Tiered ERP Systems and How They Have Evolved

ERP or Enterprise Resource Planning is a business management tool that helps an organization manage its business process and day-to-day operation effectively as well as efficiently. ERP software integrates all important aspects of a business, from procurement of raw materials to management of stock, warehouse management, distribution and sales, accounting and finance management, human resource and customer relationship management. All of these aspects are managed in one single software. The objective of an ERP system is to provide the organization with a centralized view of all the business’s data and processes. This helps business managers in making the right and informed decisions with the help of real-time decisions. An ERP system not only reduces the cost of management but also increases productivity and adds to efficiency with the help of automation and real-time visibility of business processes. 

There are many types of ERP systems but today let’s talk about the Tiered ERP system. So, what is Tiered ERP? A Tiered Enterprise Resource Planning system is an ERP which is designed in a way that it consists of multiple tiers or multiple levels of development. These kinds of systems are used by organisations whose scale of business is very vast, having a complex business process and a big network of users. The tiers in tiered ERP systems are differentiated by the level of access and the functions it provides to its users. So, let’s know about the levels of tiered ERP systems.

Generally, it is divided into three major levels, namely the top tier, the middle tier and the bottom tier.

• The Top-tier: As, the name suggests, the top-tier system is mainly used by the members of the top-level management. The top tier, also called the corporate tier, provides the management with a comprehensive look at the business’s entire processes. The ERP provides the management with real-time updates on data that helps them in making business decisions. This tier also includes financial management, strategic planning and business intelligence modules for the top-level management to work accordingly.  

• The Middle-tier: This level of tiered ERP is also called the business unit. The middle level of management uses it to provide a more intensified view of a business’s units. This tier is used by middle-level management to provide data and information on areas such as operations, human resources and supply chain management. It helps the managers to make decisions regarding operations and the needs of a specific department. 

• The Bottom tier: This level of tiered ERP is also called the departmental or plant tier. This system is generally used by employees that are working at operational levels. It provides access to only specific functions of the business such as managing the schedule for production, management of inventory and keeping a check on the production quality. 

A tiered ERP system includes the ability to customize and adapt the system to meet the needs of the organization, which helps in improving data accuracy and consistency and increases efficiency as well as productivity. Some, advantages of a tiered ERP system are as follows:

• Improved Scalability: A tiered ERP system allows the organization to scale with ease to meet the growing business’s needs and demands. As there are multi tiers in this system, the organization will always have the option to add new tiers with the need and expansion of the business. This also won’t have a negative impact as each tier has a different function and is operated by a different level of management.

• Greater Flexibility: Using this business management tool, an organization can work with full flexibility as each level has a different tier which meets its specific requirements. So even if new tires are added, the system can adapt to the needs and demands of that specific department making it easy for businesses to focus on other important aspects. 

• Cost Savings: Generally, when new software is bought by a business, some pre-installed features that might not be of use to the business, should also be bought. But the Tiered ERP system gives the business the right to choose and only purchase the required modules. This helps the business in reducing unwanted costs and can use this amount for a more important aspect. 

• Better Integration: ERP systems are known for better integration, but there might be a doubt if different tiers will integrate together or not. The answer is yes. The tiered ERP system can seamlessly integrate with all the tiers, which helps the business in eliminating waste of time and improving the communication of data and information between different business units.

• Simplified Maintenance: As all the tiers in the business will have a separate tiered ERP system, it helps in the seamless maintenance of the system. This is because any problem or damage in one system won’t hamper the overall business system of the organization. Also, any change required in a specific tier can be done without hampering the data and time of other tiers. 

• Better User Experience: As now all levels have a personal tiered ERP system, the management of each level can focus on providing the users with the best and most personalized experience. Specific customers of a specific department can now get attention rather than being together in a group of all the customers of all departments.  

Evolution of Tiered ERP

As the scalability and flexibility of ERP systems have increased over the course of time, the concept of tiered ERP has also evolved. Earlier, businesses used to have a rigid monolithic ERP system which could meet all their requirements in one single package. This approach led to choosing a complex management system which was difficult to manage.

But with time, the businesses started to realise the difficulties they were facing from the monolithic ERP system, so they began searching for a more easy and flexible system. So the tiered ERP system’s concept came out as the best alternative that could eradicate the limitations of the previous system. Now, the business could implement a number of small and specific ERP systems that can be customized according to the needs of the specific department, rather than using a single ERP system that was made for the entire organization in one.

In the present time, the business can choose from a never-ending range of ERP systems that are specifically designed to meet the business’s needs. They can merge different systems to create a new customized ERP structure that meets the needs of their specific requirements. So, as businesses continue to grow and evolve, even new and innovative ways will be discovered to manage business operations using ERP systems.