Forward And Commentary
Legacy optimization remains a key component for funding future innovation. Two-tier ERP emerges as one strategy to optimize existing systems while adding innovation. The report capitalizes on the recent Software Insider survey of 235 companies looking at future strategies.
Organizations continue to face an onslaught of business requirements that their existing ERP systems can no longer address. Stuck in the past century, these ERP systems are expensive to run, difficult to upgrade, and impossible to modify for today’s fast changing requirements. Two-tier ERP has emerged as a strategy to enable legacy optimization while reinvigorating the organization’s existing ERP systems.
B. Research Findings
Two-tier ERP refers to a business and technology strategy that enables organizations to keep existing ERP systems at the corporate level while empowering divisions or business units to innovate with a second ERP system. Consequently, two-tier ERP deployments continue to gain favor. Why? Organizations must optimize legacy systems while delivering on business value. In fact, in a recent Constellation Research survey, 48% of respondents indicated that they are considering at two-tier ERP strategy (see Figure 1). These results reflect a 27-point increase from 2009.
Figure 1. Two-Tier ERP Growing In Popularity As A Key Strategy
While today’s two-tier strategies mostly involve on-premises solutions, cloud based solutions will gain favor over the next 18 to 24 months because of their rapid deployment capabilities, constant innovation qualities, and subscription pricing. Organizations challenged by diverse lines of business, multiple localization requirements, or needs to phase in legacy system modernization will find a two-tier ERP strategy one that can reduce costs and provide better business value than a one-size-fits-all solution. Whether SaaS, on-premises, or hybrid, a two-tier ERP strategy will reduce costs, meet new business requirements, and provide better business value. More…