion for excellence, Epicor inspires customers to build lasting competitive advantage. Epicor provides the single point of accountability that local, regional, and global businesses demand. For more information, visit www.epicor.com.

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Many organizations are becoming increasingly global. To support these efforts, they have established multiple sites or locations—manufacturing plants, branch and regional sales offices, distribution warehouses and national, regional, and even global headquarters—that may be distributed within a country, a region, or around the world.

 

As organizations expand into new territories, they face a number of operational challenges. They need to adapt to the business rules of foreign countries, including government regulations, reporting requirements and variations in tax and labor laws. They must accommodate multiple languages, multiple currencies and varying local best practices. And because companies operating in multiple countries are required by law to create separate legal entities, inventory transactions become more complex with intercompany movements being treated as purchases and sales between legal entities.

 

Cre8tive Technology & Design (old.ctnd.com) will be posting a three-part series on “Choosing the Right ERP Solution to Support a Global Business”

 

Part One                      Each Business Unit Chooses its Own Solution

Part Two           Consolidating the Entire Business on a Single ERP Solution

Part Three         Using a Combined Solution

Consolidations

Part Two – Consolidating the Entire Business on a Single ERP Solution

 

Organizations now recognize that internal operations must be integrated on a global scale to achieve global visibility and transactional interoperability, as well as ensure governance, risk management and compliance.  As a result, there is a growing trend among mid-sized to large organizations to consolidate applications, with many organizations attempting to deploy a single ERP worldwide. This strategy promises to provide a single repository for accounting, order processing, manufacturing, human resources and data from other functions as well as including advanced financial management reporting and analysis.  According to Gartner, roughly 70 percent of companies with multiple ERPs stated a desire to operate a single global ERP system.

 

The primary advantage of consolidating on a single ERP solution is that it integrates resources and eliminates redundancy.  A single database for all accounting, manufacturing and supply chain functions provides consolidated information from the head office down to the most remote subsidiary.  This enables managers and executives to drill down from the consolidated profit and loss statement to the underlying transactions at the point of entry, anywhere in the world.

 

In addition, when rolling out an ERP to several sites, costs can mount.  By reusing the same skill set, process models, methodologies, and deployment strategies at multiple sites, organizations can keep deployment costs under control.  At the same time, globalization requires standardized business processes whenever possible.  It’s simpler to harmonize and standardize business processes on a smaller number of production systems.

 

Cost and complexity issues dominate the reasons that organizations abandon a single ERP strategy.  If subsidiaries are located in the same region or country, the problems are not so great.  If the solution can be standardized in all operations with the same financial reporting structure, it can be installed quickly and cheaply.  But when a single ERP solution is deployed in different countries with different currency, fiscal, or legal requirements, many organizations find that the cost of configuration and ongoing support are out of proportion to the benefits gained.

 

In addition, not all ERP solutions are ideally suited to handling the less complicated needs of a branch or sales office in a remote country because of their complexity and these projects can take many years to roll out.  Thus, despite the best of intentions, many organizations have a difficult time deploying a single ERP throughout their organization.

 

Historically, there have only been one or two options for a global ERP solution—typically referred to as “Tier-1” solutions.  The set of choices has expanded to include additional “Tier-2” vendors which have the solution and infrastructure to effectively support a global ERP initiative in a cost effective manner.  Today, however, Tier-2 solutions such as Epicor offer all the capabilities that an organization would expect from a Tier-1 system.  These include end-to-end ERP capabilities, embedded workflows, as well as robust reporting and performance management capabilities.  In addition, Tier-2 solutions continue to provide their long-held advantages of a lower total cost of ownership, greater flexibility, and the ability to be implemented more quickly than their Tier-1 counterparts.  Tier-2 packages also offer ease of use, strong functionality, and a rich, repeatable footprint based on established business processes.  If overall cost and manageability are important, organizations should consider a Tier-2 option for their global operations.  Not only does the organization benefit from the global functionality it needs at a lower cost, it can also benefit from the unification that comes from a single solution strategy, and avoids the extra integration and vendor relationship required in a Tier-1/Tier-2 approach.

From an Epicor White Paper

About Epicor

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