Flexibility in Deployment Models Key to Addressing Rapidly Developing Market for Two-Tier ERP Strategies being Considered by One Third of Businesses Surveyed
Epicor Software Corporation (NASDAQ: EPIC), a leading provider of enterprise business software solutions for the midmarket and divisions of Global 1000 companies, has announced the results of its enterprise resource planning (ERP) strategy survey. The survey received over 1,600 responses from a variety of companies worldwide and a third of all respondents said they were considering a two-tier ERP strategy.
“It was very interesting to note that although 59% of the respondents have a single tier ERP strategy in place, only half of them have actually succeeded in getting that system implemented in the majority of their sites worldwide and over a third are actively considering a two-tier strategy to solve this problem,” said James Norwood, senior vice president, worldwide product marketing for Epicor.
“Epicor’s unique ability to seamlessly co-exist with Tier-1 implementations coupled with its flexible deployment options including on-premise, on-demand, hosted or any combination thereof from a single next-generation ERP platform offers these organisations the flexibility they need in order to realise successful ERP strategies worldwide.”
In line with a recent report published by Forrester Research, Inc., which notes, “Some firms have found that the simplest ERP standardisation approach, which minimised IT costs, was not the best for achieving enterprise goals.” Furthermore, “When formulating their ERP standardisation policies, application development and delivery professionals should carefully consider: current and future likely operating models; the relative attractiveness of ‘on-premise’ and ‘on-demand’ solutions; and, deployment of new technologies.”
Norwood continued, “The survey also noted that the reasons why organisations look to a tiered strategy include the need to better meet functional requirements in various parts of the company, improved data quality and reporting, as well as more rapid rollout to the whole company. The biggest challenge with such a tiered strategy seemed to be master data synchronisation.”
A two-tier ERP strategy is the combination of Tier 1 and Tier 2 systems, often from the same vendor, into a single integrated environment. This often means retaining Tier 1 solutions in locations where they are already deployed or where the complexities of the business are sufficient to justify the increased implementation, configuration and maintenance costs while using a Tier 2 solution in the locations that need a powerful ERP system deployed rapidly, yet either cannot justify the cost of, or lack the local support resources to maintain a full Tier 1 environment or wait for its implementation.
According to Gartner, Inc., “Many companies still have a patchwork of ERP solutions across their business. Rationalising these applications can deliver economies of scale, support global standardisation of core business processes and simplify vendor management, yet too many companies take an unstructured, transient approach to the exercise.”
Today, Tier 2 solutions such as Epicor offer all the capabilities that an organisation would expect from a Tier 1 system but without the associated cost of ownership. These include end-to-end ERP processes, embedded workflows and strong governance, risk and compliance (GRC) controls, as well as robust reporting and performance management capabilities. In addition, Tier 2 solutions continue to provide their long-held advantages of a lower total cost of ownership, greater flexibility, and the ability to be implemented more rapidly than their Tier 1 counterparts. Modern Tier 2 packages designed with multi-site business deployment scenarios in mind also offer ease of use, strong global functionality, and a rich, repeatable footprint based on established business processes and master data management (MDM) stewardship.
Norwood added, “With its true global capabilities, modern business architecture, embedded GRC and MDM functionality, support for flexible deployment models (on-premise, hosted, and on-demand) and a low total cost of ownership, Epicor is well placed as a strategic component of any two-tier ERP strategy. With these dual strategies in place, organisations can retain the benefits of consolidated information, providing greater visibility, as well as drill down to individual transactions, linking together sites, divisions, and subsidiaries around the world in a truly virtual enterprise.
This survey confirms an increasing trend toward two-tier strategies, an area in which Epicor has considerable experience. Benefits come from significant savings that can be achieved through consolidated purchasing, but also during the rollout process to multiple subsidiaries, coupled with lower maintenance and support costs. By reducing the number of ERP packages and instances, organisations can enable more consistent business processes across the entire virtual enterprise.
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