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Business Growth and System Limits – Efficiently Integrating Subsidiaries with Cloud ERP

In business, as in everyday life, good communication and transparency are the solid foundation for a healthy relationship between parent and subsidiary companies. However, the dynamics of growth often bring challenges that arise faster than IT can manage. Companies face the task of integrating newly acquired subsidiaries into an existing SAP landscape without the necessary infrastructure, resources, and time. This…

Cloud ERP Integration: A Strategic Advantage for Mid-sized Businesses  

Using a centralized Cloud ERP system for the integration of subsidiaries is a smart strategic decision. This step not only allows for the harmonization of data and processes across the entire corporate network but also reduces administrative efforts and significantly lowers total operating costs. For CXOs and project managers, this means achieving more control and efficiency with less effort—a clever move, we believe. 

What are the benefits of Cloud ERP for integrating subsidiaries  

A centralized system landscape, e.g., via cloud-based ERP, has many advantages. A centralized ERP solution significantly improves data migration by simplifying data integration, which ensures data integrity and prevents system breaks. At the same time, unified IT infrastructures through the use of ERP systems lead to a significant reduction in operating costs. These systems also offer high flexibility and scalability, allowing them to keep pace with company growth and adapt dynamically to changing business conditions. Additionally, the SAP Integration Cloud enables effective linking of SAP systems with subsidiaries, maximizing the benefits of cloud technology. 

Efficiently integrate Cloud ERP – with foresight and our tipps 

Implementing a Cloud ERP solution must be carefully planned and executed. How to do it? Here are our practical tips! 

1. Change Management: Announce that changes are coming 

Introducing a new software or decommissioning an old one means you are changing something. If employees do not know or understand what it means for them, they will not be fully engaged and will lack the necessary care. Therefore, explain the objectives, context, and procedures in detail. Show them the processes and workflows you envision. 

2. Project Management: Assemble the right team 

From headquarters, you need a management member to “endorse” the strategic importance of the project, a project manager to plan and manage the project operationally, and a process owner to design the process landscapes to be reproducible and capable of depicting new business models. From the subsidiary, you need the managing director to represent its interests and also take over the “patronage” of the standardization, another process owner who knows the local conditions, and an IT expert who is familiar with the local infrastructure. 

3. Subsidiary Inclusion: Involve them  

It is important to involve the management and employees of the subsidiary. Then they will support the change. Open exchange with the subsidiary also provides the headquarters with valuable information about country-specific processes, workflows, or customer structures. In one country, for example, payment by check might be common, while in another, everything may already be digital. 

4. Drive the Template Approach: Prefer stereotypes 

Whether and to what extent local conditions can be mapped in the standard or deviate from it depends on the individual case. It is a bit like walking on a balance beam. The balance must be maintained: in our case, between standardization on the one hand and freedom for local conditions on the other. However, the general rule is to stay as close as possible to the standard for core processes – preferably based on so-called templates. 

5. Automate processes: Use middleware  

To automate processes, proceed as follows: first set up the processes, then live them. Like in football, after a while, you are played in. It is time to map the processes across systems. Use middleware as a data hub for this purpose – for example, SAP HANA. This mediates between applications. 

6. Properly plan service: Insist on a key user 

If you have already helped your subsidiary to standardized processes, you naturally want everything to run smoothly. Therefore, insist on having a key user “sit” in the subsidiary. Alternatively, a consulting company can take over this role. 

7. Cloud ERP Solution: Keeping up-to-date 

Even though a Cloud ERP solution can be quickly connected to the headquarters and the effort and costs are predictable, it needs to be kept up-to-date. However, this can be done quickly and easily, as there are quarterly updates, such as a function that represents the drop shipment business, or an add-on with which assets such as equipment and machinery can be managed. 

How do subsidiaries benefit from the Cloud Solution 

In addition to the general benefits of a centralized ERP system, subsidiaries benefit particularly from the following aspects: 

  • High adaptability: Cloud ERP systems can be flexibly adapted to the specific business processes and requirements of each subsidiary. 
  • Global reach and local compliance: They enable international expansion while simultaneously meeting local legal and operational requirements. 
  • Adoption of best practices: Subsidiaries can easily implement industry-leading practices, enhancing performance. 
  • Reduction of complexity: The systems reduce the complexity typically associated with using ERP systems. 
  • Fast and cost-effective implementation: The cloud-based nature of the ERP allows for a swift and cost-efficient setup. 
  • Independence from local IT infrastructure: Subsidiaries do not require their own extensive IT infrastructure. 
  • Transparent cost structure: Users benefit from a fixed monthly rental price and user-based costs. 
  • Mobile use: The systems are designed to be accessible from anywhere and at any time via mobile devices. These specific benefits make Cloud ERP an attractive solution for the flexible and efficient integration of subsidiaries into the corporate network. 

Mother and Daughter – Smartly connected for a Flexible Future  

Choosing a Cloud ERP system for the integration of subsidiaries is a strategic step towards a future-proof, flexible corporate structure. It is an investment that pays off not only today but also in the future, strengthening your market position. Learn more about how a Cloud ERP system can help your company gain more agility. Our experts look forward to developing the best strategies with you. Just contact us!

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