Whether your business is growing organically or through acquisition, each time a new business unit joins a typical enterprise it creates new headaches for the financial team. Either work will grind to a halt as a lengthy and costly extension of the enterprise ERP system is created for the new unit, or the finance team will need to develop a new, ad hoc system to pass financial data back and forth with the new entity should it choose to run its own accounting software. Both approaches are costly and wasteful choices for a growing enterprise.
Two-tier ERP takes the cost and fuss out of healthy growth by providing divisions and international operations with a nimble, extensible ERP solution in the cloud. Pre-built connectors between the cloud ERP tier and the corporate finance system ensure transparency and visibility, and protect the investment already made in the head office's on-premise ERP. There are seven good reasons why two-tier ERP is the best fit for today's growing enterprise:
1. The whole purpose of adding a new division, acquisition or regional office is to conduct more business. Two-tier ERP makes new business units operational and ready to perform much more quickly than the build out of a conventional, on-premise ERP system.
2. Standardizing divisions, subsidiaries and regional operations on a single solution with global consolidation and rollup capabilities provides the security of a strategic technology partner. More importantly for your business goals, there will be no need to worry about how business data will be reconciled and integrated with the corporate financial systems—the rollup processes will be consistent and easily repeatable every time a new unit is added to the enterprise roster.
3. A standard two-tier ERP solution reduces the complexity of training and supporting users worldwide. Instead of dealing with the peculiarities of a dozen different accounting programs worldwide, the organization can focus on mastering and supporting one powerful financial application in all markets and divisions.
4. Solutions designed for two-tier ERP architectures automate many of the monthly, quarterly and annual reconciliation steps usually associated with a diverse enterprise. This improves financial visibility for both executives and investors, and improves forecast quality.
5. Platforms designed for two-tier ERP make localization easy, with support for dozens of languages, automatic reconciliation of time zones around the world and virtually every global currency. The best come with integrated taxation and regulatory support for a wide variety of countries and territories, further easing your global expansion ambitions.
6. The "hub-and-spoke" design of two-tier ERP allows enterprises to gain immediate benefits from modern cloud solutions in their subsidiaries, acquisitions and regional operations without causing wrenching disruptions in the corporate finance office.
7. Two-tier ERP solutions from cloud providers are operational expenditures, not capital expenditures. This makes it easier to locate funding and gain consensus for the project.
We have prepared a free Two-Tier Strategy Kit, with insights from Forrester Research and Constellation Research, to help controllers and executives understand the comprehensive benefits of the multi-subsidiary, multicurrency NetSuite OneWorld solution. It truly is the "best of both worlds"—and certainly beats the alternative.
-Kishore Bhamidipati, Director, Product Marketing at NetSuite