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Brazil Nota Fiscal 2014 – If you answer yes, then you have the wrong upgrade strategy

In previous articles, we discussed why on-premise applications do not make sense anymore in Latin America – because they offered no economies of scale.  Why would you try to be an expert on e-invoicing compliance in Latin America? Don’t you rely on tax experts and consultants to keep up with the changes? Why then would you try to figure out how your IT systems need to be configured to stay compliant when you can pay a simple annual fee to set it and forget it.

If you answer yes to these questions, then shouldn’t you be looking at an alternative solution?

  • Are we forced to install SAP OSS notes in order to comply with 3.1 upgrades, which causes disruption to the global COE?
  • Do we have to pull resources off of previously scheduled projects to put out the fires every time Brazil makes a change?
  • Are we having to regression test ECC due to all the SAP OSS note requirements that Brazil requbraires?
  • Do we have three separate projects to implement with three separate teams (SAP upgrade, Middleware Upgrade, NFe solution upgrade?
  • Is our upgrade project schedule to take more than 10 days?
  • Do we have to hire a systems integrator every time there is a change because we don’t have any subject matter experts?

The Hybrid Cloud Architecture is the only solution option that answers “no” to all the above questions.  Users of Hybrid Cloud Nota Fiscal solutions have the following competitive advantages over their competition:

  • Eliminates SAP ERP change management and day to day support issues
  • Eliminates the IT staff from having to react to constant changes in legislation
  • Allows for on premise contingency
  • Takes advantage of economies of scale
  • Provides the benefit of the managed service support so you have help when something goes wrong
  • And when you add it all up, the Hybrid Cloud model lowers the total cost of maintaining SAP in throughout Latin America.

Alexandre Quinze, CIO of Philips recently interviewed: Although the company already had an integrated Nota Fiscal solution with their ERP in its operations, Quinze explains that the required upgrade to the NF-e module triggered the decision to analyze alternatives offered by the market at that time. “Our decision came down to upgrading the SAP GRC Nota Fiscal solution to issue electronic invoices (NF-e) and keep the entire infrastructure and annual maintenance or select an alternative solution based on Software as a Service (SaaS),” he says.

  • “We had an 80% reduction in our costs from deploying the SaaS solution. We pay the SaaS fees, and all the infrastructure is provided by our provider “summarizes Quinze.
  • By transitioning to the SaaS solution, Philips achieved a 25% increase in productivity among employees across all the business units of the Brazilian multinational.
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    • SAP is looking at moving this direction; however, there are other solutions from SAP partners on the market that provide this benefit directly as an SAP ABAP extension.  Companies in my opinion from working in this market for the past 10 years should look at solutions that allow them to buffer their global templates from constant change. I do think you will see more SAP partners provide Hybrid Cloud solutions that include economies of scale of cloud solutions combined with native ECC ABAP components that buffer SAP core. Cisco calls this “Fog Computing” and when you look at compliance especially with gov’t mandates — I think this will be the future trend.

  • Hi Steve,

    My assumption is that Hybrid is dependent on ERP for the source data of the Nota Fiscal. Consequence is that ERP must be extended if additional data is required by the tax authorities. This means installation of Notes, because only with the Notes installed, Hybrid can be compliant.
    Best Regards,


    • Hell Aalbert,

      The assumption that the SAP ERP system is the system of record and source of data is correct, but the assumption you need to apply OSS notes to accomplish this is incorrect.  A true hybrid offering provides both an ABAP engine and the cloud connectivity. The ABAP engine and extension provide both for a monitor inside of SAP as well as a core extractor. This core extractor can be configured with a Delta file approach – think about companies that are still 4.6c – how would they maintain compliance with Brazil 3.1. So the key to hybrid is to offer this cloud and ABAP engine to absorb the buffers. This way a company can maintain compliance for a local country issue without having to affect the corporate template — another example is Argentina.  You don’t want to post the accounting document in SAP until  you have the final approvals, but most companies who run a global template don’t want to change how and when they post to the accounting tables. This type of ABAP engine can absorb these issues and buffer core.

      A true hybrid approach, alleviates the mandatory updates on the COE, allows them to flexibly apply OSS notes on their schedule not gov’t mandates, allows the end user to have an SAP experience, and provides for both the maintenance and monitoring of the end to end solution.