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Author's profile photo Steve Sprague

SAP ERP and Brazil Nota Fiscal version 3.1– (Part 1 of 6) OnPremise NFe Solutions or Cloud and Managed Service:

Top 5 Reasons Why Companies are Using Brazil version 3.1 to Transition off of on-premise solutions to Managed Service and Cloud Solutions


Brazil came out with their latest changes in July 2013 – version 3.1 of the Nota Fiscal process.  And for the local and corporate SAP teams, this is the latest (and largest) challenge for maintaining compliance with the laws and legislation for electronic invoicing in Brazil.

The question in front of IT and Finance executives now:

Will you look at this latest change as an opportunity to improve your business processes and reduce your on-going support costs or will you continue to throw money and resources at on-premise solutions.  Now is the time to compare your internal costs to solutions that take advantage of Latin America electronic invoicing in the cloud. Now is the time to compare on-premise installations with managed service based  and cloud solutions that can reduce your overall support costs and more importantly transition constant and costly projects into a fixed predictable cost.

We will explore each of these five reasons in detail over the coming weeks, but below are the key reasons companies are switching from on-premise solutions to SAP ERP Managed Service and cloud based solutions.

  • On-Premise NFe solutions have too many failure points and monitors
    • There are multiple components to the solutions and each has the opportunity to be a failure point. When something breaks where do you look?
  • 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 Mexico has similar e-invoicing mandates along with Argentina, Chile, et al…Latin America requires a regional solution, not a country specific solution.

Companies that are turning away from on-premise solutions and replacing them with native SAP ERP extensions and managed services are:

  • Reducing their SAP ERP support costs in Latin America by upwards of 70-80%
  • Increasing the productivity of their line of business users by 25-40%

With the scale of the changes in Brazil, I encourage you to use the upgrade as an opportunity to re-evaluate your solution direction for e-invoicing in Brazil as well as across Latin America.

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