Challenges of Running an On-Premise Compliance Solution in Brazil

Scott Lewin
April 12, 2013

There is a definite trend for companies using SAP to move away from in-house software solutions because of the maintenance difficulties imposed by the changing legislation in Brazil.

Many companies looked at Brazil Nota Fiscal over the past few years as just another invoice process and compliance solution that could be managed in-house. However, as more organization move business processes into shared services and look to consolidate on single instances or regional instances of their SAP, they are finding that the true cost of ownership is extremely high. Below are the two most common themes I see when speaking with customers looking to move away from an in-house Nota Fiscal solution:

  • Organizations have grown through acquisitions in Latin America, especially in Brazil over the past 5 years. Many of the companies that were acquired also ran SAP, but companies found themselves supporting multiple instances. As the IT team took on consolidation, they often realized that moving Brazil into a shared instance immediately opened their eyes to the real support costs of Nota Fiscal. It was not the XML schema or the web service connection – the real cost was due to the amount of changes coming from the government and the effect these changes had on SAP configurations. Rather than maintaining multiple FTE to research the changes, research how they should be implemented inside of SAP, and manage the constant flow of SAP upgrades; organizations have been turning to providers that eliminate this in-house problem. They have been turning to managed services that monitor the changes, understand how to implement them in SAP, and guarantee ongoing compliance of the SAP system and process under a fixed annual fee.
  • Another reason organizations are moving away from in-house solutions is the regional expansion of compulsory electronic invoicing throughout Latin America. Most on premise software implementations only handle one country, leaving a global SAP team to manage multiple vendors in multiple countries. Supporting multiple FTEs for day to day support, multiple boxes, multiple integration brokers, and a multitude of country specific solutions adds up to hundreds of thousands of dollars when viewed in the aggregate. A regional approach not only frees up IT budgets, a regional approach also frees up needed IT resources. It is much more beneficial to have resources working on new value added projects rather than maintenance of a country process.

More simply stated: companies are moving to managed services for Nota Fiscal because of the out of control cost to service the in-house software day to day and more importantly manage the ongoing changes that happen every year. Before you make a decision, make sure you talk with companies who have lived through the painful days of an in-house solution (including lines of trucks sitting at their loading docks waiting for documents and multiple days of not being able to ship because their Nota Fiscal solution was broken) and are now singing the praises of the cloud solution. FYI – let me know if you need help finding one of these references…there are plenty!!!

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Scott Lewin

Gain timely insight and important up to the minute information about the current legislative changes in Latin America, including Brazil Nota Fiscal, Mexico CFDI, Argentina AFIP and Chile DTE. Learn how these changes affect your operations, your finances and also your Information Technology teams.
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