Brazil NFe v3.1 - Part 2 of 6 - Onpremise versus Cloud

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

In the second part of this series on using the Brazil Nota Fiscal version 3.1 changes to evaluate the strengths of cloud and managed services over on-premise solutions. I wanted to discuss the concept of failure points in the traditional NFe architecture.

Before I jump into the example, it is important to understand the traditional architecture that has been implemented.   This usually wasn't implemented by design, it was implemented for three specific IT realities:

• Corporate IT desired to centralize all financial processes on a common ERP platform and replace local ERP solutions for consistency and controls.
• Because many multinationals acquired companies in Brazil to grow – there were legacy systems already in place. When the ERP transition came into play – the standard operating procedure was to integrate the existing local system. This created an integration project that was often outsourced to local consultants.
• A common ERP maintenance strategy is known as (N-1), this means that you stay one support pack back from the latest release. And often multinationals are many service packs back because applying OSS notes to a highly customized and configured and global ERP system has its issues.

Combine all of that together and you get the following – three distinct silos of support and change management.  Apply Day to Day support and constant Change Management to this infrastructure and you can see why many companies are looking to Managed Service providers to completely take this problem off of their list of things to manage going forward. Why try to manage something individually that is the same across all companies – cloud and managed service providers provide expertise, lessons learned and economies of scale.

The Problem with On-Premise approaches – three or more failure points with the architecture that more often than not each have their own support teams.  When the problem can occur in any functional area, and issue becomes a “search and rescue” mission. 

Day to Day support – Who do you to call to fix an invoice issues?

• The ERP support team
• The middleware support team or the 3rd party system integrator that built the connector
• The local einvoicing solution support

If you can’t fix, shipping is delayed or worse shut down. Many companies experience shut downs for 3-7 days a year when on-premise solutions stop working due to technical issues or government changes.

When you consider the issues and the overall cost to support three components, you can see why companies are looking to use the Brazil NFe version 3.1 upgrade to consider managed service providers that implement, monitor and maintain all three components as a complete end to end solution.  When you consider that there are three likely phone calls:

• The local warehouse is calling because the DANFe is not showing up on the printer and they cannot ship
• The local IT staff is calling the ERP COE as there is something wrong within the ERP system or the middleware and nothing is working
• Or the data is not correct and there is something they are having difficulty reconciling during the closing of the books – the local finance team needs to ensure that what is posted in ERP and what is provided in the SPED reports is accurate.  The penalties are too large to get this step wrong.

With the operational and audit issues at hand, wouldn’t it be nice to pick up the phone and call one expert, rather than going on “search & rescue” missions to find and fix the problem every time there is an error.