How to prevent your IT system slowing your global expansion
Going global doesn’t always go hand-in-hand with complex IT systems. Read what the TimeLog CEO recommends you pay attention to when expanding onto the international market.
That said, it cannot be denied that going global is both tricky and risky. And I am not just speaking based on my 12 years as VP at Ericsson.
You may already be familiar with the story of Walmart, which came severely unstuck in South Korea?
One of the reasons Walmart never succeeded in gaining a foothold in South Korea is that the company failed to implement its IT system in the country – even though its IT system is actually one of its biggest competitive advantages.
The consequences? Losses of around USD 10 million in 2005 alone.
Here are my five top tips for avoiding falling into the same trap as Walmart.
Tip 1: What is your reporting need in an IT system?
If your legal entities are to work closely across international borders, you need to determine the easiest way to generate relevant and accurate reporting of your KPIs.
What is the definition of a legal entity?
A legal entity is an individual or group that has legal rights and duties related to contracts, agreements, payments, transactions, obligations, penalties and sues.
It may be that you need to be able to extract all data in Excel? Or to have the opportunity to collate all your reporting in a BI tool?
Alternatively, your country managers may have different needs regarding which KPIs they are to be able to see. For example, some country managers need to be able to generate reports on the performance of their legal entities.
Others, however, will want to view the current load on their employees – but don’t want these data to be available to other country managers.
So take your time to identify a system that supports your reporting needs without it being too complex for the employees who have to work with it.
TimeLog allows you to generate reports featuring the performance of all your legal entities. You can also filter the data in these reports down to the level of the individual legal entity, such that the program only displays the performance of the unit selected.
Use TimeLog reports to get an overview of which resources you have loaned out to one another
It should be easy for you to keep track of whether your legal entities receive payment from loaning out resources to each other. The “Intercompany analysis” report in TimeLog presents an overview of which resources have been loaned out to other legal entities.
The top row here shows that TimeLog Mexico and TimeLog Sweden can invoice TimeLog Denmark for 12 and 22 hours’ work, respectively, which they delivered to TimeLog Denmark’s project.
Tip 2: Keep things as straightforward as possible for your employees
When looking at IT systems, it’s crucial to bear in mind that it should be as straightforward as possible for your employees to:
- register hours
- create projects
- establish an overview of who is working on the project, and how many hours they have worked on it
The best way to do this is to ensure that they only need to work in a single, shared system, irrespective of whether they are affiliated with your legal entity in Sweden, South Africa or Mexico.
Tip 3: Make it simple for the project manager to assemble a dream team for the project
Another benefit of working in a single, shared system where all your data are centralised is that it’s easier for your project managers to put together a “dream team” with the right skills for their projects across national borders – assuming that the resources are available, of course.
Your project managers should only have to set up the project once and always have an accurate overview of all your resources: who’s available and who’s already working on another task?
With access to these data, your project managers can always see which resources they can allocate to their projects.
Tip 4: Establish a clear separation between your finance department and the rest of the company
In many companies, ERP – or their financial system – is a key tool to which many different employees have access. Think about whether this is appropriate for you.
The chances of mistakes are high if your project managers have to use the financial system for invoicing customers, as this could require them to work in a system that may be unfamiliar to them. And this can create concerns in the finance department as well.
There are also financial benefits to be gained when only a few employees need a license to the financial system.
Tip 5: You do not need to invest in an advanced ERP system
Many company executives worry that internationalisation and complex IT systems go hand in hand. However, there is no need to invest in an advanced ERP system in many cases.
Numerous other systems can support your internationalisation just as well as ERP systems – and which, as an added benefit, are cheaper, quicker to implement and easier for your employees to learn to use.
PSA systems are an attractive alternative to ERP systems, as they make it comparatively simpler to set up your legal entities – without requiring you to compromise on the complexity you need in an IT system.
What is PSA software?
PSA stands for “Professional Service Automation”. PSA is a cloud-based platform that links together the internal work processes that apply in the different areas of your business. The platform comprises features such as time registration, project management, resource management, invoicing and reporting, and is typically integrated with a payroll or CRM system.
In many cases, PSA platforms also prove to be more flexible than ERP systems because they:
- Allow each legal entity to work with payroll and finance systems that are adapted to the regulations in effect in the respective country through integrations
- Support the implementation of “watertight seals” in your business by giving you full control of precisely which employees are to have access to which data