Introduction

Many businesses that run the SAP ERP application as their corporate ERP (Enterprise Resource Planning) system are leading to a two-tier model to support their subsidiaries. With this two-tier model, they prefer a subsidiary ERP system that meets subsidiary functional requirements and is less expensive to deploy, easier to change, and simpler to manage. Yet it also captures corporate requirements, which typically include regulatory transparency, operational metrics visibility, use of centralized business functions, and key data rollup. 

So, businesses are choosing the SAP Business ByDesign integration solution as their subsidiary ERP system for those reasons. This powerful solution meets functional and industry requirements, fast to deploy, offers a low cost of ownership and provides deep integration with SAP ERP used at head­quarters (“HQ SAP ERP system”). 

Challenges Faced by Subsidiary Systems as Companies Expand 

Fortune 5000 companies are growing their footprint to take advantage of market opportunities. As a result, they are doing the following: 

• Opening new offices in various geographies and expanding existing sales and distribution operations. 

• Acquiring new companies to consolidate their market position or enter new segments. 

• Setting up joint ventures. 

These expansions increase the number of subsidiaries, requiring IT solutions that: 

• Maintain the subsidiary’s current business model efficiently. 

• Scale and adapt to changing needs. 

• Provide transparency to HQ for risk, compliance, and operational performance tracking. 

• Support intracompany transactions. 

• Facilitate a shared-services structure, such as centralized purchasing. 

• Maintain financial consolidation for global reporting. 

• Enable rapid deployment at new subsidiaries for quick business integration. 

Implementing a Two-Tier ERP Model 

IT budgets are generally small at most of the subsidiaries. Adding, these subsidiaries typically don’t have adequate IT resources to deploy and support a corporate ERP system. The most desirable approach for these subsidiaries is to standardize on an integrated business solution that satisfies their functional requirements and is less expensive to deploy, easier to change, and simpler to manage. On the other hand, it still must 

• Meet regulatory transparency requirements. 

• Provide visibility into operational metrics. 

• Utilize centralized business functions. 

• Deliver key data rollup. 

This deployment model, where corporate and subsidiaries have different ERP systems by choice, is called a two-tier ERP model. 

SAP Business ByDesign Integration with SAP ERP – The Right Choice 

SAP Business ByDesign – a single, integrated business management solution that helps in improving control, efficiency, and visibility within the subsidiary and across the organization. Adding to its rich functionality, it integrates with the HQ SAP ERP system like no other SaaS offering available. Hence, you get an integrated view of the entire operation, your data is synchronized, and cross-functional processes become more efficient.  

SAP Business ByDesign provides a deep portfolio of integration because SAP understands SAP ERP better than anyone else. The combination of rich functionality, SaaS delivery model, and analytics, as well as support for multiple integration scenarios, makes SAP Business ByDesign an ideal solution for a two-tier ERP model. 

SAP Business ByDesign Functionality 

SAP Business ByDesign offers comprehensive functionalities for subsidiaries, ensuring efficient operations and seamless integration with corporate systems. 

• Financials

Manage finances across multiple cost centers and legal entities, supporting budgeting, forecasting, and compliance. Efficiently handle Cost Center Accounting, Multi-Company Financials, and Accounts Management tasks like supplier invoices, payments, customer invoicing, and collections, automating routine tasks to improve cash flow management.

• Big Data Analytics and Reporting

Real-time analytics and reporting provide insights into business performance, financial health, and operational metrics. Integrate data from various sources for Informed Decision-Making and Advanced Data Integration, enhancing proactive market responses with comprehensive analytics, predictive modeling, and machine learning.

• Inventory Management and Warehousing

Manage inventory levels, warehouse operations, and logistics across multiple locations. Streamline processes such as receiving, put-away, picking, packing, and shipping, using barcode scanning and mobile devices for accuracy and efficiency, optimizing Inventory Management and Warehousing operations and order fulfillment.

• Purchase Planning

Simplify procurement from requisition to payment, supporting supplier management, purchase order creation, and contract management for cost-effective sourcing. Enhance Purchase Planning and Supplier Collaboration through integrated portals, improving supplier relationships and supply chain resilience.

• Manufacturing and MRP

Manage production with integrated material requirements planning (MRP), capacity planning, and shop floor control, ensuring smooth and efficient operations. Maintain product quality with integrated quality management features, performing inspections and managing Manufacturing and MRP non-conformances.

• Sales and CRM

Manage the entire sales cycle, from lead generation to order fulfillment, with tools for sales forecasting, pipeline management, and opportunity tracking. Strengthen Sales and Customer Relationship Management (CRM) functionalities, tracking interactions and service requests to enhance satisfaction and loyalty.

• Project Accounting

Plan, execute, and monitor projects with tools for project planning, resource allocation, time tracking, and expense management, ensuring timely and budgeted completion. Track project costs and revenues, supporting Project Management and Cost Control through budgeting, cost allocation, and variance analysis for financial control.

• Supply Chain Management

Manage the supply chain from procurement to delivery with tools for demand planning, supply network optimization, and logistics management. Improve accuracy with advanced forecasting tools, aligning Supply Chain Operations, Demand Planning, and Logistics through historical data and predictive analytics. 

SAP HANA Infrastructure Benefits 

SAP Business ByDesign is hosted by SAP in the cloud on SAP HANA infrastructure. Using SAP suite-in-a-box business scenarios allows for quick implementation timeframes across best practice functionality for areas like: 

• Cash and Liquidity Management 

• Demand Planning 

• Financial Closing 

• Order to Cash 

• Fixed Asset Management 

Benefits of SAP Business ByDesign for High-Growth Companies 

SAP Business ByDesign is an SAP cloud solution aimed at the mid-market. High-growth global companies are using to enable growth across different geographies. Subsidiaries of global organizations are finding that this cloud ERP solution: 

• Is easy to implement and provides a quick return on investment. 

• Can be integrated with SAP S/4HANA (often used at Head Office). 

• Is available in 150+ countries with 20 country localizations and operates in 13 languages. 

• Can be implemented in short timeframes, making it a great solution for growing subsidiaries of multinational companies. 

• It provides all the advantages expected from SAP cloud applications, including security, scalability, and functionality. 

Not many people know that over 250,000 of SAP’s customers are small to medium-sized businesses. As a growing Australia/New Zealand subsidiary of a multinational organization, you will achieve significant business benefits by implementing this solution to run your local business.  The other benefits include the following, 

• Ensuring Data Security and Compliance Across Subsidiaries 

Ensures data security and compliance with local and international regulations through features like data encryption and user access controls, providing peace of mind for both subsidiaries and headquarters. 

• Customization and Flexibility for Diverse Business Needs 

Offers customization options to meet the unique needs of different industries, allowing subsidiaries to tailor the solution to their specific requirements, whether they are in manufacturing, retail, or services. 

• Utilizing Real-Time Analytics and Reporting 

Real-time analytics and reporting capabilities help subsidiaries and headquarters make data-driven decisions quickly, improving overall business performance and strategic planning. 

• Achieving Cost Efficiency and Scalability 

The SaaS model contributes to cost savings and scalability, with a subscription-based pricing model, reduced IT infrastructure costs, and the flexibility to scale according to business needs. 

• Simplified Implementation and Ongoing Support 

Implementing SAP Business ByDesign is straightforward, with comprehensive training and ongoing support ensuring that subsidiaries can effectively use the system and achieve rapid business integration. 

• Integration Scenarios and Best Practices 

Common integration scenarios between SAP Business ByDesign and HQ SAP ERP include financial consolidation, shared services, and intracompany transactions. Following best practices ensures smooth integration and maximizes the benefits of a two-tier ERP model. 

• Future-Proofing Your Business with SAP Business ByDesign 

Helps future-proof your business by staying updated with the latest technological advancements and industry trends, ensuring continuous improvement and innovation. 

• Enhancing User Experience and Training 

Employees can utilize the system efficiently because of its user-friendly interface, plenty of training materials, community forums, and customer support services. 

Conclusion 

If you want to know more about this and implement it to benefit your organization, KaarTech consultants are here to guide you. Our consultants are experts and available anytime for support. Contact us to get started on enhancing your business operations with SAP Business ByDesign and SAP ERP. 

 

 

FAQ’s 

1. What is SAP Business ByDesign?

SAP Business ByDesign is a cloud-based ERP solution designed for mid-sized businesses, providing integrated management across subsidiaries and corporate systems.

2. How does SAP Business ByDesign integrate with SAP ERP?

It offers seamless integration with HQ SAP ERP systems, ensuring synchronized data, streamlined processes, and a unified view of operations.

3. What are the benefits of using SAP Business ByDesign for subsidiaries?

Benefits include rapid implementation, low cost of ownership, easy scalability, real-time analytics, and comprehensive functionality tailored for high-growth companies.

4. What are the integration scenarios with SAP Business ByDesign?

Common scenarios include financial consolidation, shared services, and intracompany transactions, ensuring smooth integration and efficient operations across the organization.