Localization in Global, Dynamics AX,365 Finance and Operations, Implementations

With Dynamics AX 2012 advent in 2011, Microsoft took a leap in making an implementation dream come true; One true single instance with multiple companies with multiple countries in them. Microsoft introduced the feature that we know now today, which enables the local/legal features for a company based on the country on the primary address of that company. So in all practicality, you could have multiple companies belonging to different countries in one instance, without each of them hindering with the other. This is an immensely flexible feature that organizations do not need to buy multiple instances just due to the reason to have different localizations for different region/country.

In one of the implementations that I worked previously on, had implementations across the globe, including in countries but not restricted to France, UK, Australia, USA, Philippines, Singapore and etc., Each of them had their own requirements and we were able to resolve all of them with what out of the box Dynamics AX 2012 had offered. Honestly speaking most of them were straight fits, with minor workarounds etc. However, no implementation is a smooth sailing ship and strictly speaking ships are not meant to be sailing smoothly in a sea either. Although most of the localizations provided are mostly fit in Dynamics AX/365 for Finance and Operations, there are challenges in the implementation of the organizations wanting to have a unified global process in terms of day to day activities. This is a huge benefit for the implementation partners and consultants, as it becomes like a template based rollout leveraging the features developed/configured for one region and rolling them out in different countries. And with Dynamics 365 Finance and Operations there is an additional feature that is launched where you can use other country’s localizations with another country. I have mentioned about that in the blog post here: https://wordpress.com/post/vamsipraneethdaxblog.wordpress.com/604

However, the biggest challenge that an implementation of such kind will face is the same prime need of unified global process across all the business functions. Enforcing a strict unified global process could back fire in situations where there is a legal/tax requirement. Eventually focusing so much on the unified process, could backfire and eventually would turn into a product inadequacy. For example, while we were doing a Dynamics AX 2012 implementation, there is a legal reporting requirement in France to have all the financial reports to be generated with the account names in french. However, since the unified global process was enforced, all the reports in the management reporter were configured in English, which backfired in the first month closing where the auditors have question the ability of generating reports in french. This caused a lot of re-work, and designing/configuring the french reports.

Also enforcing an unified process also has other pitfalls, like a lot of manual work. For example Philippines has a requirement to calculate the withholding tax during the invoicing process itself. However, due to lack of clear understanding of the regulations and strictly enforcing an unified process, creates a lot of manual work, as standard process is always to deduct the withholding tax during the payments. This could be easily handled via a simple configuration, however in depth understanding of the legal requirements is crucial.

In total, while Dynamics AX/365 Finance and operations offers a lot of localized features, it is important to have a clear understanding about implications of not implementing the localized features. If those are of not big implication and if the effort to configure/customize/test is high, these can be avoided. However if the implication (legally) is high, the recommendation is to put in that extra effort during the implementation itself to implement that localized feature. And while it is impossible to foresee all the localizations for all the countries wherever you’d be implementing, all the scenarios should be tested with all the localization requirements and make sure that all the requirements are being met.

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