Starting with this article, we will share a series of columns on the realities of ERP implementation projects in Thailand, taking into account the unique local circumstances. Over the past eight years, including assignments from Japan, I have been involved in multiple ERP implementation projects for Japanese-affiliated companies in Thailand.

I hope this column will serve as a useful reference for you. In this first installment, I will discuss the challenges faced from the perspective of user companies that actually utilize ERP systems in their daily operations.

In general, Japanese-affiliated companies in Thailand rarely have dedicated IT personnel, especially for business applications beyond infrastructure. As a result, when an ERP implementation project is launched, it is usually managed by a manager in the administrative department—either Japanese or Thai. Due to the lack of IT project experience, user-side leadership and decision-making capabilities tend to be limited.

Additionally, whether due to cultural differences or not, compared to Japan, Thai organizations often operate in a highly siloed manner, with strict division of roles. Few staff members attempt to understand or coordinate processes beyond their own department. Consequently, ERP requirements often become a patchwork of department-specific optimizations, making it difficult to achieve the true benefit of ERP—business and system integration—at an appropriate cost without excessive customization.

Japanese managers often delegate the details of daily operations to Thai staff. During requirements definition, it is not uncommon for them to express surprise or confusion, asking questions such as:

"Have we really been doing this?"
"What is the purpose of this process?"
"Is it even necessary to systemize this?"

Even when they try to dig deeper into these issues, language barriers and limited system knowledge make it challenging to lead discussions and consolidate requirements effectively.

On the other hand, there are projects where Japanese managers define the system requirements themselves and expect Thai staff to simply follow them. However, systems built this way often fail to cover actual business needs, which becomes evident during UAT (User Acceptance Testing) and go-live. This leads to either costly rework to incorporate Thai staff feedback or operating with insufficient functionality.

Therefore, the key points for ERP implementation in Thai subsidiaries can be summarized as follows:

1. When Thai staff lead requirements definition:
   There is a tendency for department-specific requirements to accumulate without regard for budget, resulting in cost overruns. Japanese managers must clearly define the purpose of system implementation and decisively eliminate non-essential requirements. Strong communication skills are essential for making these decisions.
2. When Japanese managers lead requirements definition:
   System design often fails to fully cover actual business operations. It is crucial to provide continuous feedback to Thai staff and seek their input throughout the process. Again, communication skills are indispensable.

Of course, “communication” in Thailand involves multiple factors—language, culture, and baseline skills—which makes “communication capability in Thailand” an interesting topic in itself. We plan to explore this further in future columns.