What Is a Global ERP, and When Do You Need One?

Enterprise resource planning (ERP) systems help businesses gain more insight and take control over their data. They’re an increasingly crucial tool today, and they come in many forms. One of the most important types for larger organizations to know about is global ERP.

What Is a Global ERP?

A global ERP solution streamlines and standardizes operations across all the different parts of a multinational organization. U.S. multinationals employ 43.9 million people and account for $5.7 trillion in economic value. Given that size and influence, ensuring you’re getting all you can from your staff, workflows and other resources is crucial.

Global ERPs provide the visibility and efficiency companies need to do just that. They offer a single place to view all of your data, have budgeting features, integrate once separate applications, offer analytic capabilities and automate routine tasks like data entry. Some solutions also include features like customer relationship management (CRM), supply chain management and HR tools.

How Is a Global ERP Different from Other ERPs?

If you’re familiar with ERP software, you’ll notice a lot of overlap between those features and any other kind of ERP system. The key difference between a global ERP system and a more conventional ERP is its scale. As their name implies, global solutions apply these features to a worldwide scale, which means including some functionality a company in just one country doesn’t need.

Global ERPs can support multiple languages and currencies to let teams in different countries use the same system to streamline their operations. Similarly, their accounting and tax features can support varying regulations and tax codes to comply with differing laws.

As more companies shift to remote work to take advantage of remote workers’ higher productivity and overcome local labor shortages, more will look internationally for help. That trend makes these features all the more valuable. 

When Should Businesses Use a Global ERP?

Because of their larger scale and extra functionality, global ERP solutions can be more expensive to implement than their conventional counterparts. So when should you use one? Here’s when it makes the most sense for businesses to use a global ERP.

When They Operate in Multiple Countries

The biggest telltale sign that you should use a global ERP is if your organization has operations in multiple countries. Laws and taxes vary from nation to nation, so your ERP has to be able to account for these differences for it to be of any use to a multinational company.

It’s important to recognize that just because a business has no physical presence in another country doesn’t mean it’s unaffected by these differences. China’s Personal Information Protection Law (PIPL) applies to companies outside China if they use Chinese data centers or collect data on Chinese citizens. Laws in some other countries have similar consequences. Similarly, if you sell items online to customers in a different nation, you may have to comply with their tax codes.

Any significant sales, data center operations or other connections to other countries could warrant a global ERP. Businesses should review where they stand with these concerns to see if it’s right for them.

When They Use Multiple ERP Systems

Another sign that you may need a global ERP solution is if you use multiple separate ERP systems. Businesses with several locations or branches, even if they operate in just one country, may use different ERPs between offices. 

That disconnect can make it hard to get an overall picture of your whole business, so it’s better to move to a bigger system. Just as a hybrid cloud can lower costs and improve scalability over multiple disjointed storage environments, a single global ERP is more cost-effective than many smaller solutions.

When They Struggle With Manual Processes

Finally, if your teams frequently encounter issues with manual processes, you may need a global ERP. Accounting and taxes are the biggest areas to look at here, as they’re often time-consuming and ERP solutions can automate them. Any errors or time sinks when dealing with multiple currencies or tax codes, in particular, are signs you need a global solution.

Global ERPs Can Be Helpful Tools

Once you know what a global ERP is and what it can do for your organization, you can find the right software solution for your needs. While not every business may need a global enterprise resource planning system, it’s a helpful tool for many companies.