Carve-outs & connections

• manages customer relationships
• sells products that are delivered to customers from the company's central warehouse or factory (drop shipment)

• manages customer relationships
• sells and delivers products from the branch's warehouse to customers

• manages customer relationships
• provides customer service on behalf of the company, e.g. maintenance, repair, advice

provides standardized, knowledge-based services for the company headquarters or other branches in the company network, e.g. procurement, personnel services, IT support/help desk

• manages customer relationships
• provides project-related services to the company headquarters, branches or customers
• Members of the project teams come from the company headquarters, service unit or other branches

Typically, a company's headquarters will have a more powerful, robust and complex ERP system than its subsidiaries, which can often lead to ERP systems and strategies from different vendors in different areas of the business.

What may seem like a more cost-effective option at first glance can actually become very expensive over a longer period of time. This is because the different interfaces have divergent data and complex programming, and the timelines for upgrading products from different vendors need to be adjusted, increasing both cost and complexity.

In addition to the costly implications, this also means that the company loses its ability to implement changes quickly and at a time when they are urgently needed. Furthermore, developments show that the general trend to date of consolidating different ERP systems has resulted in companies being unable to streamline their business objectives and processes. Although this has been done with the aim of reducing costs, it is proving to be anything but an economical strategy in the long term. The answer to this is therefore SAP's 2-tier strategy (subsidiary integration)!

SAP's Cloud ERP 2-Tier strategy is a solution that allows headquarters to retain its traditional core SAP ERP system while implementing a more flexible, streamlined and powerful alternative for its subsidiaries and business units.

With the Cloud ERP solution integrated into the head office, the head office is able to support the subsidiaries, meet their specific needs, offer them more variability in management and provide them with unparalleled proximity to the central data and semantic processes.

Essentially, this proximity helps to reduce complexity, as everything is synchronized and integrated, allowing the company to adopt new business processes and innovations more quickly. Basically, the two-tier ERP solution is extremely economical and uses half of the platforms on site to connect the child systems to the head office.

In short, two ERP solutions are operated simultaneously and integrated with each other. As a result, the robust, comprehensive ERP solution of the company headquarters (Tier 1) can be used, while the flexible, agile and, above all, cost-effective cloud ERP solution is available at the subsidiary level (Tier 2).

Overall, the 2-tier strategy has developed a two-tier ERP solution that provides a more powerful, transparent global communication process with the benefits of a comprehensive operations management system - without the cost and need for extensive IT infrastructure.

By using SAP's solutions, corporate headquarters are working with the perfect system to connect sales, service or logistics companies with corporate IT.

As the system is also cloud-based, it allows local companies to maintain sufficient independence and flexibility - all of which is possible with the two-tier strategy.