The basic concept behind Two-Tier ERP is a pretty easy one to grasp. ERP stands for Enterprise Resource Planning. The clue indeed is in the title; companies run two ERP systems at the same time as each other. Sometimes when companies use two systems consecutively, they both operate using the same software package. At other times, a different kind of ERP software will be used for each of the Two-Tier regimes. Companies believe that there are advantages to adopting the Two-Tier ERP system as a means of improving business planning and then operational effectiveness.
Generally, though larger companies adopt the Two-Tier ERP system as smaller ones do not typically believe that they would need to use two ERP software packages in tandem with each other. Small businesses may only have a few branches, offices, and stores so that it would be more practical to stick with a single ERP system to be used throughout their company. However, if the management of smaller companies want to have tighter control of how they run their business planning and manage their resources, there is nothing stopping them switching to a Two-Tier ERP system.
Arguably, it is larger companies that would benefit most from switching to a Two-Tier system. Larger enterprises that have already have a Two-Tier system in place have a greater ERP for all their branches across the country (or even internationally) and a smaller ERP that covers for all of their local offices or stores. This gives management the big picture of all activities across the whole business and the small picture as well.
The data from both sets of ERP then have to be collected together to provide an accurate picture of how the business is performing taken as a whole. Using the Two-Tier ERP does involve installing more software and analyzing more data yet contains information that is useful for management teams.