5 Benefits of Running a Two-Tier ERP Strategy

Keep the core ERP system at your headquarters operations

and implement a more flexible, affordable but powerful alternative ERP solution in your subsidiaries.

Before reviewing the 5 astonishing advantages of running a Two-Tier ERP System, let’s start by defining a two-tier approach itself. 

Your company is growing with new subsidiaries, new acquisitions and new global markets. You need to integrate these new entities with your corporate ERP, but in Enterprise Software, not one size ERP fits all timing, functional and budget needs. Indeed, you need to avoid the need to fit a big ERP system into small entities. Does this sound familiar to you? In this situation the answer to your needs is called Two-Tier strategy, explained Tomas Fertig, President and CEO of SEIDOR USA. 

This is when two ERP systems are operated simultaneously and integrated with each other. The result is that you can use the robust, comprehensive ERP system at the corporate level (tier one) while keeping the more flexible, agile, cost-effective and easier to implement solution called SAP Business ByDesign at the subsidiary level (tier two). 

5 Benefits of Running a Two-Tier ERP Strategy

Having clarified this approach, now let’s review the 5 astonishing advantages of running a Two-Tier ERP strategy. 

  1. Fast Integration: according to Fertig, a Cloud ERP like SAP Business ByDesign or S/4HANA Public Cloud can be implemented and customized in half the time compared with a one-tier solution of the same scope
  2. Increased Customization and Simplicity:Tier 2 solution SAP Business ByDesign can be simplified and reduced to just the processes required by the end users i.e. to the core data, functions, and processes they need to do their jobs. This simplified ERP gives them more flexibility for the same budget compared to a customized version of the existing corporate ERP
  3. Value for Money: flexibility is not the only thing that is enhanced by having a two-tier strategy. You also get more bang for your buck
  4. Simple and Cost-Efficient Implementation: the two-tier strategy often saves time and cuts costs compared to the one-tier approach which means that subsidiaries can re-use the solution templates defined by headquarters when rolling out the new solution. Then the focus can fall onto other work like specific country localizations
  5. Avoiding Complication: many subsidiaries forced to try and work within a one tier corporate solution get overwhelmed by complexity and start to implement their own ERP systems – they crave something less complex, cheaper and more suitable to their needs. However, the up-shot is usually more administration, updates, and requests for support, along with the need to purchase and integrate yet more tools. You can bet none of this was initially costed into the project! Using a flexible, highly customizable (e.g. forms, tax conformity, etc.), sleeker and simpler solution at the tier two level such as SAP Business ByDesign, makes subsidiaries more efficient and transparent. 

 

For smooth SAP implementations abroad, you should choose to work with local experts and trusted advisors. As part of United VARs, SEIDOR is a market-leading SAP solution provider ensuring the best local and global service and support for your international SAP project.

At Seidor we offer Two Tier Strategy under the following models

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