16 Jun How to prepare ERP system in a global company
Global implementations of Microsoft Dynamics NAV (Navision) are based on two assumptions:
- Preparation of the solution that will be used in all subsidiaries,
- Implementation of the solution (global roll-out) including its adjustment to the local requirements.
The idea of one common ERP system is very simple – prepare one ERP solution for all subsidiaries (Global Template) and implement it in all locations while adding local functionalities (Global Roll-out). However, practical implementation of this simple concept requires a lot of time and effort from both the ERP partner and the client.
Global project methodology
What IT.integro offers its global customers is the knowledge of how to successfully carry out the project as well as a set of products that were developed during similar past projects. These products and expertise are part of our methodology that we adopt while running projects of this type: NGSRM (NAV Global Standardization and Roll-out Methodology).
The global project methodology consists of five distinct stages. Each phase has its own defined deliverables. Our experience shows that about 40-60% or business processes (defined in the first project stage – Strategy) are pretty much the same in various global companies. Thus, standard products prepared by IT.integro such as job role instructions or system permissions templates can be used by various companies without major modifications.
However, when it comes to this specific group of customers, the most important element of NGSRM is the knowledge and experience of IT.integro consultants, in other words practices that will ensure the success of the project. Challenges related to global ERP projects are not the same as in standard ERP implementations. In was the first global ERP project for AVK Group that was particularly demanding as we had a lot to learn as Microsoft Dynamics NAV partner (Henrik Buss,IT Manager in AVK at that time talks about it in his post). Our wide experience gives us the ability to predict problems of this kind and solve them effectively. A few examples are shown below:
- expectations of subsidiaries’ employees – one of the main advantages of usingGlobal Template is the fact that after global rollout of a group solution all subsidiaries start to work in a similar manner. They all have standardized processes and posting setups as well as unified and consistent data within the entire organization. All users participated in similar trainings. However, employees in subsidiaries are often used to existing processes and they may try to persuade the implementation partner to make excessive modifications in the global solution to meet their requirements. The more local modifications to make, the more vague the idea of one common solution. Issues related to local legal requirements are even more difficult to resolve. It often turns out that the actual number of local adjustments required by local regulations is smaller than the employees expected. There is a risk that with insufficient knowledge of these local requirements the partner will introduce too many modifications. As a result, the consistency of the global solution will be reduced.
- excessive centralization – however, there can be also opposite trends. Sometimes, the headquarters define global assumptions that are impossible to implement in subsidiaries (e.g. chart of accounts). It is recommended that all subsidiaries share as many accounts as possible.The numbers of bank accounts that are created to meet the local requirements must be within the ranges defined for group chart of accounts. There were cases when the headquarters defined 4 bank account numbers but the company subsidiary had over 100 of them.
Global implementations of Microsoft Dynamics NAV
These are just some of the problems that we faced during multiple implementation projects carried out in multi-branch companies. With IT.integro’s knowledge and experience in global projects, these problems can be avoided.