{"id":26281,"date":"2023-08-16T08:00:16","date_gmt":"2023-08-16T13:00:16","guid":{"rendered":"https:\/\/staging.btmglobal.com\/?p=26281"},"modified":"2023-08-21T14:44:49","modified_gmt":"2023-08-21T19:44:49","slug":"would-a-two-tiered-erp-approach-work-for-you","status":"publish","type":"post","link":"https:\/\/staging.btmglobal.com\/would-a-two-tiered-erp-approach-work-for-you\/","title":{"rendered":"Would a Two-Tiered ERP Approach Work for you?"},"content":{"rendered":"

Would a Two-Tiered ERP Approach Work for you? <\/span><\/h2>\n

By Kimberly Berneck, President and CEO<\/em><\/p>\n

A lot of change management has to happen when a company undergoes a major shift, such as acquiring another business, adding a new division or opening a new location. An ERP system is required to make operations run smoothly \u2013 but it must meet the needs of the larger corporate organization while also being flexible for the smaller units.<\/p>\n

Increasingly, companies are learning that an ERP that\u2019s good for corporate isn\u2019t always good for the unit or subsidiary. The solution is a two-tiered ERP approach: a scenario in which a more robust, Tier 1 ERP is used at the corporate or global level, while a less complex and less costly Tier 2 ERP (one that is perhaps targeted to meet specific industry, company or division needs) is used for the smaller unit. These ERP systems are integrated and work together in a seamless environment across diverse organizations.<\/p>\n

Avoid these 4 Common ERP Implementation Mistakes!<\/span><\/a><\/div>\n

What is a two-tiered ERP environment?<\/strong>
\nLarge and complex organizations typically have an enterprise-level ERP (such as Oracle, SAP, or Microsoft) that is on premise and highly customized. The ERP provides a unified view and seamless flow of data between core business systems that include financial, human resources, inventory and procurement.<\/p>\n

But a smaller business unit, a different office location, or a newly acquired company may not need a complex or highly customized ERP. In fact, a large ERP may be a detriment to their operations because it\u2019s a greater load on the system, more difficult to learn to use, and isn\u2019t industry-specific for their needs.<\/p>\n

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That\u2019s where a two-tiered ERP approach comes in. Oracle NetSuite defines this scenario<\/a> as the following:<\/p>\n

Two-tier ERP is an approach to enterprise resource planning technology that uses two systems to address the needs of large businesses with multiple locations and\/or subsidiaries. Under this strategy, headquarters will use a Tier 1 ERP that\u2019s highly customized and has the functionality to run a large, global company, while subsidiaries or smaller business units use a less resource-intensive Tier 2 ERP that better suits their needs.<\/em><\/p>\n

Why choose a two-tiered ERP environment? <\/strong>
\nTier 2 ERPs are ideal for smaller businesses that want pre-configured functionality based on leading practices for their industry. Tier 2 ERPs are typically less expensive systems to purchase and implement, easier to learn because they are less complex, and their pre-built functionality usually doesn\u2019t require heavy customization for Tier 2 business needs. As a cloud-based solution, a Tier 2 ERP doesn\u2019t demand a large IT team to manage it or worry about upgrades (those are managed by the vendor).<\/p>\n

Another consideration is if your organization already has an ERP but needs robust financial software. That\u2019s where a financial solution like NetSuite<\/a> can really shine, giving you core financial functionality without requiring additional complexity or data integration in order to seamlessly integrate the solution into your current application landscape and business processes.<\/p>\n

For a smaller business unit, a Tier 2 ERP gets the team up and running faster. They get effective tools to do their jobs and corporate gets the information it needs fed into the Tier 1 system. It\u2019s a win-win.<\/p>\n

Top reasons to consider a two-tiered ERP <\/strong><\/p>\n