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Two Tier ERP is not a new concept, but in today’s market environment, there are a number of factors pushing companies to further adopt this model including:

  • Globalization continues to drive organizations to venture into new geographies to acquire new markets, gain new customers and explore new sources of supply
  • To ensure efficiency, companies look to off board of their non-strategic or non-performing business through divesture
  • To drive innovation, organizations adopt the path of fostering “In house” start-ups to foster the culture of innovation or even new LoBs to expand the businesses. the requirements of these new businesses are quite different from that of the parent organisation
  • With the reality of Digital transformation has resulted in adding further complexities by making it necessary for organizations to be connected in real time with the newly acquired subsidiaries, new divisions or even with their supply chain ecosystem (e.g. dealers, suppliers etc.)

Integrating disparate IT landscapes from different IT vendors is one of the biggest challenges faced by CxOs today and this problem is poised to aggravate further in future.

In majority of the cases the parent organization runs on an On-Premise system to fulfil the requirements of its complex business processes, whereas the subsidiaries or the supply chain partners or even the new businesses prefer to run on Cloud ERP based solution providing the agile business processes and providing the capability to scale up easily.

Two-Tier ERP with SAP S/4HANA Cloud is set to solve this paradox imposed on the CxOs. The native integration capabilities between the On-Premise and Cloud ERP solutions furnished by SAP relieves the pain-point of the customers by providing a uniform code line across the tiers from a single vendor. The figure below provides the deployment options of Two-Tier ERP with SAP S/4HANA Cloud along with the respective value propositions.

A comprehensive view on Two-Tier ERP has been created in the form of a whitepaper, which you can find here:

I’d encourage you to take a look and would be happy to hear any feedback or comment you may have.

For more information on SAP S/4HANA Cloud, check out the following links:

Follow us via @SAP and #S4HANA, or myself via @SDenecken

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