FACING AN ERP IMPLEMENTATION IN LATIN AMERICA? HERE ARE THE TOP 5 QUESTIONS A COMPANIES ASK.
Yes, you’re right. It’s said Latin American projects are difficult to handle, understand, explain, control. Why is that and how could we avoid risks?
Let’s have a look at some key points:
1) Can I plan to carry out the project in all countries at the same time? Is a Big-Bang a good option?
There are 20 countries in the region. Most of them speak Spanish, others Portuguese and even English and French! and they all have different governments and laws. So even if it is the same region, we have to expect totally different implementation requirements from country to country. I am not saying you cannot do a Big Bang, but you will need different teams working in parallel, as realities in each country vary considerably. I personally prefer to do one country at the time.
2) Why is it said Latin America is so challenging?
The language barrier, different and varied taxes and legal requirements, are definitely the typical challenges, but there are also many others we will face that will impact on our plan:
o Fiscal integrations needed: electronic invoice is mandatory in almost all the region but different in each country.
o Frequent law changes
o Not enough information is available
o Not easy to get information to plan well
o Informality in business processes
o Planning the post-go live support strategy
o Different timing, cultural and communication styles
o Important local budget restrictions
o User resistance
For all of the above, making a good plan is key to being successful in Latin America.
3) Which ERP is the best in terms of localization?
ERP software companies have different localization strategies. Not only is it important to compare current localization capabilities but also to clearly understand the localization roadmap, meaning what the vendor intends to maintain in the future.
o Oracle JD Edwards: Their localization strategy has changed along the years. The software meets complete legal requirements in some countries, while not so many in others. There are Oracle validated partner solutions for specific locations. Nowadays, Oracle JD Edwards reviews new laws one by one and determines if they will develop an update or not.
o Oracle ERP Cloud: this Oracle ERP is where Oracle has its eyes on, and as it was born in the cloud, clients cannot customize it. Having said that, its localization capabilities are way more comprehensive than any other Oracle ERP, and they are maintained by Oracle. Definitely... the best option in terms of localization.
o PeopleSoft: localization packages for Latin America are poor and behind the other ERPs. PSFT’s strength is HR and Payroll packages for each country.
o Microsoft Dynamics: localization is developed and supported by MS partners in the different countries, not by Microsoft. So the quality and coverage of localization depend on those partners.
4) Why do we hear projects in Latin America usually fail?
Simply put…my top #1 reason is “lack of information” … Plans are undervalued because risks are not known, and the person that makes the plan does not have the right and necessary information to do a good job. Avoiding this obstacle is certainly possible. Most ERP implementation plans for Latin America are made without considering local needs and challenges, but if the plan is well done, failure is not an option.
5) “Our company uses Oracle EBS, PSFT or JDE in North America or Europe. We never implemented them in Latin America because it was very costly for such small branches. Is Oracle ERP Cloud a cheaper option?”
Definitely! Implementing Oracle Financials Cloud in small locations is an approach many companies are taking and analyzing. It is worth doing the exercise and comparing costs: on-prem versus ERP Cloud. Some of our customers have already chosen this strategy. Our case studies clearly describe how some of our customers have already chosen this strategy.
Latin America is challenging, but certainly doable. No matter what, planning well is the cornerstone of success!
Cecilia Suarez,
CANNY Managing Partner