Connecting Subsidiaries

Normally, a company’s headquarters has a more powerful, more complex, more robust ERP system than its subsidiaries, which can often result in having ERP systems and strategies from different providers in the different business units in the company.

What seems to be the cheaper option at first glance can become very expensive in the long term, however. The individual interfaces may serve different data and require complex programming, while timelines have to be adjusted to cope with upgrades of products from different vendors, increasing both costs and complexity.

In addition to the additional expense, the company also loses its ability to make changes quickly and flexibly when they are needed. What’s more, current developments show that the general trend to date of consolidating different ERP systems has rendered companies incapable of streamlining their business objectives and processes. Although consolidations are generally started with the aim of cutting costs, they have proven to be anything but a cost-effective strategy in the long term. There is a solution to this problem: the 2-tier strategy (connecting subsidiaries) from SAP!

The Cloud ERP 2-tier strategy from SAP is a solution that enables headquarters to keep their traditional core ERP system from SAP, while at the same time implementing a leaner, more flexible, more powerful alternative for the company’s subsidiaries and business units.

The Cloud ERP solution, integrated with headquarters, permits support for the subsidiaries in carrying out their specific tasks, giving them greater flexibility in administration and unparalleled proximity to central data and semantic processes.

Because everything is synchronized and integrated, this closeness helps to reduce complexity, enabling the company to implement new business processes and innovations more quickly. The 2-tier ERP solution is extremely economical and uses half of the local platforms to connect the subsidiary systems with headquarters.

In other words, two ERP solutions are run concurrently and integrated with each other. The result: You can use the extensive, robust ERP solution at headquarters level (tier 1), while the flexible, agile, and – above all – cost-effective solution is available at the level of the subsidiaries (tier 2).

In total, the 2-tier strategy creates a dual-level ERP solution that offers more powerful, more transparent global communications processes with the advantages of an extensive operations management system – but without the costs or need for extensive IT infrastructure.

When the company headquarters uses SAP, it works with the perfect system for connecting sales and distribution, service, or logistics companies with the corporate IT.

And because the system is cloud-based, it gives local companies the independence and flexibility they need. It’s all possible with the 2-tier strategy.