Maximizing the benefits of SAP’s agile, scalable cloud ERP architecture using a Two-Tier approach
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Key Takeaways
⇨ An ERP system capable of agile adaptability is essential, as traditional centralized monolithic architectures in on-premise deployments restrict new business models and capabilities adoption due to system constraints from customizations.
⇨ SAP offers a decentralized two-tier ERP approach to accommodate this scenario, known as the headquarters and subsidiaries model, where the headquarters runs an on-premise ERP or private cloud, and the subsidiaries run public cloud.
⇨ Customers that have deployed this approach have observed several significant benefits like faster time-to-value with an accelerated go-live, rapid global deployment, and an increased cycle of innovation by leveraging a standard approach.
To remain competitive, companies must adopt agile operations and quickly respond to changing business conditions, which is where SAP’s agile, scalable cloud ERP architecture using a Two-Tier approach becomes essential. Traditional centralized on-premise ERP systems can hinder the adoption of new business models due to customization constraints. SAP’s Two-Tier ERP strategy, involving a headquarters and subsidiaries model, allows large enterprises to adopt a more gradual transition to modern ERP systems like S/4HANA Cloud Public Edition. This approach lets headquarters maintain on-premise or private cloud ERP, while subsidiaries operate autonomously on the public cloud, ensuring seamless integration for financial consolidation and planning. It supports various business scenarios such as acquisitions, new business units, and joint ventures, and offers benefits like faster time-to-value, rapid global deployment, continuous innovation, and lower total cost of ownership by shifting to operating expenses. This model ensures comprehensive data security and reliability, managed by third-party providers.
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