ERP for internationally operating SMEs
18 Sep

ERP for international medium-sized companies

The growth of medium-sized companies with branches abroad is great. Markets and globalisation make business activities abroad attractive. But the ERP system must also be able to be integrated in the international business locations. What are the requirements for internationally operating SMEs?

More and more medium-sized companies are becoming international

More and more medium-sized companies worldwide want to go abroad. There are many reasons for this. A study by the Bonn Institute for SME Research (IfM) shows that international business promises success. The turnover of internationalised companies increased by 60 %. This does not only concern manufacturing companies. The growing markets are also making foreign sales offices more and more attractive for companies. Due to the rising Globalisation also attracts companies abroad that have been successful on the German market for a long time.

On the trail of the business partners

Another reason for the great interest of SMEs in becoming active abroad is the large companies. Suppliers in particular often follow their clients. In other words, corporations - for example from the automotive industry - that operate production facilities in Asia or Eastern Europe internationally. According to the IfM study, a full 37 % of SMEs are already represented abroad. 20 % are planning to become internationally active. And the trend is rising.
The attraction of this option becomes understandable through the numerous success stories of companies active abroad. Medium-sized companies that also shift their focus abroad are said to be twice as successful (IHS study "Internationalization-a driver for business performance").

The role of ERP software for internationalisation

But how can this step be implemented effectively?
The hurdles that a medium-sized company has to face when it wants to expand on foreign soil are not new. IT systems in particular have to be adapted internationally. Above all, this concerns the respective ERP solutions of the companies, which have to be individually adapted to national languages and legislation.
Which ERP system is suitable depends on many different factors. However, it does not always have to be one software for all locations at the same time, for example. It often makes sense to equip the first local branch with an ERP that can be managed locally. Costs and integration efforts thus remain very low.
But if it is already the third or fourth branch, it is important that the different systems can interlock. Here, a uniform database on a common platform is necessary. Spreadsheets, on the other hand, are the faster and simpler solution, but are not advisable in the long run.

The most costly, but also most effective solution is to adapt the ERP system to a system that can be used internationally. Costs and implementation time are higher and longer than with other variants. Nevertheless, this method is popular because it provides fast and direct access to important business figures of all current or future branches guaranteed. Incidentally, there are hardly any problems with the data connection. Even countries with generally poor infrastructure ensure a good internet connection.

Other countries - other customs

Cultural differences often prove to be problematic. Because until the corporate culture with all its Workflows between the locations gets rolling, software has been running for a long time. The different views on meeting deadlines, ideas of hierarchies and different ways of working do not make cooperation easy. No ERP system can help there either.
In the same way, communication problems are even more frequent than might be expected. English is not up to par everywhere. Not even in Germany. And in many Asian or South American countries, the level of English is very basic. In order to effectively organise the cooperation of different locations of a company here under these circumstances, good managers are needed.



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