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Hub & Spoke Deployment

Hub & Spoke Deployment

The simplest definition of "hub and spoke" is that it is a model for integrating the business management software solution used at a company’s headquarters with the systems used by its subsidiaries and branch offices.

Hub & Spoke Implementation Approach

The Hub and Spoke concept refers to a parent or holding company that uses one business software system (the hub), which is integrated with another systems used by its subsidiaries, smaller initiatives, divisions or country operations (the spokes) in a decentralized application and strategic landscape.

  • Gaining business insight
  • Sharing responsibility for services
  • Enabling interdivision transaction
  • Responding proactively to business events

Together, the hub and spokes form an integrated system that can progress forward as one unit.

 

  • Microsoft Dynamics AX works well as an all-in-one solution for both a parent company and its subsidiaries. It is not always practical, however, for a company to use one solution for the entire organization.

    Since subsidiaries are only responsible for part of the organization’s overall data processing requirements, it may make more sense for them to use a different solution than the one used at headquarters, depending on the circumstances.

    Companies that were acquired, for example, may have their own processes and IT systems in place. Or a subsidiary company may offer products or services that have special IT requirements. In such cases, using one system at the parent company and a different system at the subsidiaries or branches, and then integrating them, can offer many benefits.

    • Centralized Financials - In this scenario, financial transactions such as general ledger journal entries are created by the spoke systems and transmitted to the hub.
    • Centralized Procurement - In a typical implementation of centralized purchasing , requisitions (or purchase requests) are submitted by the spokes to a centralized purchasing department at the hub. The hub places the purchase orders with the vendor and communicates status back to the spokes. Receiving can be performed either at the hub or the spokes. Invoice matching is performed at the hub.
    • Distributed Fulfillment - In this scenario, customer orders are captured by a centralized order processing department, however, they are fulfilled by shipping from one or more spoke warehouses. Shipping information is communicated back to the hub for invoicing. Availability information is also regularly communicated from the spokes to the hub.
    • Simplicity - Individual spokes are only responsible for fulfilling a portion of the company’s overall data processing requirements, making the applications simpler and smaller than centralized monolithic applications
    • Designed-to-Fit Solutions - Spokes can run the software that best meets their specific needs, rather than software designed to satisfy the more expansive requirements of the enterprise hub

    • Local Control & Accountability - Some companies find it easier to do most of the administration and support locally because it minimizes language and time zone barriers. Increased local control can also improve accountability

    • Lower Cost - Implementation costs are reduced because the spokes run simpler software which is quicker and easier to implement. Upgrades are easier and less painful when spokes can be upgraded one at a time

    • Existing Application Maintenance - As companies grow, “hub and spoke” can be an effective way to organize and expand IT resources without replacing existing software. Collecting and consolidating information at the hub provides management with adequate visibility into divisional operations, but without the pain and distraction of replacing core applications

    • Better Performance - Local applications running on local servers with smaller user counts generally yield significant performance benefits

Why Microsoft Dynamics AX?

Microsoft Dynamics AX is the world’s fastest selling business application and according to Gartner – the IT industry’s leading independent research organisation – is currently the best ERP product available for mid-market organisations.

Offering extensive and robust functionality, Dynamics AX delivers low total cost of ownership (TCO) through its strong integration with other Microsoft products and technologies.

Why Microsoft Dynamics AX

Dynamics AX is designed to make your people and processes more productive. True productivity requires an end-to-end enterprise resource planning (ERP) package that your people will actually use. With Dynamics AX, you can provide a familiar interface that quickly connects your people to the right information and tools to work faster and smarter. 

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