Connecting Global Operations

April 3, 2006 by admin

Global companies with smaller subsidiaries or remote offices face the challenge of integrating operations and consolidating business processes across the whole company, often worldwide. The key advantages they’re looking for: transparent and efficient collaborative processes and standardized reporting across company borders. It’s just not enough to settle for multiple country-specific systems, with potentially thousands of interfaces to maintain. SAP is the backbone for many large companies, and today a significant number are using SAP Business One to bring outliers into the fold.

A big tent concept for business operations

Fundamentally, business managers want to bring subsidiaries and remote offices into the main tent, with a solution that functions fully and integrate completely with headquarters operations. The problem with leaving remote locations to use non-integrated business applications is that it hinders companies from realizing operational visibility and control across the corporate ecosystem. And yet, a fully functioning solution powerful enough to manage the operations of headquarters or large production facilities is probably not a good fit for smaller local sites, such as sales offices. What’s required is a solution that serves both the requirements of local offices and the overall corporate need for control.
Imagine a global engineering company with sales offices in 30 countries – and as many local currencies and language preferences. With SAP solutions running business operations at headquarters and the major production plants, SAP Business One is a good choice for the smaller offices. The solution is easy enough for the local offices to use without requiring great resident IT strength, and it is equipped to handle 37 country versions of language, currency, and tax considerations. Sales reps and sales engineers in each location can configure products with their local language and currency preferences, and place orders via the company’s electronic order interface to a production facility. It’s an easy- to-execute process that ensures far cleaner orders. In addition, because the system is completely integrated, reps provide accurate delivery promise dates for manufactured products, and track and meet their scheduled commitments. Local offices can easily create standard reports, which include: accounting, enterprise, inventory, financial and reports to aid decision making.
“Adopting a common platform across the business ecosystem can have a substantial impact on companies’ ability to respond quickly to customer demand and market changes, increase operating efficiency and meet more stringent reporting requirements,” according to Bob Anderson, Research Vice President, Gartner, Inc. “Even many comparatively well-run businesses have yet to achieve real-time visibility and control with their subsidiaries and remote operating facilities, relying instead upon periodic updates on limited spreadsheet applications.”
An example: a manufacturing company sales person in a small, remote office enters an order. The transaction automatically populates appropriately throughout the entire system, impacting inventory, production and delivery schedules, customer record, discounts, credit terms, commission payouts, and balance sheets. The sales person can promise firm delivery dates and company managers have a single view of the whole transaction.
From the corporate standpoint, management gets a single, comprehensive view of all corporate operations, and views data in their choice of language and currency. This kind of information can enable them to accomplish some things that were not possible before. For instance they can consolidate purchase decisions from around the globe and use that intelligence to advantage when negotiating with vendors.

Saving money by automating essential processes

The SAP Business One solution for the German maker of markers and other writing implements, edding AG, works just this way. The company distributes its markers via 12 subsidiaries in more than 70 countries. In 2004, management started a campaign to optimize cross-national reporting and internal process control, integrating its 5 European subsidiaries in the SAP system landscape. By deploying SAP Business One in all of its international affiliates, edding improves efficiency while lowering costs in all core business areas, such as accounting and financials, customer relationship management, sales and purchasing, logistics and supplier relationship management
Ulrich Koennecke at Lufthansa Systems Group, which helped edding with their SAP Business One implementation observed, “edding can now reduce its inventory, meet delivery dates more easily, and save real money because of a higher level of automation in many essential processes. In addition to this, they have a custom-made integrated reporting that can be used globally.” Other benefits relate specifically to operating on integrated technology. For example, there is economy in the simplicity and efficiency inherent in the ability to develop once and deploy many times to many locations.

A solution that fits the needs of each subsidiary’s situation

Cosmetics powerhouse L’Oreal has more than 45,000 employees in nearly 70 countries around the globe. The L’Oreal headquarters operation in Paris has long run on mySAP Business Suite solutions. Many of its smaller subsidiaries, however, ran diverse, disconnected applications from other vendors, and many simply had no ERP software at all.
Philippe Cayla, Project Leader at L’Oreal, said that he and his team were very pleased that they could efficiently apply the common SAP Business One template to each subsidiary’s language, currency, tax code, and local customs, while leaving room for modifications. With success of its initial implementations in Hong Kong, Serbia, and Ukraine, L’Oreal plans ten to 12 implementations in 2006 and will complete its deployments in 2007.
Cayla addressed the important issue of getting subsidiaries on board with integrated functionality without overburdening them with highly complex system management issues. He said, “SAP Business One was just right for these subsidiaries. It is easy to use and administer and has the level of functionality the subsidiaries need without overkill. It also represents excellent value. SAP Business One is affordable for small and midsized companies, mainly because it can be rapidly rolled out and implemented.”

Respironics breathes easy with its new solution

Respironics, a medical device manufacturer headquartered near Pittsburgh, PA, is growing dramatically because of its successful introduction of new and innovative medical devices and breakthrough products for respiratory therapy and sleep needs. It has 26 offices and manufacturing facilities, and markets its products in more than 125 countries.
Ed Pisula, Director of Enterprise IT Architecture and Application Development at Respironics noted that the company also grows by acquisition. When the company began a joint venture to distribute products from a facility in Switzerland it seemed excessive to implement another instance of the SAP ERP software they have long run at headquarters. SAP Business One was a much better choice, with appropriate functionality scaled to the size of the operation.
Pisula said that the Swiss facility can now handle a full range of business operations. “With SAP Business One, our users can take and fulfill orders, track warranties and repairs, bill customers, and collect cash,” he explained. “Perhaps most importantly, the solution enables us to close the books each month in a consistent manner and get the results back to headquarters quickly.” Month-end processes that once took nearly a month with manual spreadsheets now execute in only two days.

A house united

As the saying goes, “a house divided cannot stand.” SAP Business One deployed in smaller subsidiaries and remote offices unites and harmonizes them with headquarters on both business process and technology levels. The solution’s built-in integration capabilities link heterogeneous IT environments that are typical of international organizations, enabling transparent and efficient collaborative processes across company borders.

Christine Macfarlane

Christine Macfarlane

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