ERP GLOBAL: Globalizing ERP on a Global Single Instance

The ideal dream for any company is to have one global ERP system expanding to include CRM and the Supply Chain Controlling functions of the organization. Such a system should be capable of making the entire data of the company available on one system for the front end and using one single data source for the back across the entire organization. How effective are ERP’s when they are managed by using a single global ERP Instance is a question which needs lot of deliberation before this can be answered.

Most of the global companies that operate across geographical boundaries are constrained to use multiple systems integrating to multiple ERP systems and those ERP systems integrating to multiple systems in turn to provide the consolidations, statutory reporting and segment and management reporting. They are generally supplemented by additional Business Intelligence Systems to support information needs to the companies. Replace them with one ERP system, with one data store that serves the entire company, no matter how diversified or geographically spread out the business operations are is still a dream for majority of the big players.

The biggest challenge that companies face while thinking of adapting to single instance view is the fear of dependency on a Single Vendor for Financials, Purchasing, Projects and CRM, irrespective of the fact that they are provided and supported by SAP or Oracle or whomever. The thought of reliance on one giant database, one application to handle enormous business transactions that happen every day that does everything is frightening in itself.

Benefits of a Global ERP - Single Instance Approach:

1. Compliance: Sarbanes-Oxley Act requires that financial reports have a verifiable audit trail. Single Instance makes data more audits friendly and linked to the origin of the transactions eliminating reconciliation efforts.
2. Financials Availability: Todays stock markets demand that audited financial figures are available as early as possible after the close of the period. Global ERP Eliminates consolidation errors and greatly reduces the time it takes to close the books, making results available to stakeholders in the minimum possible time.
3. Efficiency: Having a single data source could also create new revenue opportunities and cut costs. Companies would be able to run reports that provide integrated information, ratios, analytic capabilities and detailed information. Drilldown capability greatly enhances decision making process and promotes leveragability of resources across departments.
4. Implementation Costs: Costs to implement and support the single-instance setup is comparatively much lower than the traditional multiple instances.

Challenges to achieve Single Instance Global ERP:

1. Databases: Databases large enough to serve entire enterprises which are proven to be stable and capable of supporting huge transactional volumes are difficult to find at reasonable prices.
2. Connectivity: Connecting to a single database from multi-national multi-cities locations is difficult if not impossible. In spite of technological advancement bandwidth availability is still an issue, at least in developing countries.
3. Database Consolidation: The various databases which are spread across various locations and being used by various systems to generate reports or perform various transactions need to be consolidated and moved to a single data center. This eventually might result in reducing the overall administration costs but achieving such consolidation comes as a major challenge for the organizations to achieve.
4. Process Standardization: When we talk about single instance we need to have common business processes as well, which demands a lot of process reengineering for the organization. A global organization having a landscape of regional ERP’s finds it difficult to start such a big exercise to integrate the local processes with the global processes. Benefits for such standardization includes comparability, operational cost reduction, reconciliation, and a single global ERP proving a consolidated single internal view' of the organization.
5. Shared Support / Service Center: Single Instance strategy also demands supporting multiple country users spread across the globe form the common shared service center. Main benefit are cost reduction and major challenges are supportability and setup.
6. Local V/s Global: How to solution the local requirements using the global design for business process is the major challenge faced by the single instance setups. Some countries demand statutory systems in a particular format and even privileged ERP systems like Oracle and SAP sometimes fail to provide solutions for such local demands out of the box.
7. Migration from Legacy to Global ERP: How to structure the migration, phasing out the legacy systems ensuring business operations continuity and availability of historical data in the new systems is one of the major challenges faced by big organizations today.
8. Performance Issues: Ensuring optimum performance levels in the live system across all locations to support business operations is one of the major hurdles in the way to Global ERP approach.

But a single instance is now more realistic than it was in the past and if planned appropriately it can bring in huge benefits to the implementing organization.

Financial Reporting, Cost Control, Competitive Advantage, Consistent Data and Information, Business Intelligence, Decision Making, Same Terminology, Shareholder Trust, Global Operations, Improved Production Lead Times are some of the significant improvement areas to look for in the global ERP world.

Freelance Assignments for ERP Professionals:

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