Design Con 2015

Improving Visibility Into Subsidiary Operations, Part 2

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stochastic excursion
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Stock Keeper
Re: The autonomy of the subsidiaries needs to be maintained
stochastic excursion   3/8/2011 11:31:46 AM

Good coverage of excellence in software development: the focus is on the right tools for the right job.  A system that can integrate multiple organizations, to the degree that the headquarters adds value to the business processes of the subsidiary, has the qualities of an industry standard.

Sheila Zelinger
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Re: The autonomy of the subsidiaries needs to be maintained
Sheila Zelinger   3/8/2011 1:02:49 AM

Enabling the autonomy and the flexibility of the subsidiary so that it can best meet the needs of its customers is the essence of a 2-tier ERP architecture.  The choice of solution at the subsidiary and the extent of integration is a matter of governance. What's important is that the subsidiary have a choice of solutions so that it can select the one that best-fits its needs (e.g., functionality, budget, timeline); and that the points of integration are driven by business needs, carefully balancing between the need for subsidiary independence and the headquarter's desire for network-wide visibility.  

User Rank
Supply Network Guru
The autonomy of the subsidiaries needs to be maintained
prabhakar_deosthali   3/7/2011 5:48:37 AM

While it is welcome to have an integrated approach for the ERP systems of the head quarters and the subsidiary companies for the financial data consolidation and easier reporting for the top management, we also need to preserve the autonomy of the subsidiary in decision making especially for the activities like purchase. Since the managemnt of the individual sunsidiaries is responsible for day to day running of the business, any imposing of say a paryicular vendor or a particular rate for an item purchase will hamper the the strategic decision making powers of the individual subsidiaries. So let them run their own business and make it profitable by using their own strategies for purchase and sale. They should not have a feeling of the big brother watching.

Sheila Zelinger
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Re: Best of Breed
Sheila Zelinger   3/6/2011 8:19:25 PM

Dave,there is definitely a role for best of breed applications to extend the functionality of ERP.  The ideal solution, which is one that SAP offers, integrates not only the ERP systems of subsidiaries and headquarters, but provides a technology platform that enables integration of other applications, irrespective of vendor.  Thus, true business network integration.

Dave Sasson
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Supply Network Guru
Best of Breed
Dave Sasson   3/6/2011 4:25:19 PM

Sheila, thanks for your insight.  I agree that an integrated solution is the best means to provide the necessary visibility.  However, I would argue that in many cases a best of breed approach can offer a lot more benefits and functionality than the single ERP approach.  There are many factors to analyze in making a determination on which approach is best, but I would add best of breed to your options versus only single or 2-tier ERP options.      

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