Steve
Sprague, Finextra
Brazil Nota Fiscal version 3.1– On-premise solutions force you to
monitor, design and implement all Nota Fiscal issues. Managed Services
offer economies of scale that can reduce annual support costs by 80 percent.
Top 5 Reasons Why Companies are Using Brazil version 3.1 to Transition from current on-premise solutions to Managed Service Solutions
In this part of series on using the Brazil Nota Fiscal version
3.1 changes to evaluate the strengths of cloud and managed services over
on-premise solutions. I wanted to discuss the issues concerning ERP
customization and maintenance. This is mission critical especially if your
organization has a strategy of deploying a single instance of an ERP around the
globe.
With so many complicated ERP issues, why do companies want to
keep up with the legislation and constantly implement the changes. Especially, when the requirements are
predominately the same for all companies. These are government mandates and standards
after all.
Managed Service providers provide two huge benefits over
on-premise solutions:
- First, Managed
Services and more specifically hybrid cloud deployments can offer
economies of scale gained across their install base which turns into hard
costs savings in annual support and maintenance costs.
- Second, Managed
Services and more specifically hybrid cloud deployments can buffer the
global ERP Center of Excellence from changes. Some issues such as extended
attributes and customer customizations are absorbed by the service
provider. Additionally, some upgrades can be done without affecting the
core ERP ERP platform. I found this quote to be intriguing from the
Kellogg CIO in Latin America - Gustavo Lara, LA Regional CIO for
Kellogg’s. “With {managed service provider) solution, our internal teams
can focus on running our business rather than focusing on researching,
implementing and reconfiguring our ERP system to meet the changes for
Brazil Nota Fiscal and Mexico CFDI.”
By transitioning to a managed service, your internal teams can:
- Avoid the burden
of research, design and implementation – with an
on-premise solution the IT organization must figure out how the Brazil
changes will affect their ERP deployment. In our next article, we
will cover the “real” cost of this change management.
- Eliminate Fire
drills – most global ERP teams look at
rolling out an ERP in waves across processes and countries. They also
tend to have a very rigid procedure for updating the ERP system.
Often lead times to get on the COE calendar can be 6 to 8 weeks and in
many cases the COE only wants to do major upgrades once or twice a
year. The pace of legislative change in Brazil is constant and is
never timed to the ERP upgrade strategy. A managed service provider that
guarantees your systems are maintained, eliminate unforeseen fire drills
as they know when the legislative changes occur and coordinate the
updates.
- Reduce upgrade
timing issues as many companies run N-1 maintenance strategy. It is common for the ERP maintenance teams to run at
least one support pack behind the latest releases. I work with
customers that are still 4.7c and many who are in the process of upgrading
to ECC 6.0 during 2014. The issues arise when ERP releases new
country requirements – logically they are released in the latest support
packs. This can cause an issue with maintenance teams to decipher what is
needed and how it will affect the ERP system they are running. Part of the
managed service provider responsibility is to understand your company
“Delta” to the legislation to assist with the changes. Why spend
weeks figuring out the issue when it can be done in a 30 minute call.
- Simplify
problems with ERP customizations and extended attributes – These are the processes that are unique to your
business and your customers. It is not always easy to get the data
from your ERP configurations into the Nota Fiscal format. Some of
our customers sell “kits” and this unique packaging takes some unique
manipulation to transform into the Nota Fiscal requirements. And for
some cases, the data doesn’t come from ERP at all but are required
transactions. For example, when you bring in goods to the country, by law
you must declare the fiscal value of the goods sometime referred to as a
Nota Fiscal Entrada. This information often comes from an extract from the
Freight Forwarder you are using to import the goods. It still needs
to be transformed, validated and tracked.
- Reduce the cost
of maintaining compliance -In a recent
article (in Portuguese), Alexandre Quinze, CIO América Latina da Philip,
discusses the cost and productivity benefits achieved by transitioning off
an on-premise software for Brazil Nota Fiscal compliance.
- Reduction of annual maintenance costs by upwards of
80%
- Increase in productivity of local Brazil business user
by 25%