Due to the increased labor cost in the Japanese domestic market and the necessity of taking measures against FTP/FTA recommendations as well as the trend of globalization, many Japanese companies are seriously considering to expand their business operations to overseas countries in Asia Pacific, South America and Middle East. Under such circumstances, the demand for implementation of ERP system at their overseas offices is also getting strong. The compliance with IFRS, consolidation of financial information and the visibility of inventory status are increasing their importance. Those demands are evolving not only to large enterprises, but also to small and mid-sized companies as well.
In the previous decade of system implementation at overseas Japanese subsidiaries, the uniquely developed system or Japanese domestic package systems were used for SCM and/or manufacturing, and only financial accounting system was selected from local suppliers and afterward those independent systems were connected each others.
In the recent trend however, most of Japanese companies consider the implementation of ERP solution from the beginning.

Recognizing this new trend, Pacific Business Consulting, Inc. has been supporting ERP implementation for overseas offices of Japanese enterprises since 2001. PBC has been continuing our challenges to create further improved solutions in the areas of Project Management, Implementation methodology, Customization, Documentation, Localization and Support Services. Our commitment to Microsoft Dynamics products has contributed to create PBC’s current position in the industry. Selecting the best Dynamics partner in each country is not an easy task and the success of implementation depends highly on the quality of professional consultants. PBC has been engaged in this important task with special attention.

PBC is committed to support the most successful implementation of Dynamics solutions at overseas offices of Japanese enterprises by providing bilingual resources from Asia pacific countries and working closely with experienced and reliable Dynamics solutions partners in each country. For the system implementation, PBC uses a world-wide proven methodology called “Sure Step”. After the system go-live, PBC offers maintenance and support services based on the specially developed service scheme using Dynamics CRM and our AquaGuard product.

If you have any queries about ERP implementation for overseas offices, please contact us from the link below.

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Common Patterns of System Implementation

The method of system implementation for overseas subsidiaries can be classified into the following three patterns.

　Japan HQ develops a corporate template and implement it to their overseas companies.

In this case, Japan HQ confirms the system requirements and develops a corporate template (standard system database) for overseas companies. The template will be implemented to overseas companies in roll out projects.

How to proceed with Implementation Project

Firstly, Japan HQ conducts analysis to specify the Fit&Gap among requirements for the corporate template, the localizations provided by local Dynamics partners and specific business requirements of each overseas company. The followings are the examples of corporate requirements;

• Code Structure (Chart of Accounts, Customer/Vendor, Item)
• Standardized inventory valuation
• Definition of dimensions (Department Code, Reason Code for increase/decrease, Item Category Code etc.)
• Interface with Consolidation Systems and BI Tools used at HQ
• Data extraction and interface definition to obtain accurate inventory data
• Overall Business Process
• Considerations for Internal Control, Security, Audit and J-SOX.

The above are considered as very important items to be clearly defined at preparatory stage, prior to start of roll out project.
Usually the initial site for implementation project is nominated at the start of the corporate template development. So the requirements of initial project site are usually reflected on the corporate template. Because the template is developed at HQ, system quality can be maintained high. The actual system implementation is performed by local Dynamics partners. The local partner receives a “Knowledge Transfer” of the corporate template at the beginning, continues requirement analysis, and performs system design and development followed by user training and live support.

	Merits	Demerits
Japan HQ	・Knowledge of the corporate template remains at HQ, which enables the HQ staffs to continuously help roll out projects in overseas companies. ・The standardized system development meeting the corporate requirements becomes possible.	・Time and efforts are required to develop the corporate template.
Overseas subsidiaries	・The implementation project is led by HQ so subsidiaries can receive support from HQ.	・it is difficult to reflect all local requirements in the standard system.

Japan HQ prepares Corporate Requests documents and make overseas companies develop the system in line with them.

In this case, Japan HQ prepares corporate requests documents and overseas companies will implement the system based on the request documents.

How to proceed with Implementation Project

The HQ confirms the requirements and specifies them in the corporate request documents. The documents may be translated into English for the use of local Dynamics partners. It is also possible to roll out the system database developed in the first project to other overseas offices.

	Merits	Demerits
Japan HQ	・By keeping good control of local Dynamics partners, overall corporate requirements can be reflected in the systems.	・With too many country specific requirements taken in, the system database developed for the first site might not be adaptable for roll out in other overseas companies. ・The constant local partner monitoring is needed not to neglect the inclusion of the corporate requests.
Overseas subsidiaries	・As far as corporate requests are supported, local requirements can be reflected in the system which allows more friendly use of the system.	・Due to the increased development burden on the local organization, the risk for the implementation failure is increasing.

The overseas company takes an initiative for both system development and implementation.

In this pattern, each overseas company implements the system individually.

How to proceed with Implementation Project

Because the initiative is taken by the local subsidiary, this pattern is considered as the most challenging one. The careful monitoring from the HQ is required to make sure that the system is developed in the way that the HQ demands, also whether the original schedule and the budget are being kept.

	Merits	Demerits
Japan HQ	・There is a possibility for lowering the development cost.	・There is a high risk that the corporate requirements are not reflected enough in the system. ・It is quite difficult to develop the standardized system among multiple overseas subsidiaries. ・If the development ended in failure, the project has to be re-started from the beginning.
Overseas subsidiaries	・The local requirements can be flexibly included in the system.	・If the development ended in failure, the project has to be re-started from the beginning.