Why Two-Tier ERP Matters in Europe

More than ever before, it’s increasingly easy for companies to operate on a truly global basis, as the likes of mobile technology and virtual workforces counter differences in geographies and time-zones with 24/7 access to data. As a result, many UK businesses are now pieces of a broader puzzle: subsidiaries of larger enterprises that are headquartered elsewhere. To operate efficiently, these companies need complete integration between the headquarters and smaller branches, but it can often be impractical for both to be run on the same software applications.

Take ERP as a case in point: a global or pan-European company that has invested in a legacy ERP system within its headquarters will likely find that installing the same system in much smaller regional offices with far fewer staff is not at all cost effective. Many top-tier ERP solutions are too complicated and too large for smaller business units to effectively and efficiently manage. Secondly, as subsidiaries and business units grow, so too do IT costs. The flexibility of the cloud, with its scalability and potential for rapid deployment, is an ideal solution for these regional offices. However, the challenge companies face lies in the logistics of incorporating this seamlessly into its overarching ERP system.

We’ve been thinking about how to address this for a while, which has led us to our recently announced partnership with Informatica. Together we offer the world’s first cloud two-tier ERP solution, allowing companies to keep the existing systems that run larger departments but introduce our cloud-based ERP solution at a regional level to support the increasingly diverse requirements of subsidiaries. Integrating both systems means that businesses benefit from accelerated consolidation, real-time visibility into subsidiary performance, local flexibility and control. And, since NetSuite can be deployed far more rapidly than conventional on-premise ERP, enterprises can standardise systems and process in weeks or months instead of years. Braskem, for example, the largest petrochemical company from the Americas, use SAP ECC at its headquarters in Brazil for global accounting, whilst using NetSuite at its subsidiary in the Netherlands. All the accounting information from this subsidiary is transferred to the central department, providing its headquarters with the visibility it requires.

To compete globally, large enterprises strive to gain agility in pursuing new market opportunities while improving productivity and operational efficiency – and it makes perfect sense that their IT systems are tailored to meeting these goals. For any business in a similar position, the two-tier ERP approach is well worth consideration. 

- Craig Sullivan, VP & GM, International

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