Global IT systems sound so appealing, at least to headquarters staff. But don't fool yourself; the benefits of standardization will always run up against the arcane needs of far-flung field locations. Most obviously, there's the need to support multiple languages, alphabets and currencies, not to mention local data in formats that differ from headquarters' systems. But that's just scratching the surface of the constraints you can encounter. Consider these, for example:
• Taxes. Some countries impose punitive import duties or sales taxes on hardware and software, making systems shipped from the home office much more expensive than local options.
• Accounting rules. Local regulations vary widely. For example, French financial records must be maintained in French and use an account numbering structure defined by France's Comite de la Reglementation Comptable. The generally accepted accounting principles (GAAP) of the U.S. are different from India's; profits calculated under U.S. GAAP are typically lower than those calculated using India's GAAP. Complicating this, India's GAAP is being updated to be more in line with International Financial Reporting Standards.
• Data privacy. In general, European Union data privacy laws are more restrictive than U.S. laws. The EU Data Protection Directive (which is being superseded by the General Data Protection Regulation) requires notification when a person's data is collected, then places additional restrictions on access and protection of that data.
• Records retention. Requirements for how long accounting records must be retained vary widely. It's five years in Poland, six in Germany, seven in Austria and 10 in the Dubai International Financial Centre. Certain Indian states require hard copies with original signatures for certain records and do not accept electronic copies.
• Technology availability. Most large organizations establish global hardware, software and cloud standards. But not every IT product is available in every country. Even when systems are available, adequate technical support may not exist. Moreover, different countries adopt new technology at different speeds. For example, some of the major Zambian banks still use Internet Explorer 7 or 8 and do not support IE10.
• Licensing. U.S., EU and Japanese organizations are careful to maintain properly licensed systems. Users in some other countries are more casual about licensing, arguing that they cannot afford licensing fees. Global organizations need to ensure that field operations are properly licensed.
• Skill levels. Basic IT proficiency varies widely, even within countries. India has excellent IT outsourcing firms with highly skilled employees. But on a recent trip there, I also saw administrative staffers who were using a computer for the first time. (One company had people who calculated sums by hand and then entered the results into a spreadsheet!)
If global enterprises ignore such constraints, local field offices may choose to operate two separate systems: one to comply with the home office's mandate, and one for day-to-day operations. Think of the waste, especially if duplicate data entry and system operations spin out of control. But you must distinguish between valid local constraints and frivolous requests. Accommodate the first and squash the second. In that way, you will bolster the field's opinion of HQ by being flexible but not foolish. •