In the previous column, we introduced our project management framework, including how we bridge internal communication gaps within client organizations. Beyond communication, Thai NS Solutions also implements the NSSOL Group’s standardized project management methodology to minimize risks and ensure successful system go-live.
Our contracts follow the same structure commonly used in Japanese IT projects, with clear agreements and acceptance at each phase. This approach provides transparency and predictability throughout the project lifecycle.
In contrast, when working with local Thai IT vendors, expectations and practices that Japanese clients consider standard often do not apply, leading to significant confusion after the project begins. Over the years, we have assisted many clients in recovering and restructuring projects that encountered such issues.
Based on these experiences, we would like to highlight key differences and considerations when engaging with Thai local IT vendors versus Japanese-affiliated vendors like us.
In Japanese IT projects, it is generally expected that vendors take responsibility for supporting the client until the system is fully operational—except in cases where the client’s IT department has sufficient capability to lead the project independently.
However, Thai local IT vendors typically define their responsibility as ending once the system is set up and handed over to the user. This means that verifying whether the ERP system can be operated effectively in real business scenarios, including proper master data registration, falls entirely on the client.
For user departments lacking IT implementation expertise and leadership, bringing the system into live operation without vendor support is extremely challenging. We have seen many projects stall at this stage.
Payment terms often add to the risk: 50% upfront, 30% at mid-stage, and the remaining 20% upon completion. If the project fails during user validation after handover, clients may face disputes while already having paid 80% of the cost—an unfavorable condition that makes risk mitigation difficult.
In Thailand, IT engineers often enjoy relatively high status compared to Japan—both in terms of salary and social recognition. This can lead to a narrow perspective: focusing solely on technical tasks as sufficient for job security.
In Japan, IT engineers are expected not only to deliver technical solutions but also to contribute to the client’s business outcomes. The local vendor’s stance of “responsibility ends at system handover” reflects this difference.
For ERP projects, this often means collecting only the minimum information required for parameter setup, configuring the system without considering business workflows, and providing training focused on functionality rather than practical usage. Their attitude is:
“Please confirm if the system works for your operations. If modifications are needed, let us know and we’ll handle them as they come.”
As mentioned earlier, this approach requires strong IT knowledge and leadership on the client side. While not all local vendors operate this way, smaller vendors offering low-cost solutions often fall into this pattern. We recommend understanding these risks thoroughly before making a decision.
This concludes our four-part series on the realities of ERP implementation projects in Thailand. We hope these insights serve as a valuable reference for your future initiatives.
15-06-2023
