Carve-outs & Integrations

with the two-tier strategy

With SAP Cloud ERP, carve-outs, roll-outs, start-ups, and subsidiaries can be integrated quickly and cost-effectively. New units become operational quickly, while core processes, transparency, and integration with the existing SAP landscape are maintained.

Smart Start for 2-Tier ERP – read now!

Benefits for New Units and Corporate Headquarters

For the new unit

Get started quickly and cost-effectively—without your own IT infrastructure
Flexible adaptation to local requirements and business processes
Leverage global standards and best practices
Reduced ERP complexity and predictable, user-based costs
Mobile access anytime, anywhere

For corporate headquarters

Unified data foundation and standardized processes
Better planning, management, and cost control
More efficient collaboration across the entire company

2-Tier ERP: Typical Use Cases

Acquisitions and Divestitures: Quickly and consistently integrate new companies or spun-off units into the existing SAP landscape using their own cloud ERP system.
“In-House Startups” and New Business Units: New business units or subsidiaries can quickly be equipped with their own standardized ERP system—while remaining connected to the central SAP landscape.
Organic growth of existing subsidiaries: Growing subsidiaries can gradually transition to a modern cloud ERP while remaining connected to the central ERP.
Joint ventures: Joint ventures with partners can be established with a standalone ERP system while simultaneously being integrated into the existing SAP landscape.

Learn more in the following video.

In this 33-minute video, Thomas Kramer, Head of Cloud ERP Implementation at All for One, demonstrates how Cloud ERP enables smaller companies to operate quickly and cost-effectively—with simple implementation, a user-friendly interface, international features, and support for local requirements—all without the need for their own IT infrastructure.

Play in full-screen mode

Challenges in Carve-outs and the Integration of Subsidiaries

Strategic and organizational challenges: Units, processes, contracts, and responsibilities must be clearly defined and established as independent entities. At the same time, it is essential to get employees on board and reorganize key functions such as Finance and HR.
IT and System Landscape: Existing ERP, CRM, and other systems must be separated, duplicated, or rebuilt. At the same time, data must be migrated securely, accurately, and in compliance with the GDPR, and new business units must be integrated into the existing SAP landscape.
Growth and Complexity: The growth of subsidiaries and new business units often outpaces the ability of the existing system landscape to adapt. The increasing administrative and integration efforts are tying up more and more resources.
Time, Resources, and Costs: Carve-outs and the integration of new units are complex and time-sensitive. Often, there is a lack of internal IT resources, infrastructure, and time, while day-to-day operations must continue in parallel.
Financial and Legal Requirements: Separate financial structures, accounting systems, contracts, and, if necessary, banking structures must be established or adapted. Tax and regulatory requirements must also be taken into account.

Two-Tier-Konzept-SAP-Cloud-ERP — SAP Cloud ERP enables a streamlined and rapid connection between the company's network and the existing SAP landscape at corporate headquarters.

Typical Use Cases for Integrating Subsidiaries

Local Sales Organization

manages customer relationships
sells products that are shipped to customers from the company's central warehouse or from the company's manufacturing facility (drop shipping)

Sales and Logistics Organization

manages customer relationships
sells and ships products that are shipped from the branch's warehouse to customers

Local Customer Service

manages customer relationships
provides customer service on behalf of the company, such as maintenance, repairs, and consulting

Shared Services Unit

provides standardized, knowledge-based services to corporate headquarters or other branches within the corporate network, such as procurement, human resources services, and IT support/help desk

Services, Consulting, Engineering

manages customer relationships
provides project-related services to corporate headquarters, branch offices, or customers
Project team members come from corporate headquarters, the service unit, or other branch offices

The Two-Tier Strategy Explained Simply

The corporate headquarters (Tier 1) uses a comprehensive ERP system, such as SAP S/4HANA. Subsidiaries or business units (Tier 2) are connected via a lean, cloud-based ERP solution such as SAP Cloud ERP—quickly, cost-effectively, and integrated into the existing system landscape.

Why a two-tier strategy?

Typically, a company’s headquarters has a more powerful, robust, and complex ERP system than its subsidiaries, which can often result in ERP systems and strategies from different vendors across various areas of the company.

What may seem like a more cost-effective option at first glance can, in reality, become very expensive over the long term. This is because the various interfaces involve differing data and complex programming, and the upgrade schedules for products from different manufacturers must be coordinated, thereby increasing both costs 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, recent developments show that the previous general trend toward consolidating different ERP systems has left companies unable to streamline their business objectives and processes. Although this was done with the goal of reducing costs, in the long run it proves to be anything but an economical strategy. The answer to this is therefore SAP’s 2-tier strategy (subsidiary integration)!

What exactly does a "two-tier strategy" mean in the context of cloud ERP?

SAP’s Cloud ERP 2-Tier Strategy is a solution that enables corporate headquarters to retain its traditional SAP core ERP system while implementing a more flexible, leaner, and powerful alternative for its subsidiaries and business units.

With the Cloud ERP solution integrated into corporate headquarters, headquarters is able to support subsidiaries, meet their specific requirements, offer them greater flexibility in administration, and provide them with unparalleled access to central data and semantic processes.

Essentially, this proximity helps reduce complexity, as everything is synchronized and integrated, enabling the company to adopt new business processes and innovations more quickly. Fundamentally, the two-tier ERP solution is extremely cost-effective and utilizes half of the on-premises platforms to connect the subsidiary systems to headquarters.

In short: Two ERP solutions are operated simultaneously and integrated with one another. As a result, the robust, comprehensive ERP solution at corporate headquarters (Tier 1) can be utilized, while the flexible, agile, and—above all—cost-effective cloud ERP solution is available at the subsidiary level (Tier 2).

What are the advantages of a two-tier strategy integration?

Overall, the 2-Tier strategy has developed a two-tier ERP solution that offers a more efficient, transparent global communication process with the benefits of a comprehensive operations management system—without the costs and need for an extensive IT infrastructure.

When corporate headquarters uses SAP solutions, it has the perfect system for connecting sales, service, or logistics companies with corporate IT.

Since the system is also cloud-based, it enables local companies to maintain a sufficient degree of independence and flexibility—all of which is made possible by the two-tier strategy.

Do you have any questions and would you like a direct answer?

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About All for One

All for One is the No. 1 SAP partner in the German-speaking SME market, with more than 4,500 customers in Germany, Austria, and Switzerland.

Day in and day out, our experts bring great dedication, passion, and expertise to their work, making All for One a strategic partner for all things SAP, IT, and business.