S/4HANA Cloud Two-Tier ERP FAQ's

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Welcome back to the next blog in the SAP S/4HANA Cloud 2-tier ERP blog series. 

In this blog let us look into the key topics that are covered in the two-tier ERP knowledge base article that has been published with the two-tier ERP FAQ’s (Link - SAP Note 2603912).

This blog is to introduce you to the knowledge base article that was published as part of SAP note 2603912, which gives you FAQ's in two-tier ERP. These FAQ's have been from our various customer projects, workshops and our own learning working in the two-tier ERP projects.

Before getting into the details of the knowledge base article, let us first understand what is two-tier ERP and how is it going to benefit the customer.

Two-Tier ERP

SAP’s Two-Tier deployment provides enterprises with an opportunity to standardize the end to end business processes across multiple tiers. you could correlate multiple tiers to headquarters and subsidiaries which are typically having two different landscapes since they are two different legal entities. Both entities may belong to same corporate group and hence would want to run seamless business process across both headquarters and subsidiaries.

Utilizing SAP S/4HANA Cloud for their Tier 2, customers get the benefit of Software as a Service (SaaS) which can be implemented by standard template thereby reducing the cost, removing shadowed IT by having pre-configured solution.

Two-Tier ERP FAQ

In this FAQ, I would present to you the various questions that you may have in two-tier ERP starting from the very generic questions to the LOB specific questions.  I have articulated this from the learnings that we have had during the customer workshops and during the implementation phase of a project.



The FAQ has below sections.

1. General

The generic queries with respect to Two-tier ERP like the definition, SAP’s offering in the two-tier ERP space, release details, activate methodology, two-tier assets.

2. Implementation considerations

This section covers the implementation aspects of the project like activate methodology, fit to standard approach for two-tier to validate the customer requirements against the product scope, data migration activities involved in a two-tier project, localization content for two-tier ERP etc.

3. Finance

Under finance the FAQ is covered under 3 umbrellas namely –

• Visibility scenarios – Plan data upload and cash visibility of subsidiary at headquarters.


• Consolidation scenarios – Consolidation options available in a two-tier deployment model


• Customer payments – Centralized customer payments application for headquarters and subsidiaries.

4. Manufacturing

Under manufacturing the below scenarios are covered.

Basic Manufacturing

• Subsidiary as a production unit and internal supplier to HQ


• 3rd party Warehouse management integration


• Integration with MES

5. Procurement

In manufacturing the below scenarios are covered.

External & Basic Internal procurement

• Procurement directly by Subsidiary with process visibility to HQ


• HQ as internal supplier to subsidiary via central contract


• Replenishment

6. Sales

In sales, the below scenarios are covered.

Subsidiary as Local Sales Office

• Sale from Local (Goods & basic Services)


• Sale from Central Stock (drop shipment from HQ)


• Returns handling with Credit & Debit Memos support


• Sale from HQ Direct procurement from Subsidiary

In addition to the above topics, the FAQ also covers the master data and analytics approach in a two-tier deployment model.

Related information :

The latest release in Two-Tier ERP is SAP S/4HANA Cloud 1802 and the release highlights for the same can be found in the blog - Two-tier ERP 1802 release highlights