Tuesday, March 4, 2014

Chaos Expected as Manufacturers Rush to ‘GST-Ready’ their ERP System

As the April 1, 2015 deadline looms, Malaysian manufacturers are only starting to realise the daunting efforts to overhaul their most critical IT system – the ERP, to be GST-ready

KUALA LUMPUR, 4 March, 2014 – iContro Software Sdn Bhd (‘iContro’), the leading 100% local Enterprise Resource Planning (ERP) brand and provider, which has been closely involved in the local ERP scene over a decade, foresees that due to the government’s final resolve to implement the 6% GST to replace the current sales and services tax – businesses across all sectors, particularly the hugely-ERP reliant Manufacturing Sector, will be launched into a “…chaotic period as never seen before, in rushing to replace their unworkable legacy ERP systems.”

Its CEO Frank Lee, says that a handful of manufacturers are beginning to realise how little time they have left but, “When it finally dawns upon the majority of Malaysian manufacturers that their ERP system are simply too old to be upgraded to be GST-compliant, that is when there will be a mad scramble by top management to put ERP overhaul as the priority of their IT budgets.”

An April 2012 survey by the Federation of Malaysian Manufacturers (FMM), coincidently shows that over 60% of businesses responded that they were ready to implement GST, while 40% indicated that only basic preparations such as attending seminars and training to familiarise themselves with the GST scheme, have been made.

Deloitte Malaysia more closely estimates that less than 5% of businesses have started getting themselves ready.

Greater Complications for Manufacturing
According to Lee, there will be imminent chaos that will hit the local manufacturing scene – starting as early as the first quarter of 2014 , and carrying on until the last minute prior to the nation’s Goods and Services Tax (GST) implementation deadline on 1st April, 2015.

Furthermore, the introduction of GST is even more complicated for Malaysia’s manufacturing sector because the ERP system will need to accurately identify and capture the tax imposed or exempted details at the various raw material processing stages of the finished goods being manufactured.

Lee says, “Currently we know of over 270 items that will be exempted from GST, and not even including the various state, zone or incentive tax inclusions or exemption that apply to specific manufacturing businesses operating in Malaysia.”
“With no prior experience or local business knowledge in implementing a GST-compliant system for a core IT systems as massive as the ERP, many foreign IT brands will be challenged to supporting their base of manufacturers customers,” says Lee.

He says that there confusion and frustration in swapping over to newer ERP alternatives as many of the large US and European ERP brands will face significant problems to assist their IT budget-strapped manufacturing customers to have a working and proven GST-compliant ERP system.

For the record, today there are over 150 countries worldwide that have already adopted GST.  For a quick comparison, Singapore adopted GST in 1994  and Australia in 2000.

In trying to learn from experience, Australia emulated Singapore in GST adoption and implementation. And despite Australia having a much more mature and organized business culture compared to Malaysia, they took almost 3 years to finally stabilise a workable model.

“This is why Malaysian businesses, especially those in the manufacturing sector that have the gigantic ERP that is heavily ‘system-affected’ by GST,  need to wake up now to the enormous work at hand. The best advice is to start making crucial decisions on your ERP system NOW,” ends Lee.

制造业廠商趕緊为其企業資源計劃 (Enterprise Resource Planning ,‘ERP’)系統准备就緒

隨著2015年4月1日的最後期限臨近,馬來西亞製造商才開始意識到全面改革  ERP系統为商品及服務稅实施做准备的 艱鉅努力

吉隆坡,2014年3月04日 -  iContro軟件有限公司(iContro Software Sdn Bhd ,’iContro'),100%自產自銷的馬來西亞企業資源規劃系统供應商,預测6%的消費稅实施以取代目前的銷售及服務稅将导致些许混亂如所有部門,特別是现采用ERP系统的製造業赶着更換其不可行的原有ERP系統。





據李某,迫在眉睫的混亂將打擊本地生產业 - 首發早在2014年的第一季度并持续直到全國的商品及服務稅(GST),實施期限於4月1日,2015年的最後一刻之前。






“這就是為什麼馬來西亞的企業,特別是那些在製造業采用大量ERP系统的公司需要马上着手開始针對商品及服務稅为ERP系統作出重要決定,” 李結尾。

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