Going global.

Faced with the challenges of expanding into foreign markets, many companies are searching for software solutions to help them cope with the difficulties inherent in their different overseas operations. Learn from the experiences of three of Canada's global, high-tech heavyweights about what to look for in a financial management software system to ensure that you're well equipped for the world of international finance.

According to Bill Fournier, senior analyst with Toronto-based Evans Research Group, the Canadian IT industry, including telecommunications products and services, accounts for between $70 and $80 billion in revenue. It's currently experiencing a single-digit growth rate per year.

Part and parcel of this dynamic IT industry are the young, entrepreneurial Canadian company start-ups that have gone on to garner great respect throughout the world. Many of these companies have attained almost instant success, as their operations are no longer restricted by international borders. But gaining worldwide respect as a contender in the global IT industry isn't without its share of hurdles. From a financial management perspective, it means dealing with complex tax laws and regulations that vary from country to country. It also means dealing with different languages and currencies. Having expertise in the IT arena doesn't necessarily mean that you're well equipped to operate within the complicated world of international finance. To succeed in a global marketplace, many Canadian corporations are relying on proven financial management packages specifically designed to deal with international operations.

Entrust: Trusting security software

In little more than four years, Entrust, Inc. went from being a $12 million US per-year company to a $148 US million company. The Ottawa-based Nortel spin-off was founded in 1996 and since then, has managed to corner the market on Internet security software.

"We have a large suite of software products -- both infrastructure and application -- that are primarily based on securing electronic transactions and communications over the Internet," explains Scott Gibson, director of finance and accounting for Entrust.

The company began with 100 employees. Today, there are more than 400 people in Ottawa and another 800 globally who have helped make "Entrust-Ready" synonymous with secure Internet transactions. With its base R&D operations located in Ottawa and its corporate headquarters in Dallas, Texas, Entrust has quickly expanded outside North America into such foreign markets as France, Germany and the United Kingdom. A special distributorship has also been set up in Japan to cover the Southeast Asian market.

As a start-up operation poised for rapid growth, one of Entrust's primary concerns was finding a financial management package that could "grow" with it and offer a great degree of flexibility.

"We needed a package that was scalable because we knew we were going to grow," explains Gibson. "We also needed something that offered multi-currency capabilities because we knew we were going to expand overseas and we needed something flexible enough to let us do that."

Upon completion of his investigation of financial management packages that offered these key features, as well as other important elements like global support and multilingual capabilities, Gibson found a system that met Entrust's criteria.

In mid-1999, Entrust reached a new point in its evolutionary stage. The company began seeking ways to increase the performance and speed of its financial management system for remote users. At the same time, the company wanted to integrate its order management system into the financial management package to help ease workflow. It was back to the research stage for Gibson.

"We did a lot of soul searching before deciding to do the upgrade," he explains.

The implementation was done in two weeks by trained staff from the software company, and the process was, as Gibson describes it, "painless." And today, Entrust's financial software package allows remote users to run transaction reports in a mere 40 seconds, compared to the 40 minutes it used to take.

"Multi-currency capabilities was one of the main issues that made us gravitate toward this package," says Gibson, who adds that the company works with many different currencies over a very short period of time. Other advantages that have allowed Entrust to manage its growth in a controlled fashion include scalability and flexibility.

Entrust is now conducting a system improvement process with their software vendor's consulting group to ensure it s using the software to its fullest potential internally. The company is also in the process of implementing a business intelligence tool, developed by the vendor, that will allow the organization to design reporting capabilities directly from the system.

Accelio: Delivering the "e" in "e-processes"

In the fast-paced world of business-to-business commerce, or "e-business," a few seconds can mean all the difference between getting or losing an order. For Ottawa-based Accelio Corporation, that difference translates into well over $100 million revenue.

Founded in 1982 as JetForm (and recently renamed Accello to better reflect its product offerings), Accelio has quickly evolved from a supplier of electronic forms and consulting services to a leading worldwide supplier of sophisticated e-process software, applications and frameworks. The company specializes in providing "e-processes" that use the Internet to efficiently, effectively and securely automate business processes to better serve customers, partners and employees.

What began as an Ottawa-based start-up operation soon exploded into an international corporation, with operations in Australia, France, Sweden, the United Kingdom, Germany, Ireland, Japan, China and Singapore. This explosion into the international arena didn't come without its share of growing pains, and in 1995, the company realized that it had outgrown its financial management package.

"The challenges of running a North American operation with international distribution was enough for us to begin looking for another package," says Jeff McMullen, chief financial officer of Accelio Corporation. "The one we were working with at the time was designed for a small business and not for a company operating in different countries."

Some of the key features that were important to Accelio included a scaleable solution that could grow with the company, as well as the capability to automatically integrate information from the international operations. Multi-currency and multilingual capabilities were also very high on the priority list.

"Operating in the international arena wasn't without its share of hurdles," comments McMullen. "We had to deal with new issues like converting different currencies, dealing in different languages, and even dealing with different IT plafforms and operations. We ended up investigating two different systems that we thought could help us in these matters."

Today, Accelio has operations in 11 countries and a global network of partners. "The most important factor when trying to minimize these barriers is to 'over-communicate,"' says Geoffrey Doty, a CMA with Accelio Corporation and systems engineer for the company's Canadian region. "While it may only be necessary to get a report on local operations from a peer down the hall, getting the same information from international operations requires more planning and tact. You have to work closely with the subsidiaries to ensure everyone is on the same page."

Accelio's financial software system has enabled them to efficiently manage workflow from operations located all across the globe. And earlier this year, they entered into a partnership agreement with a vendor to increase the worklow functionality of the software suite and to enhance data capture capabilities via the Web.

Cognicase: Making a case for value-added business solutions

One of Canada's largest IT companies is Montreal-based Cognicase. The company has a well-established record as a leading international provider of value-added business solutions and specialized software. Its three business units -- outsourcing and integration, electronic business solutions, and Web and wireless integration -- employ more than 4,000 people and have operations in 20 major cities spread across North America and Europe.

In 1995, the publicly listed Cognicase reported revenues of $2.9 US million. By 1998, that number had grown to US$59 and in 2000, it was $192 US million. Part of the escalating rise in revenues can be attributed to Cognicase's successful integration with more than 20 acquired companies. The move gave Cognicase the expertise and know-how to move forward in the international arena, but it also created some financial management dilemmas.

"Our existing system was just too small and we simply outgrew it," explains Mario Poirier, corporate controller at Cognicase. Some of the key features that Poirier was looking for in a financial management package included multi-currency and multilingual capabilities; this was particularly important given that Cognicase conducts a lot of transactions in different currencies and needed to be able to translate those currencies quickly and easily.

"We were growing so quickly and knew we were going to grow so much more," explains Poirier. "We knew we needed a flexible tool that could fulfill our needs rather than having us try to fulfill its." And with offices virtually "popping up" around the globe, Poirier had to be sure that their software vendor had offices -- and offered local customer support -- all around the world.

"Our first goal was to get a system that could consolidate all of the companies under our group," says Pokier. "After that, we looked at the issue of price."

Once it was established that the chosen vendor fulfilled these two key requirements, Poirier still needed to see the package up close. So, he checked out a real-life scenario by visiting an existing customer. "This was very important for us because it enabled us to see first-hand that the package could do what we wanted it to do," he explains.

According to Gerald Bourassa, a CMA and executive vice-president of Cognicase, part of the difficulty in being such a large company with offices around the globe is in keeping track of the financial accounting from each location. "We conduct financial transactions in different countries on a daily basis and need to consolidate all of that information at some point," he says. "Having a comprehensive system that is flexible enough to meet our demands while fulfilling our financial requirements is an essential tool for our organization."

Moving to a virtual shared service

Entrust, Accelio and Cognicase are examples of three leading Canadian IT companies that have chosen their financial management packages based on reasons as diverse as capability of integrating local currencies and languages to price and ease-of-use. Other factors that influenced their decisions were the flexibility and scalability of the product. Some organizations need a package to act as a stand-alone enterprise resource planning (ERP) in headquarters, but not in the international operations; others require a package that gives them the flexibility and in-depth reporting of an ERP, but they need it to work in conjunction with an existing ERP.

Today, there's a new financial management model called "shared services." The last few months have seen significant fluctuation in North American markets, and shared services, or centralized processing, offers the international business community an additional way to reduce costs and increase the efficiency of their financial operations. Shared services essentially allow businesses to create virtual shared-service centres. This enables them to process all financial data in one database through one server, or through multiple servers that use the Internet.

International businesses can take advantage of shared services to create a standard global chart of accounts, implement standard global processes, and offer centrally controlled procurement. All of these factors contribute to lower costs, which are achieved through: increased flexibility in training; interchangeability and knowledge-sharing; improved speed of implementation through replication; the fostering of centres of excellence; and the evolution of economies of scale.

Other advantages inherent in moving to a shared-services model include the immediate elimination of up-front costs (such as duplication of hardware, software and valuable IT resources), as well as diminishing reliance on individual specialists trained in the complex rules and regulations of the tax laws of different countries. And because the company's entire database is in one central location, the user gets an added degree of control -- one that affords him or her the opportunity to study entries an "granular" form if so chosen. This added control also means faster report generation. Worldwide closing can be reduced from as many as 25 working days down to five.

For those international companies looking to streamline their businesses through models like shared services, or for those simply looking for an answer to the complexities inherent in running international operations, one piece of advice is to make a comprehensive "wish list" of features before actually beginning the research process. Then, conduct a thorough investigation. And remember, "off-the-shelf' financial management packages may prove to have all the features you're looking for in a relatively inexpensive price range that falls within your budget.

Mark Wolfendate is the Americas CEO of Systems Union, Inc., an international developer of software solutions for accounting and business applications.