Do world-scale ERP solutions suit Iran?

Do world-scale ERP solutions suit Iran?

When managers and business owners think about ERP, one of their key challenges is answering this question: do world-scale ERPs suit Iran? (By “world-scale ERPs” we mean those ERP solutions which are designed and provided by foreign companies.) It shows that our managers and business owners’ mind is on change which is a very natural and right, though subconscious, phenomenon. The truth is that other countries, particularly those in the region, have passed the same route, i.e. in the beginning they thought that since their work and trade culture is different, they couldn’t take advantage of world-scale ERPs. But after 3 or 4 years, this viewpoint gradually started to change, and now they are stepping towards world-scale ERPs in world scales.



An example from Pakistan

According to a Pakistani ERP implementation consultant who had cooperated in more than 14 successful projects in different Middle Eastern countries, managers as well as industry and business owners in Pakistan also were facing the same challenge before 2003.

They thought that Pakistan needed a national or domestic ERP because their different financial and tax system required them to insert day-to-day records in their accounting books and deliver them to the officials. Also, they thought that since their companies were not mature enough to perform exact business processes, they couldn’t use world-scale ERP solutions. But in practice, managers and business owners gradually changed their mind, and from 2003 on, companies and organizations found that world-scale ERPs could improve and accelerate their business success.




Where is the difference, and how important is it?

Since most of the world-scale ERP providers, particularly Microsoft, are present in many countries, and are familiar with different cultures, they have made essential anticipations in their ERP solutions. In fact, customers’ needs have been covered in the structure of these products. Hence, many forms, tables, and fields change according to each particular country or region. But, it has to be noticed that when it comes to Iran, the only main difference relates to financial and tax laws and rules. The reason of the differences and the amount of their effectiveness will be discussed in the next paragraph. But, taking advantage of world-scale “best practices” helps organizations to advance and improve their other business processes such as supply chain management (SCM), sales and marketing, project planning and management, production planning and management, warehouse management, human resource management, service management, etc. Obviously, these “best practices” in world-scale ERP software are accessible to all users, and they have been optimized according to the experiences of thousands of companies all around the world.


Iranian companies’ needs to world-scale ERP software in finance and accounting

We know that financial and accounting system is the core of and ERP system. Any activity anywhere within the organization which has a financial effect should be accurately recorded in financial accounts and they must be controllable. More importantly, their reports should be instantly accessible to all the related managers. From the other hand, companies legally registered in Iran should be responsive to the Ministry of Economic Affairs and Finance. Some of Iranian laws about tax system have not been changed since 1932 and, for example, based on these laws all the account books should be written every day and previous books should be stamped, signed and sealed before any accounting document being registered.

Although accounting standards in Iran are copied from international accounting standards, naturally there are some differences as well. World-scale ERP systems have the necessary flexibility to fulfill the needs of Iranian companies and organizations. By creating some special kind of reporting system for finance and tax, our needs would be fulfilled. Currently, Iranian Ministry of Economic Affairs and Finance accepts world-scale ERP software like Dynamics AX, SAP, and IFS as the official software of numerous companies and already receives their report.




Organizational resistance; the source of a misperception

Being against the use of world-scale ERP software in Iran has just one reason: organizational resistance. Sometimes, human beings naturally resist any change in different aspects of their life including methods and habit they already use.

To survive in the competing market and succeed their objectives, organizations cannot sacrifice their goals for temporary resistance. For this reason, they consider implementing world-scale ERPs. There are so many methods to manage organizational resistance. In such cases, world-scale ERP consultants help the companies which are on the way to ERP.  Middle-level managers and employees of knowledge-based sections agree the deployment of ERP. They feel proud of working in an organization which uses a world-scale ERP. They know that in this way, they experience working with a system which is simultaneously in use by thousands of successful companies all around the world. Also, as these employees keep implementing ERP in their organization, they notice the inefficiency of the old methods they were using for years. And organizational resistance also starts at this point.

Sometimes, some managers and employees, create personally-ruled information or decision-making territory to increase the neediness and dependency of their organization to themselves. By implementing ERP, these dependencies and personal territories will cease because the organization will be process-oriented rather than being person-oriented.

Therefore, the opponents’ easiest excuse to resist change, is saying words like “this ERP system has been designed for foreign countries, not for Iran.” These words may make the chief managers also doubt the usefulness of ERP.

So, to prevent such doubts to occur, in the primary stages of choosing an ERP, all the chief managers should be informed of these differences and conflicts

It may sound ridiculous, but when implementing ERP, it’s no surprise to hear phrases like these: “this system is suitable for the United States or Europe, not for us”, “We are a third-world country, this system won’t work”, “I won’t trust it unless I see the signed paper”, “we cannot accept its responsibility”.

It could be a good benchmark and opportunity for chief managers and business owners to identify employees who take their own benefits or preferences prior to the benefits of their organization. Then, the chief managers can rectify this advent attitude.


Organizational resistance is temporary

Organizational resistance often shows up in the implementation stage of ERP. In fact, when parallel systems start to fade out, disagreements within the organization culminates but after that, decreases gradually. Sometimes when the implementation team wants to apply some optional process optimizations, faces resistance. But after deploying the system, those who used to resist, demand the same optimizations probably with a different tone. For example, they ask if it is possible to see a particular report on the system. The response they get is that it is possible to do so if they do the process based on “best practice”. And at this point, the system gradually proves its value and importance for the executive body of the organization.


Support services

The lack of legal and compelling supports is one of the main worries among Iranian managers who approach world-scale ERPs. When it comes to SAP and IFS software, there are some companies that support their customers after implementing ERP for them. Considering the release of Microsoft’s next generation ERP in Iran, a big and creditable domestic IT company which has made connection with one of Microsoft’s regional gold partners, provides ERP consultancy, and implementation and support services. Such an approach, fully wipes out managers’ worries about high costs and support services of world-scale ERP products.

Finally, the good news for managers and business owners is that they can easily use world-scale ERPs, regardless of their business scale. This could result in more relief for their organization because deploying these systems will assure you that, there would be no lack about the system requirements essential for the development of your organization either now or in the future. Also, there is no need to fund R&D for optimizing work processes because by using world-scale ERP, you bring world-scale experiences into your organization.