For the next installment on my series on: SAP Hybrid Cloud Proves Successful for Latin America E-Invoicing Compliance, I wanted to cover why you can’t rely solely on a pure managed service provider or 100% cloud provider for e-invoicing in Latin America. It is really important to understand there are 3 functional requirements to Latin America compliance. And 100% cloud or EDI Value Added Networks only cover the last component – Government connectivity.

You need to be aware of the ERP upgrade requirements, the process orchestration (i.e. signing, PDF creation, turn around attributes, extended data elements) even before you worry about the connectivity to the government.  After all, the ERP and process orchestration requirements create 80% of the cost components when implementing, monitoring, or maintaining compliance in Latin America.

 

Traditional Managed Service, EDI VANs, e-invoicing networks, and signing providers fail to provide an end to end service: Some companies turned to 100% pure cloud providers, but they found these EDI type VANs were not the best answer in the long run for two reasons:

  • Customized ERP creates support and maintenance issues
    • SAP – no two SAP systems are the same and getting an SAP system to work with the cloud provider’s standards is 80% of the implementation and change management headache.  While the government requirement is standardized – connecting a company to the government system is not.  Non-standard integration scenarios stem from companies having their own internal processes and more importantly end customer requests. Cloud and EDI providers typically run from non-standardization and force the ERP extraction portion of the implementation and maintenance to the end user.  So in the end, what value was really provided?  And yes, you just created a monitoring issue, a support situation where people will point fingers at each other for a failed invoice, and a change management and testing nightmare as you now have two parties involved.
  • Shipping is Affected
    • In Brazil, if you don’t have your signed DANFe on the truck, you can’t ship.  If you rely on a 100% cloud provider and the network is down, your internet is down – you can’t ship.  Brazil offers a model called “Contingency” whereby you can print a special piece of paper and as long as you have power to your printer, you can still ship. Solutions will then automatically reconcile those nota fiscals when the network comes back online.  A 100% cloud solution cannot provide on premise contingency.

So the Hybrid Architecture is the strategy winning the day, and in our next article we will explore why in more detail.