Top 5 Reasons Why Companies are Using Brazil version 3.1 to Transition off of on-premise solutions
Many on-premise solutions do not have the capability of supporting the full spectrum of Latin America requirements. As examples:
Country Coverage is often limited
- On-premise solutions that focus on Brazil Nota Fiscal and SPED do not support Mexico, Chile and Argentina. This forces multinationals to have four different solution providers, one per country. And it forces, four different integration points, four different servers, and four different support points and four different upgrade projects to coordinate when the government change.
- Cloud providers have the ability to offer multiple countries on a single platform. With the economies of scale, on maintenance, support, hardware, and change management, it makes sense to look at multi-country providers especially for those companies that run or are moving to a global instance of SAP ERP.
Many solutions don’t cover all of the processes
- On-premise solutions have functional gaps. For example, many don’t support Service invoices. Instead you have to build and maintain the government connections via a middleware. Many of these solutions only support PO-backed invoice for 3 Way Matching. And many of these solutions release the government updates too late. Remember it is still up to you to figure out how to implement and test all those new requirements.
- Cloud providers especially those with a Hybrid Cloud delivery model are able to support all requirements and often reduce internal support costs by upwards of 80 percent. The reason is simple – instead of paying maintenance to receive software, you pay a service fee that includes not only all the software, but also the implementation of those changes at no additional cost. More simply – with on-premise you pay maintenance to get the upgrades and pay consulting to implement them; with Cloud you pay one service fee and you get all the upgrades and installation at a fixed a predictable cost. I
The result for companies that continue to maintain on-premise deployments are rising support costs and rising change management costs. This is due to having to support too many individual solutions as well as these solutions having white spaces. Remember: White spaces equal cost and are either covered by your internal resources or your system integrator.
In an area of the world that is constantly changing, why would you try to be an expert on compliance? If you are running an on-premise solution this is exactly what you are doing—your team is trying to understand the legislation, trying to understand the SAP ERP requirements, trying to translate those to into process designs, implement, test, support and update every 6 months. Cloud providers bring the advantage of economies of scale and predictability in an environment of constant change. Companies that are turning away from on-premise solutions and replacing them with SAP Hybrid Cloud services are:
- Reducing their SAP ERP support costs in Latin America by upwards of 70-80%
- Increasing the productivity of their line of business users by 25-40%
With the scale of the changes in Brazil, Argentina, Chile and Mexico for 2014, I encourage you to use the upgrade as an opportunity to re-evaluate your solution direction for e-invoicing in Brazil as well as across Latin America.