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What to Look for in a Cloud-Based Solution for 2-tier ERP

By Michael Morel

In addition to meeting the functional needs of a subsidiary, a Cloud-based solution for 2-tier ERP should meet four key requirements:

  • Integration with Corporate ERP system: A subsidiary system must integrate with the HQ ERP system in order to better coordinate and manage activities between them; to implement a shared corporate services model; to provide HQ visibility into its operational metrics and regulatory compliance; and for financial consolidation. Key integration scenarios include:
    • Data Exchange to support financial consolidation.
    • Process integration to support scenarios such as a subsidiary buying from (or selling to) headquarters.
    • Master Data integration to enable maintaining and synchronizing key master data, such as customer and product information among the corporate and subsidiary systems
    • Analytics integration to enable HQ to compare performance across subsidiaries
    • IT Management integration to reduce the pressure on subsidiary IT resources by distributing subsidiary incidents to corporate IT

This level of out-of-the box integration not only ensures faster and more efficient fulfillment with the internal supply chain, but it provides single view into the truth at a low cost of ownership and without needing to implement a single system across the enterprise.

  • Extensibility of the application platform: Subsidiaries in certain industries have unique requirements. Subsidiaries should be able to deploy add-ons and then easily carry them across their ERP version upgrades. The Cloud platform should also enable its partner ecosystem to create a library of extensions that can be deployed in a rapid and cost-effective manner.
  • Less IT Resource/budget intensive: Many subsidiaries have limited IT budgets and IT expertise. The chosen cloud-based application should enable subsidiaries to deploy a system rapidly, without the upfront cost of an on-premise system. Support and application upgrades must be included in the low monthly fee.
  • Security and availability of the solution: The vendor should ensure that your mission-critical ERP system data is extremely secure by deploying it in the most modern and secure data centers, supported by rigorous security audits. In addition, these data centers should have sophisticated monitoring, failover and backup infrastructure to ensure 24X7 availability of your system.


Many large corporate organizations are choosing SAP Business ByDesign because it is a proven, integrated business solution with subsidiary implementations worldwide. The combination of rich functionality, cloud-based delivery model, and analytics capability, as well as support for HQ integration scenarios (including out-of-the-box integration with SAP ERP) make it an ideal solution for SAP customers looking to implement a two-tier ERP model for their subsidiaries.

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AltaFlux Corporation

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