Editing Enterprise resource planning (section)

===Two-tier enterprise resource planning===

Two-tier ERP software and hardware lets companies run the equivalent of two ERP systems at once: one at the corporate level and one at the division or subsidiary level. For example, a manufacturing company could use an ERP system to manage across the organization using independent global or regional distribution, production or sales centers, and service providers to support the main company's customers. Each independent center (or) subsidiary may have its own business operations cycles, [[workflow]]s, and [[business process]]es.

Given the realities of globalization, enterprises continuously evaluate how to optimize their regional, divisional, and product or manufacturing strategies to support strategic goals and reduce time-to-market while increasing profitability and delivering value.<ref name="ferdows">{{cite journal | last1 = Ferdows | first1 = K | year = 1997 | title = Making the most of foreign factories | journal = [[Harvard Business Review]] | volume = 75 | issue = 2| pages = 73–88 }}</ref> With two-tier ERP, the regional distribution, production, or sales centers and service providers continue operating under their own business model—separate from the main company, using their own ERP systems. Since these smaller companies' processes and workflows are not tied to main company's processes and workflows, they can respond to local business requirements in multiple locations.<ref name="gill">Gill, R. (2011). "The rise of two-tier ERP." ''Strategic Finance'', 93(5), 35–40, 1.</ref>

Factors that affect enterprises' adoption of two-tier ERP systems include:
* Manufacturing globalization, the economics of sourcing in emerging economies
* Potential for quicker, less costly ERP implementations at subsidiaries, based on selecting software more suited to smaller companies
* Extra effort, (often involving the use of [[enterprise application integration]]) is required where data must pass between two ERP systems<ref>Montgomery, Nigel (2010).[http://www.gartner.com/id=1412121 "Two-Tier ERP Suite Strategy: Considering Your Options."] Gartner Group. July 28, 2010. Retrieved September 20, 2012.</ref> Two-tier ERP strategies give enterprises agility in responding to market demands and in aligning IT systems at a corporate level while inevitably resulting in more systems as compared to one ERP system used throughout the organization.<ref>{{cite journal | last1 = Kovacs | first1 = G. L. | last2 = Paganelli | first2 = P. | year = 2003 | title = A planning and management infrastructure for large, complex, distributed projects&nbsp;— beyond ERP and SCM | url = http://ceit.aut.ac.ir/~sa_hashemi/My%20Teachings/MS-CEIT-Supply%20Chain%20Management/W-Selected%20Papers%20for%20class%20seminars-last/scm-pm-A%20planning%20and%20management%20infrastructure%20for%20large%2C%20complex%2Cdistributed%20projects-beyond%20ERP%20and%20SCM.pdf | journal = Computers in Industry | volume = 51 | issue = 2| page = 165 | doi=10.1016/s0166-3615(03)00034-4| citeseerx = 10.1.1.474.6993 }}</ref>