Risk Mitigation in Emerging Markets

Anything worth doing will have some level of difficulty. Branching out into these expanding, and often steady, economies brings risk, fear, and even some frustration, but learning to navigate these markets can produce great rewards. Don’t let risk and fear cause you to be reluctant to approach the idea of doing business in emerging markets. By becoming aware of potential risks inherent to SAP projects in emerging markets, you can prepare and mitigate them head-on. Read on to learn more about the risks common to doing business and implementing SAP in emerging markets and how you can approach them with confidence.

Understand Your Risks from the Beginning

First, know that each difficulty you may face is different, and each emerging market is different. Every risk comes with new challenges that are often unique to the country where the emerging market is located.

We make a grand mistake when we look at these markets as “one-size-fits-all”. Best practices related to risk are rarely applied unilaterally in different markets. For instance, dealing with political instability can differ even within the same region. A wise answer to these diverse pain points is good research. Insight into the culture, customs, central and local governments can offer tips on heading off potential risks.

Sometimes laws can change based on city districts, so another wise option is to discover a way to build relationships with individuals in the emerging country and by even finding time to visit personally before launching in the market. These observational and relational investments will provide valuable and productive insight.

Over-Communicate, Quickly Mitigate, Proactively Manage

Depending on the structure, your presence in an emerging market could suffer if good communication is not a top priority. Whether or not your team, partners, or strategic networks are embedded, everyone must have a good and clear understanding of what is needed, what is happening, and what is required. If you fail in keeping stakeholders abreast of needs and outcomes, gaps occur, misunderstandings take place, and risks become reality. Good decision-making begins and ends with good communication and a team that is continually active in the dialog will work together to make wise and profitable decisions.

Having a local partner is a best practice, and it’s why we insist on keeping our consultants on site during SAP projects. Working with embedded SAP experts is critical to the success of a large project. Onsite specialists make collaboration simpler, and anticipation of risks and early mitigation seamless. Compliance issues or investment risks can be very difficult to assess remotely and without a local go-to, a minor issue can become a major irritation. Keeping financial risks in check sometimes can be accomplished through such collaboration where an onsite partner can offer hands-on expertise in a timely manner.

It’s been said that managers tell others what they want them to do but leaders show them. A proactive management strategy will greatly reduce the length of problems and avoid hidden pain-points altogether. Being present, putting eyes and ears on the true conditions, allows for proactive leadership.

 

Understand the Landscape and Be Relevant in Your Approach

Far from the industrial complex of major cities, lay towns or villages are central to the culture of many emerging markets. Understanding life outside the city, and the lifestyles of your potential workforce in remote locations, is important. Emerging markets require strategies specific to them. Distribution and logistical practices found in San Francisco may have no real application in other places around the globe, especially where there is basic infrastructure — so be specific and relevant.

Accepting your limitations will open your eyes to creative ways of accomplishing what is necessary. Remember, understanding risks is vital to overcoming them, and keeping ahead of potential problems is the key to success. A successful business is one that is thriving, not merely surviving. So consider some elements of creative risk management that could truly rework and recover a hopeless situation.

Be Flexible. If you aren’t ready to bend, you’ll break. Remember, just because it’s a normal business practice in the West doesn’t mean it makes sense in an emerging market. Local cultural ideals, language, and nuances are the scaffolds on which you must build in order to craft a successful venture.

Be Empowering. With the diversity of emerging markets, cultures and philosophies, be sure to give your team the ability and freedom to speak openly. This will not only help with identifying risks but empower them to solve problems proactively.

Be Wise. Know your team, your networks, your partners, and your people. Incentivize risk management within the confines of the market center. Your team will catch the vision of how vital mitigating and managing these risks are to the organization and they’ll perform accordingly.

Not everyone is able to enter into business in an emerging market, but for those who are patient and stay the course, great returns can be had. Learning who to trust and finding the help you need is the key to tackling the plethora of potential risks found in the glorious and profitable scope of emerging markets.

SAP Projects in Emerging Markets

At SAP Tackle, we understand the challenges and opportunities inherent to SAP projects in emerging markets. We also know that success is bolstered with an onsite consultant – so that’s how we work.

Your consultant is based on site during your SAP roll-out, reducing complexity and increasing efficiency. We anticipate site-specific challenges and communicate the project status objectively, and we stay around to provide on-going support until your SAP environment is fully stable.

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By | 2018-06-09T23:57:34+00:00 November 6th, 2017|Digital Disruption, Emerging Markets, SAP|Comments Off on Risk Mitigation in Emerging Markets