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Multi-company management in ERP systems: the myth and the reality

By Jean-Baptiste Sachot, 10:00 AM on September 7, 2016

Choosing an ERP is a crucial exercise for any company. It will be the axis around which all the company's activities revolve. So, for groups with subsidiaries, the search is bound to be for so-called "multi-company" ERP systems. However, behind this name lurk very different realities that may complicate rather than facilitate the work of employees.


When "multi-company" equals multiplication of data...


Beware, because the term "multi-company" used to describe an ERP can be generic, it doesn't tell you anything about how those companies are organised within the ERP. What then happens is that you find that the management of multiple entities amounts to grouping them in the same software package but with their data compartmentalised in different databases. Alternatively, the information is centralised but access security prevents users from moving freely from one company to another. Although this may not affect most employees who actually work for a single company, these obstacles are critical, particularly for financial and IT services. You can just picture the amount of time wasted in creating multiple profiles for every accountant or each member of the hotline! Not to mention the inter-company accounting records that will need to be moved between multiple environments...

Duplication, duplication and more duplication!

Logically, the advantage of a software package that incorporates multi-company management, is also that it pools essential data, such as the client database, supplier database and the catalogue of services or products. Once again, beware! Depending on the ERP chosen, the features which are so essential to you may not be available. In this case, imagine how much less efficient the CRM module would be if every client were duplicated in each subsidiary. Calculating turnover by product on a group level would then become a real paper chase.

You can expect to have to reissue Excel files and Access databases to consolidate all the data.


Employees, subcontractors or both simultaneously?


In a group of companies, it is common for employees to occasionally work for a company other than their own. A multi-company ERP should facilitate the management of staff secondments by the generation of inter-company invoices and the production of management reports. However, compartmentalisation often remains the rule, even though, in reality, employees of one company are seconded to another. Then all you have to do is identify the employees concerned and create them as subcontractors (for example) for other subsidiaries. You must forget about automatic invoicing of inter-company subcontracting and prepare summary statements of these movements yourself.




You had "integration" in mind, but the reality is actually complications!

Fortunately, there are ERP systems for which multi-company is synonymous with unique databases, pooling of reference sources and facilitated management of inter-company subcontracting - and we can help if you are a service company with this particular need.


If you are interested in good management practices in your companies, feel free to download our ebook:

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