Published on the 23/11/2015 | Written by Newsdesk
Expanding overseas can be an effective way of broadening the customer base and increasing profits…
It is also incredibly complex and fraught with danger, as antipodean businesses opening international offices can lose focus in pursuit of the big time. While there are numerous benefits associated with expanding to reach global markets it pays to get strategic advice to overcome these challenges.
That’s according to CenturyLink ANZ regional director Stuart Mills. “The list of considerations for local companies looking to expand overseas is massive: there is always something new to consider. The key ones can be broken down into four main categories: taxes; IT systems; privacy; and cultural expectations. By spending time developing a strategic plan to deal with each of these areas, companies can improve their chances of expansion success.”
1. Taxes
Corporate tax rates are relatively high and can be unstable, putting Australian and New Zealand organisations at a comparative disadvantage. To avoid falling foul of the Australian Taxation Office (ATO) or the Inland Revenue Department (IRD), companies should ensure they have adequate reporting systems and capabilities, and clearly understand their obligations. This can include putting enterprise resource planning systems in place, and working with reputable tax advisors to avoid errors.
2. IT systems
Managing IT systems across different countries, with their different time zones, connectivity capabilities, and market expectations, can be difficult. Maintaining hardware and delivering software upgrades are relatively simple when the company is located in a single country but complex when other countries become involved.
To simplify IT systems management and maintenance, companies should consider putting as much of their infrastructure and applications as possible in the cloud, and selecting a partner that can offer standardised solutions (including co-location, managed IT services, or cloud) around the globe. This minimises the amount of resources required on the ground at overseas locations, and avoids having to work with different local companies in each country who won’t be able offer a standardised solution.
3. Privacy
Sharing information, which is often confidential or sensitive, quickly and securely may present difficulties depending on the country the organisation is operating in. Companies should consider a file-sharing solution that lets them avoid using email to share files within or outside the organisation.
Companies must also remember that complying with local privacy laws means they must store data appropriately. Selecting the right data centre provider depends on where the data needs to be stored, how flexibly the service can scale up and down, how reliable the service is, how quickly new infrastructure can be deployed, and how financially and operationally stable the provider is.
Mills said Australia’s privacy laws are amongst the strictest in the world, making it an ideal location for multinationals to store data.” If they comply with Australian laws then they are likely to comply with the laws in most other countries.”
4. Cultural expectations
In many countries around the world, even those that seem culturally similar to Australia and New Zealand, cultural expectations can trip up business managers and, potentially, cause significant problems. Simple things such as dress codes, how to run a meeting, and even how to say no to a potential business partner can become complicated when doing them across cultures.
Businesses should seek advice from experts to ensure they meet the cultural expectations of the new location.
