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Overcoming the Global ERP Challenge
Different solutions bring about different implementation strategies
Just because enterprise resource planning (ERP) solutions have gone international doesn't necessarily mean they have gone global.
While international companies have worked with domestic ERP solutions to fulfill their human resource needs, few ERP solutions actually support a total global solution. Rather, most offer separate international and U.S. solutions, some of which are pieced together using integration points. And although each ERP solution boasts a distinct implementation strategy, all share a common imperative: test, test, and test some more.
Jeffrey M. Hill, MBA, CPP, PMP details the challenges of global ERP in "Integrating Global Payroll Solutions With ERP" in the June 2008 issue of PAYTECH.
"There are four principal approaches to the global challenge through traditional ERP solutions,"Hill writes. Those four approaches, according to Hill, are:
- Traditional ERP Solution
- Hybrid Global and Service Bureau Solution
- Global ASP/Service Bureau Provider Solution
- Third-Party Agent Solution
The traditional ERP solution, Hill contends, typically works only in highly developed nations with sound tax and payment structures. A hybrid approach -- where a traditional ERP solution teams up with a local ASP or service bureau -- allows companies to use their legacy ERP systems to deliver payroll to employees in supported countries and uses a local ASP or service bureau for countries not supported by the system.
The global ASP/service bureau solution is employed by a large number of companies and offers local expertise in difficult jurisdictions. But it features the most integration points and multiple interfaces. Finally, the third-party agent solution acts as "a middle agent between the company and various in-country payroll providers."
"Employers benefit from (the third-party agent) arrangement because they are dealing with a single source with minimal integration points,"says Hill, who describes the third-party agent solution as an emerging trend. "The challenge then falls on the agent to negotiate with various payroll providers to offer the global solution."
Regardless of which ERP solution a company chooses, Hill recommends adhering to the following steps:
- Define a system of record and keep it up to date.
- Perform the "three Ts"of integration--test, test, and test.
- Hold your providers accountable.
"Going global is a challenge, but today there are many paths to success,"Hill concludes. "Companies that understand their options and work closely with vendors to implement and maintain solutions will succeed."
Read "Integrating Global Payroll Solutions With ERP" in the June 2008 issue of PAYTECH.
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