A medium-sized manufacturer of solar systems had previously sold its products and services abroad directly. The foreign subsidiaries only served as sales agents to initiate business. As this approach was associated with considerable tax risks, the foreign subsidiaries had to be put in a position at short notice to sell products and services in their own name, order from the parent company and regularly transmit financial figures to the group headquarters. As the parent company already had an SAP system, it was decided that the sales subsidiaries should also use SAP. This made sense in order to avoid system discontinuities, to be able to integrate the logistics chains between the group and the subsidiary and to be able to operate the system efficiently from the location in Germany. The interim manager was hired as SAP project manager to manage the large-scale IT project.
Workshops were set up and managed to determine the required processes and data
The first step was to clarify which business processes the foreign subsidiaries should adopt. It was also necessary to coordinate the pricing of products and services in the respective markets and between the subsidiaries and the Group headquarters. The logistics processes also had to be mapped. It was also necessary to identify how tax risks could be avoided.
In order to answer these questions, the interim manager first initiated workshops with the specialist departments and employees of the foreign subsidiaries. The workshops also served to recruit project members - and to define an initial rough project plan.
Business processes, master data and charts of accounts recorded and coordinated in detail
In the next phase, the interim manager and the team recorded and documented the business processes, master data and, where known, the legal requirements of the respective specialist departments in detail. The results were presented to the specialist departments as an integrated solution - and the respective approval was requested.
Customizing for the company codes in SAP then began. Based on this prototype, the foreign specialist departments and the Shared Service Center were trained on the new processes in SAP. After the successful training, the foreign subsidiaries worked through the test plans drawn up together with the interim manager and documented the test results. This often resulted in changes and new requirements, most of which related to country-specific requirements.
Complex cut-over plan - coordination with parallel CRM project
The cut-over was not trivial due to the sometimes different financial years between the parent company and subsidiaries and the sale of goods in the country or goods that were already in transit - and required a very detailed cut-over plan. During the hypercare phase, the SAP operations team in particular was required to support the new colleagues with problems and gradually relieve the project team of these tasks.
The particular challenges of this interim mandate included more than just a particularly tight timeframe. As a CRM project was running in parallel in the subsidiaries, there was a constant need for coordination in terms of timing, interfaces and resources.
Successfully set up company codes for companies in Italy, Australia and India
Three new SAP company codes were set up for each of the three subsidiaries in Italy, Australia and India, the respective master data was created accordingly, the required internal and external interfaces were set up, the required legacy data was transferred and the support organizations were trained so that the subsidiaries could sell their goods and services in their own name and correctly registered for tax purposes in the respective country. The original goal of the project was thus achieved and the client was very satisfied with the project result.
After the subsidiaries were able to operate independently in their markets with the new SAP implementation, many new nice-to-have requirements were placed on the project team. These had nothing to do with the actual issue of tax risk. The interim manager held these threads together and ensured the success of the project through stringent change management.
Developing authorization concepts in line with compliance rules
The different time zones of the subsidiary required a high degree of flexibility in terms of time for the project team and the Shared Service Center. As the subsidiaries tended to be small units, creating an authorization concept that took compliance rules into account was another particular challenge.
The greater involvement of the foreign subsidiaries resulted in a greater need for coordination at Group headquarters, especially in the Shared Service Center, and therefore a higher workload, which was not well received by all employees. Following the project, organizational changes will be necessary here. In addition, there are other subsidiaries with similar tax issues that should not be considered as part of the project for capacity and reorganization reasons. The client must therefore ensure that the SAP template created is further developed so that it can also be used for new company codes in the future.
