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Transformational ERP Scaling for Subsidiaries: Three Steps for CIOs

Curious about ERP scaling for subsidiaries? This eBook provides a pragmatic framework for ERP scaling, including 3 key steps that CIOs should consider, and covers how to align strategic business drivers to define the right solution.

Mergers and acquisitions continue to abound as companies seek new opportunities to grow their portfolios of products and services to ultimately drive results to the bottom line. M&A activity prompts a challenge for CIOs when it comes to how best to integrate the technology ecosystem. Odds are likely to favor the newly acquired subsidiary possessing an entirely different technology platform or ERP.  At first pass, the CIO is faced with the choices to: 

  • Integrate by converting to the parent company’s centralized ERP,   
  • Pursue a less aggressive federated two-tier cloud-based deployment, or   
  • Leave standalone and take a more as-needed approach by building bridges to integrate data and reporting platforms   

Vendors today are aggressively marketing their cloud-based ERP solutions. The cloud-based two-tier model provides an opportunity for CIOs to evaluate if this could be a pathway for carefully orchestrating a shift from an on-premises traditional ERP solution that requires a time-intensive, large-scale capital and resource investment, whereas a two-tier investment is viewed as the more agile, timely, and cost-effective offering.  

Download the ERP Scaling for Subsidiaries eBook

One-tier vs. Two-tier  

Ruling out the standalone as a last resort, this leaves CIOs with the choice between a one-tier or two-tier solution, and there are pragmatic steps a CIO can take successfully to chart the right course to leverage their existing one-tier ERP and determine how best to evolve the deployment of a two-tier solution in their subsidiaries and with their network of partners. Ultimately, the steps are to:

  1. Align to the strategic business drivers.  
  2. Leverage the drivers to define the right solution. 
  3. Maintain a transformation-focused mindset. 

In this eBook, we dive deeper into these three steps for CIOs when it comes to ERP scaling for subsidiaries and we present an overview of the transition from the one-tier centralized model to the two-tier federated model.

Download the ERP Scaling for Subsidiaries eBook

Looking Ahead: ERP Scaling for Subsidiaries

Historically, ERP system implementations have been viewed as strategic necessities but are often characterized as resource-intensive, time-consuming, and costly investments for a business. As M&A activity continues, CIOs find themselves faced with how to best integrate a new subsidiary into their existing ERP ecosystem. One-tier positions an organization for anticipated growth with breadth and depth of functionality and tighter controls, while the cloud-based two-tier solution offers CIOs an opportunity to evolve and scale in an agile and cost-efficient manner. Careful consideration of key business drivers needs to play into determining the right solution along with a transformation-focused mindset.         

Reach out to Clarkston today to learn more about our SAP consulting and M&A consulting and advisory services. 

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Tags: SAP ERP, Mergers and Acquisitions