Eric Kimberling’s Post

SAP S/4HANA offers the two-tier scenario specifically for such a case where the headquarters has an S/4HANA On-prem or private could solution, and the subsidiary adopts S/4HANA public Cloud. There are prebuilt integrations to make this seamless 👍🏻

In my experience, the era of viewing ERP as a single monolithic block is over. It's all about centralization and decentralization: determining which business capabilities you want to manage and monitor centrally, and where to place agility and creativity on the edge. For instance, one of our rapidly expanding clients (buy-strategy) has opted to centralize finance in a shared service, and centralize sales & marketing so they appear to the customer as a single brand and solution (featuring personal account managers, CPQ, self-service shops, advanced customer service), but in terms of operations, they operate as several internal companies each with their own operating model: professional services, engineering-to-order, make-to-order, configure-to-order, wholesale & distribution. Each of these operational entities operates its own niche ERP system- ranging from platforms to best-of-breed -each seamlessly integrated with the central sales and finance systems through iPaaS. By viewing a larger corporate group as a collection of multiple teams (or small businesses) that provide services to each other and to the outside world, each with their own data services (APIs), and P&L, we unlock innovative perspectives on architectural design.

As always there is no one answer fits all. The guideline should be, as always a cost benefit analysis. You need to linger on defining the problem and not run to the solution. Sometimes it is the best to bridge the needs by creating embedded mapping of accounts / projects, without changing systems. Sometime it is the requirements of the parent company to enforce certain procedures. It is never all or nothing. Changes need to be planned, based on the resources available to mitigate needs over time.

I'd frame the discussion on the Business side: there must be good commercial/Business model reasons to justify the investment (TCO rationale) in any Technological platform. Add the people side (Change Management & Adoption) to the equation...and the Agility to adapt to changing Market conditions. Assuming it makes Business sense to go for different Platforms, there is still room to find synergies by leveraging common processes, roles, ...

Not uncommon at all. I see a fair number of companies leveraging Oracle/NetSuite at a smaller sub and consolidating financials at month end to Tier 1 (usually SAP but have also seen Dynamics F&O).

It depends on business continuity and stakeholder requirements. What information needs to be shared between the environments. If only specific data is needed, are there API’s to retrieve and consolidate the data? I’ve worked in a few scenarios. For one, we used a financial platform to retrieve the data from each ERP and format accordingly. We only needed consolidated financials so this approach worked very well.

Eric , great question! There's no one-size-fits-all in ERP solutions; it depends on the organization's goals and nature. Traditional organisations still go for a unified ERP template. However, with growth and acquisitions, a diverse setup requiring financial consolidation yet catering to unique subsidiary needs emerges. Today we can apply a 'platform' approach, a shared system for customer interactions, (mini) local back office ERPs connected to a Finance consolidation platform. Tailoring an ERP strategy to a company's heritage, maturity, and objectives is key. With strategic planning, balancing robust and agile ERP systems to fit both parent and subsidiary needs is indeed possible. Anyway , there will be more need for independent advice;-)

The smaller subsidiary can go for Public cloud deployment of S/4HANA using GROW. or install Byd from SAP. Japanese companies follow this around the globe including NEC.

Having a tech strategy in place first would be important, which plays to Antoni Tuells's point. Perhaps even at the parent level and THEN the subsidiary level. But if two separate platforms are decided on, then integrations and ETL tools make a lot of sense in this space.

Hi Eric. Excellent question! Both Microsoft Dynamics 365 and SAP 4 Hana offer business solutions for this purpose where you can activate a new legal subsidiary based on a core group financial steering model. Your data model stays intact and you can meet your financial reporting requirements with chart of account and financial dimension structure on local as well as group level