If you plan to roll out your existing SAP system to Asia, you have to consider both tax and local regulations as well as cultural differences that might impact your project success.
This certainly brings a million questions to your curious mind!
What are the fundamental differences to keep in mind for an SAP Rollout to Asia? What are the factors to consider for an SAP Rollout to Asia? Any tips for a successful SAP Rollout to Asia?
In this article, we explore some of those differences more precisely. Moreover, we discuss the options and potential approaches for a successful SAP rollout to Asia.
Read on as we answer it all!
Fundamental differences to keep in mind for an SAP Rollout to Asia
1. Cultural differences
The countries within Asia are anything but homogenous. A “Yes” received from a person in Singapore has a completely different meaning to a “Yes” received from a person in Thailand or Japan.
Generally, people are less confrontational in nature compared to western countries – there is a general desire to achieve harmony. This leads to fewer questions and “challenges”, which in turn may prevent you from finding out all of the business requirements promptly. It also can pose a problem during user training – users may not tell you that they did not understand what you were telling them, as they don’t want to upset you.
Time is relative: You may experience that meetings don’t necessarily start punctually, which is considered acceptable in many places. And – contrary to specifically German culture – content is not as important as context. People want to “like you” first before they conduct business – so, be prepared to spend some time outside business hours (or even during business hours and meetings) to get to know the other person. This is again more so the case in China and Japan compared to Singapore.
2. Legal differences
Obviously, every country has its regulations that need to be taken into account when you roll out your SAP Solution to Asia. Many countries require certain documents to be printed in the local language (e.g. Thailand), or you even have to use government-approved systems to issue invoices (e.g. the “Golden Tax System” in China). Some other countries again require a certain number range for a legally issued invoice (such as “Faktur Pajak” in Indonesia).
However, in many cases, you may come across situations where a certain requirement given by the business is not a legal and tax requirement after all, but much more a business requirement. To be able to differentiate “real” legal requirements from “current business practices” will help you to avoid unnecessary customizations in your software and allow you to align business practices across the various countries.
Considerations for an SAP Rollout to Asia
Do you want your SAP solution to be used in English in the individual countries, or do you want to provide the solution in the language spoken in the respective country?
Both options have advantages and disadvantages, and you need to consider both the existing business environment and standard of education of your team in the respective country, as well as your desire for a homogenous SAP environment.
In one of our earlier SAP rollout projects, we implemented SAP in Korea. A mixture of English / German-speaking consultants and Korean SAP experts was our implementation team members. The SAP solution was implemented in English – at the end of the project, the Korean team members’ English language skills were significantly improved. They were able to use the system in both English and also the Korean language. However, this approach required a largely full-time, on-site presence of the consultants to guide the local team members through both the changes in current business processes as well as getting familiar with the English terminology.
In our experience, the best approach is to have a primarily English driven project where the selected key users are trained in English. Subsequently, transfer knowledge in either English or the local language to the final end-users. This also helps to build a well-supported internal team in each country – a component for a successful SAP rollout that cannot be overstated.
2. Template approach
One of the main questions for a successful SAP rollout is what kind of template approach works best. When we speak to companies looking to rollout SAP to Asia, the first comment usually is “we just want to roll out our existing template to Asia”. Before we go into the finer points of the template rollout approach, let us first have a look at what constitutes a template in the first place:
a) Do you want to use the same client for the SAP rollout to Asia?
This is another question that requires a bit of planning and consideration. If you use the same client you can achieve higher integration of the Asian subsidiaries into your business environment from a technical perspective, but you limit their options for individual customization. On the other hand, if you allow a lot of freedom for individual countries to meet their specific business requirements, you may end up with dozens of number ranges, document types, groupings, etc. etc.
You also need to take into account a long-term business strategy. If your company is a family-run, long term thinking traditional business, then this might be a good option. If on the other hand, you run a very agile business driven by M&A opportunities, then having subsidiaries within the same client makes later divestments difficult.
b) Do you already have a template that you can use?
You may have implemented SAP in your main factory in Germany – but can you simply roll out the existing solution to your factory in China / Malaysia / Vietnam? In many cases, an existing solution built based on e.g. German requirements is fairly complex and tends to be more sophisticated than realistically reasonable in some of the Asian countries.
We have seen in many advanced environments, where German solutions are heavily customized to cater to the sophisticated challenges. Although such solutions can be very automated, they require much more time and effort in subsequent upgrades. Also, it’s more costly to maintain.
We tend to recommend the construction of an “Asian Template” build on SAP’s best practices if the “source system” which is the template that heavily customized or “unnecessarily complicated” for the Asian subsidiaries. Also, if you are planning to have a separate client for the companies in Asia. With the condition that the business guidelines of the originating country must be followed.
c) What is the preferred rollout sequence?
A roll-out of SAP to Asia covering multiple countries planning should be not only from the technical perspective but also to consider business implications. Do you start with the largest entity or the most complex, or do you prefer to demonstrate quick-wins first? We recommend having solid planning sessions before diving headfirst into a regional rollout, getting input and buy-in from the individual country. This will enhance your chances of success.
5 Tips for a successful SAP Rollout to Asia
1. Plan the sequence
Spend some time to review your location operations in the individual countries. Furthermore, speak to the country heads and key users on topics such as change management and business needs. Identify which locations require a more sophisticated solution, and which locations benefit from keeping with SAP standard maximally. Identify the level of English language skills, the desire to change and the organizational readiness before embarking on the rollout
2. Plan data migration early
Rollout projects tend to be quick with an aggressive timeline. Therefore, we recommend tackling data migration as early as possible in the project. This specifically pertains to cleaning up outdated master data that is no longer relevant and does not need to be migrated at the later stage.
3. Get buy-in from the local organization
Plan visits to the relevant location to inform them about the project, the steps and what will be required from them during the rollout project. Getting buy-in from the local teams will go a long way towards project success.
4. Clearly differentiate legal requirements from business requirements
Not every requirement given by the local key business users is a legal requirement. Many of such requirements are simply a matter of existing business practice. Knowing which of the requirements are legal requisites, and which are not, allows the project team to make better decisions for the benefit of the overall rollout project.
5. Spend sufficient time training, and build a local competence team
During the rollout project, we recommend building a local team of “SAP Experts” in each country. Those are preferably the key users who heavily involved throughout the entire project. Above all, they will subsequently serve as the first level of SAP support for your organization. This approach will go a long way to ensure better usage of the SAP system after going live. Especially when those key users understand local situations, are on-site to help and translate local business issues into global SAP “language”. Besides that, they facilitate better communication between your global SAP competence center and the end-users in different countries.
“Our experience working with Axxis Consulting has been exemplary. The consultants are professional, empathetic, and go above and beyond the project scope. That was a critical factor for the project’s success. I highly recommend Axxis Consulting for any SAP ERP implementation within the APAC region”
Mark Oro, Financial Controller / Company Director
Axxis Consulting is part of United VARs, the leading alliance of SAP solution providers for the mid-market. We are certified with the highest SAP status as Platinum Partner. Thus, we count with the leading solution providers across the world to guarantee the best service and support for your projects including international roll-out, ERP optimization and cross-border nearshoring.