Whatever size you are, digital transformation is now widely seen as a matter of survival. A recent study by Oxford Economics suggests that a majority of companies are planning to make the technological changes necessary to remain competitive into the future. However actual progress towards comprehensive digital transformation remains slow.
complex companies are growing fast and acquiring new subsidiaries at pace there
is even more delay as leaders try to work out how best to incorporate the
smaller companies into the technology landscape.
with large embedded ERP systems assume that adding their acquisitions into
their existing system is the most efficient way to maintain a cohesive network.
But at In Cloud Solutions we often hear the other
side of the story when subsidiaries become frustrated because they have been
told they must wait in line before they can be moved onto the parent company’s
it doesn’t have to be this way. Parent companies can opt for a system that
allows them to maintain control over their subsidiaries while also giving the
smaller companies freedom to be agile and responsive – the very qualities that
made them so attractive in the first place. Nurturing these dynamics, while
leveraging the strength of the parent company, can be a key competitive
advantage for larger organizations.
maximize this, the parent company must provide subsidiaries with the tools they
need to succeed while effectively managing the subsidiaries as a cohesive
network. So now you start to see why waiting for full ERP is not the only
answer – a 2-Tier approach is a really good alternative.
What is the 2-Tier Approach?
give the smaller companies the best chance of success, parent companies need to
keep things simple with access to straightforward financial, governance, and
compliance processes which can be replicated across the subsidiary network.
These can then be made to dovetail with its own processes while maintaining a constant
flow of information to, from, and among the subsidiaries. This can be done be
introducing a lighter cloud based ERP to the subsidiaries, which integrates
directly with the parent company’s system. It can be done quickly and
immediately without any need for delays.
IT resources may be limited it helps if the light software used to synchronize
with the parent company is cost effective and simple to implement and use. At
this point you will see why cloud is a no brainer as it is a much cheaper and
more flexible delivery system for IT across the whole network of companies and
doesn’t involve hardware.
Benefits of the 2-Tier Approach
wanting to leverage a 2-Tier solution can use their current robust enterprise
level solution and link it to a cluster of companies on “ERP lite” simply and
quickly. They can do this by turning to any number of big name providers who
can nominate a solution that readily integrate with the processes and best
practices of the parent company. We suggest using a combination of S/4 Hana and
Business ByDesign from SAP but there are others.
long as the solution can do the following;
Support cross-organizational processes to simplify and unify corporate and subsidiary operations
Facilitate governance and streamline reporting of consolidated financial and operational results.
Use built-in best practices to help subsidiaries manage customer relationships, human resources, projects, procurement, and their supply chains.
Configure predefined workflows to match your unique business processes
Work within the regulation of the countries you specify
Integrate corporate resources
Integrating corporate-approved processes with those of subsidiaries is a key benefit of the 2-Tier ERP approach.
can simplify the collection of subsidiary financial information, facilitate the
sharing of corporate services to subsidiaries, and reduce duplication of data
models. It can also help a parent company deliver products and services to
subsidiary markets more effectively.
it comes to the digital future, such solutions have the advantage of positioning
everyone to take advantage of digital trends. For example you will now have a backbone
for hyper-connectivity across all companies and depending on your choice you
will also likely have access to In-memory technology for real-time processing
and advanced analytics. Other leading edge trends include state-of-the-art
cybersecurity and cloud-based delivery for ease of use, management and support.
in the time saved by cutting duplication of efforts and responsibilities
between subsidiaries and the parent company and you can see how a 2-Tier ERP approach
can really build your competitive advantage. Why keep your subsidiaries waiting
for all the advantages of an integrated ERP system? Contact your provider for a
full run-down of options available or get in touch with a member of a global
network like United Vars if you have several entities
the research quoted;
Economics was commissioned by the SAP Center for Business Insight to conduct
and analyze a survey of over 3,100 executives around the world about the
opportunities and challenges facing companies as they attempt digital
transformation. Fieldwork took place in 2017.
https://erpnews.com/v2/wp-content/uploads/2019/08/digital.jpg400600katiehttps://erpnews.com/v2/wp-content/uploads/2018/10/[email protected]katie2019-08-27 13:23:572019-08-27 13:23:58Digital Transformation and ERP Growing Pains? Why a 2 -Tier Solution Could Be the Answer
Do You Know How ERP Systems Have Evolved Up Until 2019?