SAP on the Cloud

“SaaS and Multitierd ERP Strategy” or how we would call it – get your subsidiary linked in fast…

December 5, 2011 by Sven Denecken

With our latest blog posts about the subject of Two Tier ERP strategies in mind, a recent Aberdeen Analyst Insight Paper (see below) [1] names some interesting figures, confirming the growing trend of companies deploying a two-tier ERP strategy. Such a strategy is becoming increasingly attractive, especially to so-called Best-of-Class organizations (meaning the top 20% of survey respondents by performance). According to their research, those organizations are 2.54 times as likely as all others to adopt such an ERP strategy, for exactly the reasons we already explored in our Two Tier ERP blog post series.

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Moreover, those multi-tiered strategies often consist of an on premise solution for the headquarters, while Software as a Service (SaaS) is more and more used as a deployment model to quickly get new business units and subsidiaries up and running.[2][3]

But is SaaS so attractive to organizations with multi-tiered ERP stratgies?

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Part 3 of a series on 2 Tier ERP: Global versus Local – how to win speed in subsidiary scenarios

November 22, 2011 by Sven Denecken

In our last blogs, we have discussed the pros and cons to a decentralized and to a centralized approach.

However, rarely is either extreme the optimum. Instead, managers are often called upon to think globally and act locally.  In other words, we should somehow marry the best aspects of centralization and decentralization.  While this may sound like a paradox, in this blog we will discuss specific use cases in ERP of how global and local, or central and de-central, can be combined for an optimal result. Thanks to modern developments such as Service Oriented Architectures (SOA), cloud computing and orchestration, multinationals today are able to deploy ERP strategies which harness the advantages of both centralization and decentralization in real time.

So today, we explore how technology can enable a synthesis of the two strategies preserving many of the strengths and minimizing the weaknesses of each extreme.

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Part 2 of a series on 2 Tier ERP

November 13, 2011 by Sven Denecken

Now coming back from Sapphire with a lot of good talks to customers, experts and analysts – as promised our further thoughts on 2Tier ERP. And this one purely reflecting on the business practices and challenges, business first. Enough technology this week.

Last week, we explored the many reasons why half of the companies surveyed by Ray Wang are seriously considering a two-tier ERP strategy.  Today, I’d like to explore the other side of the coin:  Why do so many companies resist the temptations of decentralized ERP?

Despite the multitude of arguments in favor of decentralization, the fact remains that the majority of Large Enterprise companies strive for a centralized ERP strategy.  In a recent survey conducted by Gartner Research[1], 70% of the companies polled with over 1000 employees wanted to operate a single global ERP system.

Centralization has come into increasing favor as technology has broken down communication barriers and corporate strategy has identified the value of leveraging synergies across the enterprise.  Gone are the days of conglomerates that consciously invested in unrelated businesses to diversify their risk.  Today, investors achieve diversification thru their stock portfolios.  Each stock, in turn, is expected to invest in core competencies which, when combined in novel ways, can provide unique competitive advantage.  C.K. Prahalad and Gary Hammel[2] have published extensively on this topic.  For the purposes of this part of our blog series, we will focus on the technology component of centralization up to and including business processes.

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