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Every year, the Brazilian Tax Authority releases a number of new changes. In 2014, the changes are quite significant. Instead of once again just installing more patches and support notes for  current solutions and throwing more money at the same old problems, many multinationals are using the changes to re-evaluate their options.

Companies that are transitioning away from on-premise Nota Fiscal applications are reducing their annual support and maintenance costs by over 80% while increasing their end user productivity by 25%. With these types of gains to both the business and IT, looking at SAP Hybrid Cloud alternatives makes sense.  Especially when you consider that more changes are coming in 2015: eSocial SPED, MDFe, further mandates of the Destinatario process across states for invoices over 100,000 Reais.  You should not go through another maintenance “fire-drill” in Brazil before you look at your alternatives.

Below are the top 5 reasons companies are switching from on-premise solutions to SAP ERP Managed Service and Hybrid Cloud based solutions.

  • On-Premise NFe solutions have too many failure points and monitors when you consider there are SAP configuration requirements that hamper your SAP upgrade strategies, middleware issues that create road blocks and visibility black holes, and local boxes that are not synchronized with SAP acting as your system of record.  If you spent so much on SAP ERP, shouldn’t the ERP be the system of record and not the local box?

  • Day to Day support needs to be real-time: Most on-premise solutions have their operations shut down for days to weeks every year because of support challenges

    • When the Nota Fiscal doesn’t print out at the warehouse or at your logistics providers, who do you call? Companies with on-premise deployments are forced to go on “search and rescue” missions while they figure out if the problem is in their ERP, the eInvoice solution, the middleware or the communications. And during this process, the truck sits at the warehouse and their customers turn to other providers to receive their supplies.  .

  • No SAP system is configured the same – on-premise solutions force your SAP COE to alter their SAP global upgrade strategies every time there is a change.

    • 80% of the costs to maintain SAP in Brazil are due to one simple fact -- no SAP ERP system is configured the same. If you put 10 companies in the same industry in a room that all ran SAP – all would have major differences in their process designs and in the version they are running (some companies are still 4.7). This is the power of SAP – the ability to use industry best practices but also configure them to meet your internal needs and your customer requirements.  And many companies are moving to a single instance or at minimum regional instances of SAP ERP via consolidation projects.  Brazil support issues become global SAP support issues.

  • Change management involves too many people, different groups, different system developers

    • Did you realize you are staffing SD, MM, FICO Analysts, Business Users, Middleware Architects, Subject Matter Experts, ABAP developers just to maintain compliance? Yes, just maintenance – no business innovation – just maintenance.

  • Lack of coverage and functional capability

    • Brazil has many integration issues (Goods at the State level, Services at the city level, CTe, MDFe, eSocial, SPED reports) and by the way in 2014 Chile has similar e-invoicing mandates along with Argentina, Mexico, et al…Latin America requires a regional solution, not a country specific solution.

So as you move into the summer months and project plans are solidified, what will your organization do? Are you going to slap on another Band-Aid or are you going to take this opportunity to make strategic improvements to your Brazil infrastructure?

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