Practical know-how of the Global Project

Hitoshi Goto

Ukihiko Takagi

In Part 3, we discussed risk management of IT engineers participating in overseas projects. This time, we will look at the point of implementing "common system" between headquarter and overseas subsidiaries.

Assigning dedicated key person to drive the project.

In the system implementation project, there are various difficulties of deploying system established by headquarter to overseas subsidiaries that already have implemented their own system. How can we implement a standardized system while solving these problem?

We will share a story when we deployed template of global accounting system of a global manufacturing industry to Australia. Standardized systems were implemented on the base of Oracle E-Business Suite (hereinafter referred to as EBS).

Although Australian subsidiaries have already implemented systems that use Oracle databases (hereinafter referred to as Oracle), they have used database versions that was older than standardized system database version.

In deploying a template of standardized system, customization according to requirements of each subsidiaries is basically unacceptable because it causes various inconsistencies. As a result, local opposition to this issue was extremely strong, and driving the project was difficult.

There are three points for success in such a project.

The first point is to assign a key person who is dedicated to powerfully driving the project while doing tough negotiation with the user department.

When implementing ERP, it is important to minimize add-on program development as much as possible. Not only in Australian case, but also in other cases there are existing systems, and it is normal that local business users are accustomed to that function.

Therefore, the implementation of ERP requires a key person to coordinate with the local business department. In such a case, it is important to assign a dedicated person who has exceptional strong negotiating ability.

It is better to ask key person who understand standardization in the local business department. In general, bargaining power of person in the Information Systems department may became weak (in some cases, it is better to assign person who have influence in the Local Businesses department).

Second, if it is voluntary customization on the local side, it is better to allow them to customize without rejecting. In some cases, customization of ERP is not done at all, but it is not very realistic. Even if you force them to carry out, there are risks that business operation become inefficient or they will not use in business operation. Therefore, it is realistic that allow them to customize to a certain extent.

However, in this case, the cost must not be paid by system implementation side, instead, the in headquarter side. The cost of customization can be reduced by implementing only the local budget.

Third, even if it is customized by the local budget, it is not allowed to customize the individual requirements that have inconsistency with standardization defined in headquarter. Since the primary purpose of ERP implementation is to standardize businesses, customization is not allowed. For example, integration of part number are relevant to realize "Visualization" on a global scale.

Western companies like a centerlization to headquarter and Japanese companies likes a decenterlization to local

Global major companies have many systems, including supply-demand management, procurement management, production control, order management, and accounting.

It is common for Western companies to integrate these systems and let overseas branch offices use them. As a result, both the business and the structure are unified with headquarter. In principle, delegation of authority is not carried out. Branch offices around the world will move according to the instruction of head office.

On the other hand, Japanese companies often implemented their own systems in each country and region (although they have recently approached the Western type). Operational authority has also been delegated to each country and region, and the delegated side has implemented unique system with their own budget.

The reason why such delegating of authority was necessary was that they could not retain highly talented people at overseas sites without such delegation of authority.

Based on the fact that Japanese companies tend to decenterlize to local, let's realize that we need to drive standardization through negotiations.

<<Read [Part 3]Read [Part 5]>>

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