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ERP Implementations For Australian Subsidiaries Of Multi-National Companies

ERP Implementation for Australian subsidiaries of multinational companies- How to choose an ERP and make the implementation work from start to finish

We often have requests from multi-national companies inbound into Australia that want to implement an Enterprise Resource Planning (ERP) solution as part of a global rollout.

The common challenge is that Australian subsidiaries often find themselves caught between two worlds:

Does this sound familiar?

In this post, we are going to address some of the key challenges that Australian subsidiaries of multi-national companies face when implementing ERP software.

 

ERP options available for subsidiaries of inbound multi-national companies

Let’s provide background information and then look at the options available for multi-nationals.

First of all, being a multi-national does not necessarily mean that the local, Australian office is a substantial organization. Sometimes the local, Australian office, is in start-up mode or is a relatively small subsidiary of a global company.

Either way, the global head office will usually want to standardize on IT systems, including ERP.

The challenge is that the two organizations can have very different requirements.

For example, the global head office might be interested in:

 

Meanwhile, the local (Australian) subsidiary might benefit from:

The question is – how to ensure that all parties get what they want?

Enterprise Resource Planning rollout for multi-nationals: What’s The Best Strategy?

ERP solutions differ with regards to the multi-national rollout strategy.

Some solution providers have a “multi-tier” offering – a mid-market or enterprise solution at the head office and an SME solution for smaller subsidiaries.

Examples of this include SAP. SAP S4 HANA might be used at head office as an enterprise solution, but smaller local subsidiaries might use SAP Business One.

Other ERP providers might only provide a single solution strategy – the same ERP solution at head office and subsidiary.

The choice of localized solution for your subsidiary offices will depend on the size of your subsidiary offices, the complexity of requirements and global rollout strategy.

Assuming the ERP product selection part of the equation has been answered by head office – let’s focus our attention on the methodology and structure for the local Australian subsidiary.

 

Winning methodologies for implementing an ERP software solution for a local subsidiary of a multi-national company

There are different methodologies for implementing Enterprise Resource Planning Software for subsidiary offices of multi-national companies:

Local office runs the entire ERP implementation

Using this ERP methodology, the local subsidiary runs the entire process with little input from the head office.

Head office might provide basic input and learnings from other global implementations but the local office sources a local implementation partner and gets the job done locally.

 

Advantages

 

Disadvantages

Head office runs the entire ERP implementation

In this scenario, a global partner or an internal competency centre runs the entire implementation. There is little or no involvement from local vendors or implementation partners.

 

Advantages

 

Disadvantages

The local team of the subsidiary may feel as though they have not been involved in the implementation process – this can lead to a lack of buy-in for the rollout of the new system.

 

Hybrid ERP implementation model

This implementation methodology uses elements from both implementation structures referred to above.

What we want to achieve is a mixed model implementation where we consider the advantages and disadvantages referred to above and we look to utilize the corporate structures and experience whilst providing a level of autonomy and “localization” for the Australian subsidiary.

Using this implementation model the corporate head office looks after the core elements of system design, broad system scope, reporting, data conversion templates and core elements of system configuration.

The local, subsidiary works with a local partner to work through their specific requirements. Examples of local requirements include user support and training, legal and fiscal requirements, specific local reporting requirements and any configurations required for the subsidiary office.

Using this hybrid model, communication between the local implementation partner and the overseas head office is important as the two organizations will take a collective responsibility for the successful delivery of the ERP system.

 

Conclusion

Rolling out an ERP software solution can create efficiency gains and opportunities for further growth. However, when it comes to choosing and implementing the system, finding common ground between head office and local subsidiaries can seem challenging.

In summary, there are no right or wrong answers to the question of Enterprise Resource Planning implementations for small to medium sized subsidiary offices as there are different solutions and methodologies to choose from.

Choose the model that best fits your organization’s requirements, structure and culture to guarantee success.

Are you a multi-national or local Australian subsidiary looking to implement a new ERP system? Let us know your questions, challenges and goals by leaving a comment below!

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