Taking Multi-Company ERP To Greater Heights With Cloud
If you have experience managing multiple companies operating in different geographies, languages and currencies, then you already know that an ERP system must be able to be aligned to the unique complexities of your organization and supply chain. Multi-site SMEs entering into an ERP selection process need to fully understand the capabilities labeled by vendors as “multi-plant” or “multi-company” … because, based on our experience, they vary greatly vendor to vendor.
The primary purpose of ERP is to tie together all parts of the enterprise to share information and coordinate activities so that all functions are working toward the same goal of delivering value to customers. Organizations that have multiple sites—plants, distribution centers, warehouses, sales offices—face significant challenges in tying that information together.
Multi-site ERP functionality has two main areas of information transfer and coordination to address. Financial information transfer is quite straightforward, primarily because the information does not need to be interactive and real-time. Periodic reporting from remote sites to corporate for consolidation and analysis is generally sufficient. The most challenging part involves language translation, currency exchange, any differences in the chart of accounts—not to mention compliance with varying local government regulations and financial requirements.
Operational data, including inventory balances, allocations, and transactions, must be more interactive. Consider inventory data. Centralized customer order management, or sites handling orders for products under the control of other sites, need visibility into balances and availability at all involved sites, as do centralized buying and planning. And of course, proper accounting for these transfers requires linkage back to the system’s multi-company financials. The system should automatically generate orders and invoices across entities (units or companies), reducing the administrative workload.
Multi-company ERP systems must efficiently manage both financial and operational data, as well as coordinate master data, including item definitions and classifications, customer and supplier data, and bills of materials, to name a few. Whether the management of your data and transactions is centralized or decentralized, there must be a master data management toolset that enables accurate and reliable enterprise reporting.
The cloud deployment of an ERP system with multi-company capabilities is probably the most viable option for SMEs. Data is no longer pushed or pulled, residing securely on the cloud and accessible from any location at any time. And, the application support required for centralized data and process management becomes simpler. Because the system is consistently implemented, supported and managed across each location from a technical perspective, all that’s left is change management. And finally, a cloud-based ERP system with multi-site capabilities is significantly more cost effective. Consider the capital investment and resources required to roll out an on-premise system at each of your sites. In the cloud, all your subsidiaries need is a connection to the internet.
How well are you managing the integrity and availability of data across multiple companies, geographies, languages and currencies? Has cloud technology changed your approach?