Choosing the Right ERP Solution to Support a Global Business – Part Three

22 MAY 2013
Many organizations are becoming increasingly global. To support these efforts, they have established multiple sites or locations—manufacturing plants, branch and regional sales offices, distribution warehouses and national, regional, and even global headquarters—that may be distributed within a country, a region, or around the world.As organizations expand into new territories, they face a number of operational challenges. They need to adapt to the business rules of foreign countries, including government regulations, reporting requirements and variations in tax and labor laws. They must accommodate multiple languages, multiple currencies and varying local best practices. And because companies operating in multiple countries are required by law to create separate legal entities, inventory transactions become more complex with intercompany movements being treated as purchases and sales between legal entities.

Cre8tive Technology & Design ( will be posting a three-part series on “Choosing the Right ERP Solution to Support a Global Business”

Part One                      Each Business Unit Chooses its Own Solution

Part Two           Consolidating the Entire Business on a Single ERP Solution

Part Three         Using a Combined Solution

Part Three – Using a Combined Solution

In response to the cost and complexity of a single Tier-1 strategy, many organizations are now moving to a dual vendor approach that uses a centralized Tier-1 ERP for the major parts of the business and a standardized Tier-2 ERP in the business units. Ray Wang of Constellation Research found that a two-tier ERP strategy was growing in popularity with more than half of companies surveyed saying they were considering a two-tier ERP approach.

As the consolidated parent system, the Tier-1 ERP can handle high data volumes and has the features necessary to manage transactions and reporting for the large numbers of employees and users that typically work in headquarters.  In addition, the Tier-1 ERP allows organizations to centralize functions that require consistency across the entire company, including procurement, operations, architecture, standards, processes and ERP application development.  These functions can then be supplemented by a single approved application that is implemented in business units where it is cost prohibitive to deploy the larger package.  For such distributed units, a solid Tier-2 player is a sound alternative.

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