SAP International Rollout
Download Case Study
TTX is the leading provider of railcars and related freight car management services to the North American rail industry. Being a land-locked business, when TTX implemented SAP in the 1990s, it did not anticipate conducting substantial business beyond U.S. borders due in part to high tariffs levied on American exports by Canada and Mexico. As a result, its ERP system was not designed to handle multiple currencies or international financial reporting. With the passage of NAFTA and the removal of trade barriers, the flow of goods across borders has increased significantly. TTX’s business did as well, to the point it purchased a maintenance facility in Canada. The new facility triggered Canadian tax and regulatory requirements and TTX needed its ERP system to accommodate financial reports in Canadian dollars (CAD) by year-end.
Adding a new company code in SAP is typically not difficult as most ERP systems are set up with international settings. This was not the case for TTX. Its SAP system was implemented as a single-currency environment. Transitioning the original design to a multi-currency environment involved completely restructuring the fundamental FI/CO database tables, which control vast worlds of data. TTX brought in Tahoe to work side-by-side with SAP as well as TTX’s IT team. SAP led the technical conversion of database tables to capture multiple company codes with diverse currencies. Tahoe was responsible for extending the new configuration to accommodate new company codes for TTX as well as expanding the footprint to create a more efficient transacting environment across legal borders. While many scenarios were on the table from easy to hard, the hardest is often times the best path forward. Fortunately TTX agreed with Tahoe’s “fix it right” approach. Instead of choosing a short-term workaround for Canada—Tahoe, SAP and TTX implemented a completely reconfigured environment to address new reporting requirements in Canada and also Mexico.
The backbone of SAP’s financial view is the FI/CO structure. The current TTX Controlling Area as defined did not accept a company code not denominated in USD. The solution involved a technical overhaul in the controlling area database tables to accommodate multiple currencies at the company code level. Furthermore, functional business requirements were missing and needed to be redefined. While the reconfiguration allowed for the segregation of Canadian results, the solution involved converting the Controlling Area setting to “all currencies.” This enabled a Canadian company code to be developed with a local currency definition of CAD, and gave TTX the ability to eventually take similar steps in Mexico.
The solution addressed TTX’s immediate legal and financial reporting requirements for Canada, and was successfully implemented in a very aggressive timeframe. More important from a longer-term perspective, the work extended and improved the client’s inter-company processing and reporting, allowing for seamless and reconciled financial reports in U.S. and Canadian company codes and currencies. As such, TTX is now positioned to grow business and operations in Canada and eventually Mexico with relative ease.