Traditionally, ERP systems were deployed in a centralized manner. These systems allowed organizations to standardize and govern business processes across the enterprise from a single, monolithic system. While this approach provided a high degree of control, it often resulted in slower innovation and a rigid structure that could not easily adapt to the diverse needs of subsidiaries or regional offices.
Centralized ERP Deployment:
- Business Process Governance: Standardization driven by corporate templates and process ownership.
- Innovation Pace: Slower due to centralized control and coordinated upgrades across the enterprise.
- System Downtime: Affects the entire organization, leading to widespread operational disruption.
In contrast, SAP’s Two-Tier ERP strategy enables a decentralized, federated deployment model that allows subsidiaries to operate more autonomously while still integrating seamlessly with the headquarters’ core systems.
Decentralized Federated ERP Deployment:
- Business Process Governance: Standardized cloud solutions with continuous innovation.
- Innovation Pace: Flexible and faster at each organizational level, tailored to local needs.
- System Downtime: Limited to affected units, minimizing the impact on the overall organization.
