When most manufacturers prepare to set up factories in Southeast Asia, IT system planning is the last thing they consider—only after the factory is secured, staff are in place, and production lines are about to start, do they begin asking, "What about our ERP system?" This order is the root of the problem.

System import takes time, local compliance requires customization, and data integration between headquarters and subsidiaries requires architectural decisions. These are not things that can be resolved in a few weeks after implementation. Thinking through three key questions during the preparation phase can save a significant amount of trial-and-error costs after implementation.

First question: Can I use the system settings from Taiwan directly?

The ERP systems used by the parent company in Taiwan are often designed with Taiwanese regulations in mind, including tax settings, invoice formats, and accounting subjects. If these are directly applied to the subsidiary in Southeast Asia, compliance issues will almost certainly arise.

Vietnam requires the use of electronic invoices (e-Invoice), with strict regulations on format and tax codes; Thailand's accounting procedures for VAT declaration and withholding tax differ from Taiwan's; Malaysia will fully implement e-Invoicing starting in 2024, and the requirements for foreign-invested enterprises' accounting records are also being upgraded. These localization needs cannot be solved simply by changing the language pack; they involve the underlying tax logic settings of the system.

The same problem exists with HR and payroll systems. Southeast Asian countries have different social security contribution rules, payroll calculation cycles, and methods for calculating statutory holidays and overtime pay, making Taiwan's payroll module unsuitable. In the early stages of factory setup, manually calculating salaries using Excel was manageable when the number of employees was small, but once the production line staff exceeded 50, the error rate and administrative costs of manual management would rise rapidly.

The issues that need to be confirmed during the preparation period are: what are the tax compliance requirements of the target country, whether the existing system can support them, or whether it is necessary to build an independent system locally or choose a solution with an existing localized version.

The second question: How does the subsidiary's data get back to headquarters?

The Taiwanese parent company needs to consolidate financial statements and view the inventory and production capacity of its Southeast Asian subsidiaries. These are basic management requirements for multinational manufacturing companies. However, if the subsidiaries' systems are completely independent from the parent company's, data integration can only rely on manual compilation of Excel spreadsheets, resulting in chaos before each month's closing.

There are three common architectures, each with its own advantages and disadvantages. The first is to directly extend the Taiwan system, with subsidiaries using the same ERP system for their subsidiary accounts and reports being automatically integrated. However, this limits the scope for local compliance customization, and system performance and licensing costs need to be evaluated. The second is for subsidiaries to build independent systems and integrate data through regular data export and import. This offers high flexibility but low integration efficiency and requires more manual intervention. The third is to choose different versions from the same vendor, ensuring compliance for both the parent and subsidiary companies, but balancing local compliance and headquarters visibility through a unified data format and API interface.

No single architecture is absolutely correct, but choices must be made during the preparation phase because this decision affects the direction of all subsequent system deployments. Deciding on the path after the project has commenced is tantamount to leaving local IT personnel to handle things independently without a blueprint, often resulting in higher integration costs later on.

The third question: When should the system go live, and how many months will it take to import it?

Implementing an ERP system isn't as simple as just plugging it in and it's operational. From requirements gathering, system setup, data migration, user training to deployment, the complete process typically takes 3 to 6 months in manufacturing, and complex MES integration projects can take even longer. If the production line is scheduled to begin mass production in month X, the system must be deployed at least a quarter earlier than that date to allow sufficient time for parallel testing and personnel familiarization.

This timeline should be incorporated into the overall factory setup plan during the preparation phase, rather than waiting until the factory renovation is complete before starting. Delays in system implementation, leading to situations where financial accounting is handled manually and inventory is managed using Excel when the production line begins, are not uncommon among Taiwanese businesses setting up factories in Southeast Asia. The time and cost required for remediation often exceed the initial savings in implementation planning costs.

The same logic applies to the timeline planning of MES. If the manufacturing industry needs to control production line progress, work order scheduling, and quality tracking in real time, the requirements interviews and construction of MES also need to be started in advance, and the integration interface between the system and the machine should be confirmed before the equipment is installed.

The starting point for IT planning in the preparation phase: the order of three questions

From a practical perspective, the starting point for IT planning during the preparation phase is not system selection, but rather answering these three questions: What are the compliance requirements of the target country? Which integration architecture should be chosen for headquarters? When is the system launch date? Only with preliminary answers to these three questions can solutions and vendors be effectively evaluated.

The first system chosen by manufacturers often lasts a very long time. The time spent on IT planning before implementation is far more worthwhile than being forced to rebuild it from scratch after implementation.

Further Reading

The following articles can be used in conjunction with this one:

Analysis of Vietnam's Investment Environment: A Guide for Taiwanese Businesses to Establish Operations in Vietnam

Three key terms you must know when setting up a factory in Thailand: BOI, IEAT, EEC

Before entering the Malaysian market, you must understand the new tax regulations of 2026.