April 20, 2015

The Benefits of Two–tier ERP

Two-tier ERP is when organization having 2 separate different ERP. One having Tier-1 ERP (Oracle/SAP) and its subsidiary using lower type ERP or Tier-2 such as Microsoft Dynamics.

Company that adopt two-tier ERP as a strategy would gain many benefits and among others are:

Reduce Cost

The cost to acquire Tier-1 ERP is between $13 million to $17 million according to an estimate publish by CIO magazine and with Tier-2 or lower, the cost would reasonably cheap and since adopting two-tier ERP, there is no need for Tier-1 ERP for subsidiary and subsequently can save cost.

Improve Innovation

Subsidiary with their Tier-2 ERP is more easy to configure and enable for improve innovation. They would find that their ERP is easy to customize as compared to their main company Tier-1 ERP system.

Greater Agility

As company expanding rapid, they would want a system that could follow suit. However with Tier-1 that cannot keep up with the the changing environment because it takes long time and cost so much to deploy. Tier-2 on the other hand is easy to configure and easier to control over fast changing environment

For that, Two-tier ERP is more strategic for fast changing company and large organization with multiple unique subsidiary

R “Ray” Wang, “Tuesday’s Tips: When to go with a Two-Tier ERP Strategy,” Enterprise Irregulars, March 2010

- One comment Not publicly viewable

  1. A few other benefits of two-tier erp are:

    Additional tiers can increase an organisation’s ability to meet local compliance issues in different locales.

    The two-tier approach also allows organisations to retain their existing ERP investments in infrastructure. Since a system is not being designed from the ground up and is simply being added, organisations can also benefit from the capabilities of the new system.

    Finally, a lot of time can be saved in implementing a two-tier strategy. For example Gartner estimates that implementation time can be reduced by up to 50%.

    26 Apr 2015, 22:50

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