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Implementation of ERP for Foreign Enterprises in Japan

When a foreign enterprise in Japan plans to implement an ERP system, it usually requires approval from its headquarters in the form of a final decision. From this standpoint, headquarters IT department are often closely involved with such projects from system selection to implementation. Sometimes, a partner who participated in a headquarters-based IT project is invited to visit a local office for project support and necessary coordination.
As a global organization, the headquarters needs information such as financial consolidation, IFRS compliance and inventory status. To meet such corporate requirements, it is essential to standardize elements such as the structure of accounting code, item masters, dimensions, inventory valuations, the inclusion of charges into item cost, security and internal control.

 

Common Approaches to System Implementation

The following three approaches are most commonly adopted for system implementation by foreign companies in Japan.

 

sample
Develop and deply a template
The headquarters has decided to implement Dynamics ERP at the Japanese office and has already developed a corporate template.
Designated by the headquarters
The headquarters recommends Dynamics ERP as the standard ERP platform for overseas subsidiaries.
Initiative by the affiliate in Japan
The affiliate in Japan takes the initiative in selection and implementation of the system.

 

 

The headquarters has decided to implement Dynamics ERP at the Japanese office and has already developed a corporate template.

In this case, a corporate template (database) has already been developed by the headquarters for global use. Because it is not feasible for the IT staff at the headquarters to gain a sufficient understanding of business practices and taxation rules in Japan, the system template developed at the headquarters is difficult to adapt to the Japanese business environment without adjustment. It becomes necessary to translate the template and also develop specific functions to meet the local requirements such as Collective Invoices, Firm Banking, Promissory Notes, Sales Tax, Distribution Management and related report output.

Proceeding with the implementation project

To start the project, it is first necessary to obtain sufficient knowledge about the corporate template developed by the headquarters. This requires a “Knowledge Transfer” session involving the headquarters IT staff, the Dynamics partner who participated in development or the Dynamics partner who is assigned for global project support. After validating the template, Pacific Business Consulting sets up the system according to Japanese requirements.
As mentioned above, it is difficult to implement a corporate template for a Japanese office without any customizations. Functions to accommodate local business practices and/or customizations specific to the Japanese office are added to the system. While the project is underway, it is important to monitor the project status and hold periodical meetings with the headquarters IT staff. When the need for an add-on function is identified, corporate approval is usually required. All the above communication is to be performed in a multi-language environment. Sometimes, information exchange with regional headquarters located in Singapore, Australia or Hong Kong is also required.

sample

 

 

Headquarters recommends Dynamics ERP as the standard ERP platform for overseas subsidiaries.

When Dynamics ERP is a recommended package, the system is developed based on the corporate requirements prepared by the headquarters.

Proceeding with the implementation project

Firstly, it is important to have a clear understanding of the corporate requirements. After validating corporate requests, local system development is to be performed in line with the global guidelines. If the corporate requirements do not exist or are not clear enough, joint efforts with the headquarters IT department may be required to settle the issue.
In comparison with the first approach, this allows a more flexible and user friendly system to be developed according to the requirements of the local office, to the extent that the basic corporate requirements are reflected. Nevertheless, it is essential to maintain good communication between headquarters and the local organization by providing the headquarters with the appropriate project status reports.

sample

 

 

The affiliate in Japan takes the initiative in selection and implementation of the system.

The Japanese office chooses the ERP system to be implemented and develops its own system independently.

Proceeding with the implementation project

Among the three approaches, this pattern provides the most flexible implementation. However, the company in Japan has to start by selecting an ERP system together with an implementation partner. At this stage, there are several points to be taken into consideration, as detailed below:

  • Selecting a worldwide, well-known and reliable ERP solution
  • Selecting an ERP solution with multi-language and multi-currency support along with IFRS compliance.
  • The Availability of bilingual consultants at the local partner to maintain good communication with the headquarters as required.

In addition to ERP implementation, many foreign enterprises in Japan ask to have their IT infrastructure built at the same time. Therefore, confirming the specifications of IT infrastructure with the headquarters is another important step.

In each approach, establishing and maintaining good communication between the local offices and the headquarters plays a critical role in successful system implementation.
Pacific Business Consulting always supports its customers’ implementation projects with qualified bilingual consultants from across Asia.

 

 

 

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