LESSONS LEARNED IN LATIN AMERICA ERP PROJECTS.
After many years working with companies implementing world-class ERPs, here is my advice for Finance or IT leaders having the responsibility for carrying out roll-out projects in Latin America:
1) It is better to spend time planning than failing later.
This is the most common mistake when facing implementations in Latin America: making very high-level plans instead of spending some time to better understanding the challenges of the region.
I will share a story with you that personally helped me a lot all these years when planning ERP projects. Back in 2003, I met a great Applications Director at a JD Edwards customer. It was a global company, with 27 JDE sites around the globe in a single instance. She had already led this customer’s roll-out projects in all Europe, and now she had to do Latin America. This woman followed a practice before budgeting any of her projects, that is “a best practice” to me. Every time she was told to roll-out with the ERP to some country, she traveled to that location for one week, and had meetings with all the management. Her aim was to understand the business there, and to identify the main “elephants” she had to consider when budgeting the specific ERP implementation. She asked me to go with her, and by the end of the week, we had made a good list of requirements to consider in the planning. After that week we spent many days going deeper into the different topics, of course, but the point is that in just one week onsite, she could see and feel certain matters which could seriously affect the project plan because they are many times detected too late. Some examples are if employees had significant workloads that could stop them from participating in the project properly, how interested and committed the local management was to the implementation, which employees spoke English well, what main legal requirements were, and so on.
Our project plans after doing that “budget gathering week” were perfect! She never delayed a go-live, and the 5-day-trip enabled her to quickly adjust some basic concepts needed for a successful project. If she saw the location was resistant to change, she asked for management support at HQ from the very beginning. If local people had heavy workloads, she requested more resources before starting. If there were many legal requirements that JD Edwards did not comply with, she considered a customization in the budget.
Bottom line, it is worth spending time gathering information for planning purposes. The input can be your own company, a good vendor with knowledge about the country, and maybe both. I always encourage my customers to do this exercise, to quickly get involved with their own branch, and to understand the context first, so as not to have last-minute surprises once the project has started.
2) Align difficulties with sponsors since day one.
One of the advantages of making a good plan and being informed is that you get to know what the main challenges are, and you can inform them to project sponsors, so all the organization is aligned with the risks. Making those issues transparent and clear to all management gives you the opportunity to draw a line between your responsibility and the rest of the management‘s. The leader of this implementation will face important challenges that may not exist in other countries, and this fact is many times overlooked.
Communicating well what a project in Latin America means since day one will be translated later in formal support from your boss when going through critical paths. Nobody likes surprises, so if there was early warning, it is pretty possible you will get the resources or tools to handle and solve that situation. Let’s mention some examples: does the localization meet only 30% of the legal requirements and there is a lot of development to do? Be clear about it since the very beginning. Isn’t the general manager at the location committed to the project? Let HQ know about that. There are tasks that depend on other people or 3rd parties and you cannot solve them by yourself, so it is better to share them with the project sponsors since day one so that you can find a solution as a team…or decide to run the risk.
3) Localization is key.
Many challenges of projects in Latin America stem from legal requirements. It is important to know which those requirements are, and to quickly map them versus the ERP capabilities. The result can be good, or sometimes the result is a huge customization effort that drastically changes the implementation figures. I’ve seen companies canceling projects before starting for this very reason. And good for them! They found out in time that they did not have the money for such an effort. If you are selecting an ERP, this is also an essential point to look at. What locations does your company have abroad? Does the software comply with legal requirements in all of them? Does the software vendor maintain localizations? All these questions will help you decide on the right ERP for the company, and choosing software with good localization capabilities will mean savings in the future.
4) Look for specialists.
Unfortunately, the consulting market in Latin America is not a garden of roses. It is good to save some time to do the necessary research and find good ERP experts. In my opinion, a vendor with proven ERP knowledge, global experience and that can also break through the language barrier is the right way to go. Being in the same time zone is always a plus. Look for references, ask the right questions. The ERP market is not new; there are references out there.
5) Don’t delay post go-live support decisions.
Support is something that needs to be sorted at some point…before the go-live. Latin American countries speak another language, you need resources with localization skills, and maybe different time zones. There is no right or wrong when speaking of support strategies, but there is a good one for your company for sure. It is better to deal with this topic sooner rather than later, as some support options might not be possible close to the go-live date. There is a lot to talk about this point, but the first thing to decide is if you want an in-house team, if you will outsource it, or if you will run a mix; that is also an option.
No matter what ERP you have selected, spending time beforehand in going over the above-mentioned points is certainly worth it!
Cecilia Suarez,
CANNY Managing Partner