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They don’t do SAP in Mongolia

August 8, 2011

The continued weakness of most Western markets has many implications – not least of which is growing focus on less developed areas of the world.

Most large corporations stopped being completely dependent on their home market years ago. They have diversified operations in terms of both sales activity and infrastructure. But many have resisted entry to emerging markets that represent significant commercial and operational challenges.

That is about to change. It is abundantly clear that growth opportunities in the West will be few. So new markets beckon. But they carry many risks and also do not fit well within the compliance models developed by large corporations.

As an example, I met last week with the CPO of a Global 100 company. He commented on a recent trip he made to Mongolia. ‘Our 55 page short-form contract doesn’t go over well there’, he observed. ‘And I realized SAP compliance is unlikely since no one had a computer.’

For this CPO, like many other commercial executives, the priority right now is to understand a whole new business model. Micro-finance, creative invoicing and payment schemes, planning a path through complex governance requirements, developing local suppliers in order to win business and enable support ….

Success in these troubled economic times will be driven by creativity, not compliance. Yet of course that creativity must follow a disciplined path and establish viable business controls. And this is why there is such demand for talented contracts and commercial personnel, people who understand the rules and know how to adjust them in ways that enable the right outcomes.

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