DEPLOYING NETSUITE IN CHINA PART 1: WHY CHINA IS DIFFERENT

2021-04-20

If you are implementing a global NetSuite solution and have a strategic presence in China, the successful rollout of NetSuite in China will be of critical importance to your global business operations. The purpose of this article series is to share best practices with NetSuite users planning a rollout for their China subsidiaries, based on the successful strategies adopted by NetSuite users we have worked with in China over the years.

Growing a business in China presents a unique combination of challenges to companies that is arguably not found in any other region. These include:

1. a complex regulatory and tax environment,
2. a self sufficient ecosystem of software and internet applications that are quite distinct from those used in other global regions, and
3. a formidable language barrier, particularly for foreign companies trying to get to grips with tax and legal issues.

Above all else, companies with a strategic commitment to China typically try to scale their operations aggressively in China to take full advantage of business opportunities in each of China’s vast regions, leading to high pressure to achieve rapid growth in a short time.

All of these factors not only present challenges to growing in China; they can also put significant pressure on the rollout of NetSuite for your China subsidiary. To help companies meet and overcome these challenges, Trigger Networks has compiled a comprehensive set of the most effective strategies and best practices that our customers have adopted achieve the successful rollout of NetSuite for their business operations in China. 

CHINA'S UNIQUE BUSINESS ENVIRONMENT

The diagram above, while admittedly not absolutely scientific, still illustrates the combination of challenges presented by China ERP rollouts compared with other regions.

In practice, the uniqueness of China's business environment means that if you are rolling out NetSuite for China, you will need to be aware of the following major issues:

1. Ensuring tax reports generated by NetSuite are compliant with China GAAP regulations and are easy to produce
2. Managing data transfer between NetSuite and China’s “Golden Tax” VAT Invoice generation systems to ease workloads and achieve better control and compliance
3. Managing the transition from commonly used local accounting systems in China (Yonyou and Kingdee) to NetSuite.
4. Challenges commonly faced during NetSuite implementations in China, including:

• The barriers to user adoption due to unique software and usage habits in China
• The impact of rapid business expansion on your China team’s workload during implementation
• The effect of high staff turnover on the rollout of NetSuite in China

Furthermore, in our experience, NetSuite user companies in China have been able to smoothen the implementation process by adopting the following practices:

1. Educate the China team on the vision behind the NetSuite implementation project
2. At the beginning of a global implementation, involve the China team as early as possible during the global requirements building stage
3. Broaden the project team and involve more China staff during the system building stage for China
4. Review system blueprints with the China team (repeatedly if necessary) to ensure a full understanding of requirements
5. Leverage the NetSuite implementation as a personal development opportunity for your China staff
6. Work with a world class NetSuite partner with an experienced bilingual team based in Mainland China

In the following entries in this series, we will explain these approaches in greater depth, and share more detail about each of the ways in which financials need to be localized for China. Stay tuned for more!

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