How to Use GROW with SAP Public Cloud for Subsidiaries While Keeping the Core on RISE with SAP Private Cloud
Introduction: Why Two-Tier ERP Is Gaining Global Momentum As organizations expand across regions and markets, they face a critical ERP challenge: how to preserve a highly controlled, customized ERP core while enabling subsidiaries to operate quickly and efficiently. This challenge has led to the rapid adoption of the two-tier ERP model, where: • •
RISE with SAP Private Cloud supports core enterprise operations GROW with SAP Public Cloud powers subsidiaries and smaller business units
This approach delivers centralized governance at headquarters while allowing local teams the flexibility they need to scale. By 2026, two-tier ERP is expected to become a standard architecture for global enterprises pursuing digital excellence.
Why Enterprises Keep the Core on RISE with SAP Private Cloud Supports Complex and Industry-Specific Operations Headquarters typically manage advanced business processes that require customization and deep system integration. Industries such as utilities, manufacturing, logistics, healthcare, and the public sector often depend on tailored ERP landscapes. RISE with SAP Private Cloud enables:
• • • •
Industry-specific extensions Custom process flows Advanced data models Integration with specialized enterprise systems
This level of flexibility is essential for managing complex operations at scale. Controlled Upgrades and Strong Governance Corporate ERP environments require stability. Private cloud deployments allow enterprises to plan upgrades strategically, ensuring business continuity during critical periods such as financial close, audits, and regulatory reporting. Most organizations manage this environment through a centralized SAP Center of Excellence (COE), supported by SAP COE services that ensure governance, compliance, and lifecycle control. Acts as the Enterprise Control Center The private cloud core serves as the central system for: • • • •
Master data governance Global compliance enforcement Consolidated reporting Cross-entity business processes
This structure ensures consistency across all regions and subsidiaries.
Why Subsidiaries Benefit from GROW with SAP Public Cloud Rapid Deployment for New and Growing Units Subsidiaries often need to become operational quickly, especially in new markets or postacquisition scenarios. GROW with SAP Public Cloud allows ERP systems to be deployed in weeks using preconfigured best-practice processes. This speed significantly reduces time-to-value. Standardized Processes with Minimal IT Dependency Public cloud ERP delivers ready-to-use workflows that support finance, procurement, sales, and operations without heavy customization. Subsidiaries can operate efficiently without requiring large internal IT teams. SAP manages infrastructure, upgrades, and innovation cycles, allowing local teams to focus on business growth. Lower Cost and Simplified Operations
Public cloud ERP follows a predictable subscription model and removes the need for complex system maintenance. This makes it ideal for subsidiaries with limited budgets or technical resources.
How the Two-Tier SAP Cloud Model Works A successful two-tier ERP strategy relies on seamless integration between the private and public cloud environments. Master Data Alignment Headquarters typically governs master data such as customers, vendors, materials, and charts of accounts. Subsidiaries synchronize this data using SAP-provided APIs and integration services. Financial Integration and Consolidation Subsidiary financial data is transferred to the core system for consolidation and enterprisewide reporting. This ensures compliance with corporate standards and regulatory frameworks. Intercompany Transactions Two-tier ERP enables efficient intercompany processes, including billing, inventory transfers, and cross-company procurement, using standardized SAP integration templates. SAP Business Technology Platform (SAP BTP) SAP BTP acts as the integration backbone, supporting APIs, event-based communication, workflow extensions, and data orchestration between both ERP tiers.
Governance: The Key to Two-Tier ERP Success Governance is often the deciding factor in two-tier ERP success. Organizations rely on SAP COE services to manage: • • • • •
Process standardization Integration governance Data consistency Customization approvals Change and release management
Without strong governance, subsidiaries risk deviating from enterprise standards, leading to data inconsistency and compliance issues.
Industries Benefiting from Two-Tier ERP
Utilities Core regulatory and smart grid operations run on private cloud, while service subsidiaries adopt public cloud for rapid onboarding. Manufacturing Headquarters manages global planning and engineering, while subsidiaries handle sales and distribution through public cloud ERP. Healthcare Compliance-heavy operations remain on private cloud, while clinics and labs deploy public cloud for speed and simplicity.
Key Business Benefits of a Two-Tier ERP Approach • • • • •
Faster integration of acquisitions Reduced operational costs for subsidiaries Global standardization with local flexibility Continuous innovation through public cloud updates Strategic control over core enterprise systems
Conclusion: Building a Scalable and Future-Ready ERP Landscape A two-tier ERP strategy using RISE with SAP Private Cloud and GROW with SAP Public Cloud enables enterprises to scale confidently while maintaining control, compliance, and operational efficiency. Organizations that adopt this approach are better positioned for global growth, digital resilience, and long-term enterprise transformation. Contact:
[email protected] Website: www.2isolutionsus.com
