Enterprise Resource Planning Blogs by SAP
Get insights and updates about cloud ERP and RISE with SAP, SAP S/4HANA and SAP S/4HANA Cloud, and more enterprise management capabilities with SAP blog posts.
Showing results for 
Search instead for 
Did you mean: 
What’s new in 2 Tier ERP:

This blog articulates the key features of 2 Tier ERP offerings in 1705 release of S/4 HANA Cloud. Let us go in to each process to understand What’s new in 2 Tier ERP.

Master Data:

With the current release SAP, has delivered pre-packaged content for replicating Customer Master/Supplier Master/Material Master from Headquarters (on On-Premise) to Subsidiaries (on Cloud). Creation of new master data as well as change of existing master data can be orchestrated from the Headquarters to the subsidiaries. The Direct Replication Framework (DRF) is pivotal in facilitating this process. The provision of mapping values between the master data in headquarters and subsidiaries is a very useful feature that has been provided. For instance, a Customer is created at the Headquarters corresponding to a Sales Area, however, in the subsidiary, that same customer must assigned to a different sales area. This kind of requirement can be mapped easily during data replication, so that the Customer when replicated in the subsidiary has the desired Sales Area data. Presently the pre-packaged content takes care of the following:

  • Master Data replication using DRF – HQ runs MDG and subsidiary runs S4HC

  • Master Data replication - HQ runs SAP ECC or S/4 HANA on Premise and subsidiary runs S4HC

The key value proposition delivered by SAP in S/4 HANA is the Customer/Vendor Integration (CVI) that provides a single point of entry to create, display and edit master data like Business Partner, Customer, Vendor, Employee etc. A single Business Partner with different roles eliminates Data Redundancy. For more detail on these usecases, refer to the below blog:




SAP S/4HANA Cloud deployed in subsidiaries provide agility, flexibility in financial processes and quicker book closure locally. Additionally, it enables subsidiaries to share their financial data with the HQs (Headquarters) seamlessly for performing group consolidation and profitability, enabling local units to handle cash locally with global visibility into cash situations.

It comes packaged with cloud based consolidation solution to take care of a company’s legal International Financial Reporting Standards (IFRS) based consolidation requirements.

Notable 2Tier ERP Finance usecases which can be realized with the current release: 

  1. Connectivity to OnPremise SAP BPC on SAP BW from a subsidiary running S/4HANA Cloud

  2. Cloud based consolidation on S/4HANA Cloud

  3. API based approach to make subsidiary running S/4HANA Cloud, financial data available to Headquarters for group consolidation

  4. Upload of plan data into S/4HANA Cloud

  5. Cash position of subsidiary visibility at HQ via APIs

For more details on these usecases, refer to the below blogs:

  1. https://blogs.sap.com/2017/05/09/s4hana-cloud-2tier-erp-series-3-financial-consolidation-in-2-tier-e...

  2. https://blogs.sap.com/2017/05/10/s4hana-cloud-2-tier-erp-series-4-api-based-financial-consolidation-... 



Enterprises may choose to adapt a 2 Tier model for different reasons which may vary from growing businesses to acquisitions. With this, the degree of autonomy that the subsidiaries will have could vary. On one hand, subsidiaries may be working as independent sales office with complete ability to start the sales activity, progress to fulfillment as well as handle the possible subsequent processes like returns etc. On the other hand, we may have subsidiaries who have a more collaborative business process model with the headquarters (HQ) in which the subsidiary acts as a mere sales office with sales presence, whereas the delivery of the material is the responsibility of the HQ.

Notable 2Tier ERP Sales Use cases which can be realized with the current release is

  1. Subsidiary as Sales Office - Sell from Stock at Subsidiary

  2. Subsidiary as Sales Office - Sell from Stock at Subsidiary – Return

For more details on these use cases, refer the below blogs:




SAP S/4HANA Cloud deployed in a 2-tier model supports the organization and subsidiaries to have optimized procurement processes. 2-Tier landscape can help Procurement Managers in Organizations to have real time visibility into contract monitoring, and improve effectiveness.

To streamline the Procurement Processes in a standard, Headquarter -subsidiary setup, we can consider the following few scenarios which can leverage the powerful streamlined procure to Pay functionality with SAP S/4HANA Cloud:

  1. Subsidiary running procurement processes independently with reporting at headquarters

  2. Subsidiary using the central contract which the headquarters negotiated globally for all subsidiaries.

For more details on these use cases, refer to the below blog:



Go through the below video link for the details.



Stay tuned for the next blogs to highlight the key features in 1708 release with more details on Integration APIs.

For more information on SAP S/4HANA Cloud, check out the following links:

Follow us via @Sap and #S4HANA, or myself via prakash.karkihallimath or @MHaendly, srivatsan.santhanam and Former Member