Sometimes it doesn’t make sense for subsidiaries of large enterprises to implement the same ERP system as headquarters. Some reasons include:
- IT resources and budget available at the subsidiary are significantly less than what it would take to deploy and support a corporate ERP system at small subsidiaries.
- As new subsidiaries are added, the window of time required for implementation is a lot less than what a HQ ERP system would take.
- The subsidiaries need systems to drive standards adoption, while the HQ systems are designed to support complex business scenarios and one-off customization.
Adopting a different ERP system from HQ is called a “two-tier ERP model” and can work especially well when both ERP systems come from the same vendor. This is occurring a lot with SAP Business ByDesign, so implementations where the SaaS (cloud-based software) nature of the system makes it very attractive. Companies like SAFECHEM, a subsidiary of The Dow Chemical Company, are a good example of the two-tier ERP model where limited budget and tight deadlines make the two-tier model and SAP Business ByDesign a perfect fit.
Regardless of which ERP system you currently use or plan on using, thinking about the different needs of subsidiaries and HQ is a smart move. Going through an ERP software selection and evaluation process is not easy, so take your time and consider not only the functionality, but also the requirements of the different parts of the organization.
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