Two-tier ERP is an ERP approach that combines two systems to address the peculiar needs of large enterprises. Under this arrangement, the headquarter will use Tier 1 ERP while other subsidiaries or units under it will use the Tier 2 ERP. Tier 1 ERP offers more customization and functionality than the less resource-intensive Tier 2 ERP. The design of the two-tier ERP system is that information from Tier 2 flows automatically into Tier 1. This system makes it possible for a single source of accurate data for the entire company. The two-tier ERP system is a less expensive alternative to the legacy ERP systems that require on-premise implementations and extensive configuration requirements.