Implementing SAP in China comes with its own unique challenges and considerations. I was very fortunate to have had personal experience, as well as a team with experience, with end-to-end implementations going into this project. In this article, my emphasis will not be on the fundamental approaches to an overall SAP implementation, but rather on highlighting the specific areas that demand special attention and necessitate augmenting your overall plan. These insights will assist you in constructing a well-rounded strategy tailored to the unique requirements of the Chinese market.
1. Golden Tax Compliance:
China has strict tax reporting and financial regulations that need to be addressed in SAP deployments. Ensure that your SAP system aligns with Chinese tax regulations, accounting standards, and statutory reporting requirements.
One such requirement is compliance with China's Golden Tax regulation. To interface SAP with the Golden Tax system, a mapping between the golden tax fields and source ERP fields is required. SAP offers golden tax modules that assist in configuring this interface. While there are several approaches and varying requirements necessary for interfacing Golden tax, consider the following simple workflow example that used a third-party plug-in for Golden Tax:
1. SAP exports a text file in the designated format for the golden tax system.
2. A Golden-tax plug-in reads the file from SAP.
3. The plug-in processes the data for invoice splitting, modification, and/or other designated functions.
4. The results are used to create formal invoices, which require a special seal.
5. Simultaneously, the plug-in adds the new invoice numbers and related information to a "write back" file, indicating the corresponding relationship between billing and formal invoices, generation dates, and invoice types.
6. The "write back" file is uploaded back to SAP, updating the system with the necessary information for correct display and tracking.
This is a straightforward interface requirement but with strict requirements. You will want to thoroughly test this interface and validate the expected output.
2. Language - Enabling Language Support and Addressing Font Considerations in SAP for Simplified Chinese:
Consider language support for simplified Chinese by enabling the language pack in SAP. This includes configuring Chinese language for interfaces, reports, and forms, allowing users to interact with the system in their preferred language. You will need to find a local resource to help you with translations or potentially hire a third party. Precise character rendering may require special fonts, and testing is crucial to ensure accurate layouts and text presentation. Remember that printed versions may differ from spool outputs, so thorough testing should always include reviewing the printed forms. I have found that certain fonts may be required to install on the print servers as well causing the printout to look different than what was seen from the spool. The resolution to these types of issues can vary based on whether you are creating the forms in Adobe Forms vs. Smart Forms for instance. If you are using a print server, you’ll want to check your access methods are set up correctly in SAP and likely want to install SAPSprint on the print server itself to have better control over the print options.
3. Infrastructure and Compliance:
China has specific regulations concerning infrastructure and data security. Compliance with these regulations is critical to a successful SAP implementation. For instance, China has banned foreign TPM chips, necessitating the use of TCM (Trusted Cryptography Module) chips for decryption of stored data. Familiarize yourself with Chinese encryption laws and consider engaging cloud providers like Microsoft, who have established relationships with third-party hosting providers like 21Vianet who are compliant with local regulations. This approach can alleviate concerns regarding infrastructure regulation compliance.
4. HR, Payroll and Localization:
China's HR and payroll regulations are complex and vary across regions and industries. Customize your SAP system to handle specific requirements such as social insurance, housing funds, individual income tax, and employee benefits. Ensure that your SAP system accurately calculates and reports payroll-related deductions while complying with local labor laws. Additionally, stay updated on localization regulations, as China mandates that data must originate within its borders. You may need a strategy for ensuring compliance by storing ERP data in China on a separate instance and synchronizing the necessary data back to your core ERP or reporting platforms.
5. Latency Concerns and SAPGUI considerations:
The Great Firewall of China may introduce latency concerns, necessitating considerations for GUI setup. Implementing low-speed connection settings in SAPGUI can help mitigate these issues. SAP Note 161053 provides further guidance on using SAPGUI in WAN environments. Adapting the GUI setup to optimize performance and user experience is essential for a smooth SAP implementation in China.
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