There are many reasons for a software firm to decide to go global, including saturation in their primary market, access to new labor pools or raw materials, or just to diversify into different markets. There are also multiple risks associated with expanding internationally including increased expenses, foreign regulations and rules, and operational complexity. However, there is a way for companies interested in expansion to mitigate or reduce the associated risks, and to create additional opportunities to build global synergies and business improvements. To gain these opportunities and reduce the risks, firms need to implement professional services management software.

There are many Challenges Associated with International Expansion

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Business Challenges of International Expansion

International expansion is not for the faint of heart. One of the major difficulties is standardizing metrics. Firms in the United States tend to focus on key metrics like client retention, the number of customer recommendations that occurred in a month, and performance metrics like margin and utilization rate. However, the European and Asian business markets are different. Firms there may not track the same metrics as the US, but instead, focus on hourly rate per consultant and share of the client spend. The discrepancy in key metrics creates difficulty for home managers to track the business indicators they want at the subsidiary.

Another difficulty international firm’s face is accounting by spreadsheet. The home operation and the international location do not have the same accounting system. To make the two compatible, financials are exported by one group, manipulated by accountants, and then uploaded into the other system. Managing financial accounting by spreadsheet causes delays in the timely reporting of financial information to Senior Management.

Accounting by Spreadsheet is not the Answer

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The final difficulty of international expansion is the lack of standardized business processes. This can result in different ways to capture time and expense, billable hours, and even recognizing revenue. Unless these are standardized across the entire company, it is difficult to obtain comparables between the different subsidiaries.

Benefits of Professional Services Management Software

International firms struggle with these challenges every day. The best way to fix or navigate these problems is to implement professional services management software.

Professional services management software provides a number of advantages to international firms. First, it places every company on a single centralized database. Next, it requires data to be input in a defined way. Last, it provides a reporting package for both Senior and Local Management to use.

The various parts of professional services management software work together to solve the previously mentioned problems. They create standard methods of input so employees enter their time and expense the same way. They create rules, so that revenue is recognized according to established rules managed by the Corporate Finance team. They also allow managers to run different reports against the database. Now local management can view what they believe to be important and Senior Management can run an entirely different set of reports.

As a Professional Services Management Software, NetSuite can help Companies Expand

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There are many challenges with expanding internationally. However, firms that use a professional services management software like NetSuite will be more successful in managing the expansion. If you would like to know how NetSuite can solve some of your international challenges, please contact us. [subscribe2]