How to Choose the Right ERP Architecture
Centralised or Decoupled Design?
Let’s get one thing straight—this article isn’t for anyone new to ERP systems. If you’re still figuring out what an ERP does, this isn’t the place to start. This article is for those who’ve already done their research, committed to implementing an ERP, and are now on the verge of a critical decision: how to structure it.
The architecture you choose will shape how you manage and grow your business for years to come, so it’s vital to consider your options carefully now, before going live. Switching architectures later is not only costly but can also disrupt operations, taking time that few businesses can spare.
At Commerce Thinking, we work with some of the biggest new luxury brands in the industry to help them optimise their ERP systems, processes, and overall operations. Whether it's scaling your system as your business grows or fine-tuning your architecture to remove inefficiencies, we know the intricacies of ERP inside and out. And we’ve seen firsthand how choosing the right architecture design from the start can make all the difference in unlocking the full potential of your ERP.
In this article, we’re going to dive into two distinct architecture choices: keeping NetSuite at the heart of your ecosystem or opting for a decoupled approach where it plays a more supportive role. Each option has its merits, but the right choice will depend on your business’s complexity, scalability needs, and future goals. Let’s explore both in detail to help you make an informed decision that will serve you well both now and in the future.
Option 1: NetSuite as the Beating Heart of Your Ecosystem (Daisy Chain)
When NetSuite is placed at the centre of your architecture, it acts as the engine driving your entire business. Every piece of data, from sales orders to inventory updates, flows through NetSuite before being passed along to other systems. This design is ideal for businesses that have outgrown basic operations and are looking to introduce more complexity, efficiency, and control.
This isn’t just about automating processes. It’s about unlocking capabilities you didn’t even realise you needed—until your business hit a growth spurt, that is. For brands managing multiple sales channels, warehouses, or international logistics, having NetSuite as the ‘single source of truth’ ensures everything stays in sync.
How It Works
In this architecture, NetSuite operates as the central hub, ensuring all systems communicate through it. Whether it’s your commerce platform, warehouse management, or finance, every transaction passes through NetSuite, allowing it to handle the heavy lifting. Here’s a closer look at how it functions:
Shopify Orders: Every order placed on Shopify is sent straight into NetSuite, where it’s processed and tracked. NetSuite updates your inventory, triggers fulfilment requests to your 3PL, and ensures that refunds are handled efficiently.
3PL: NetSuite communicates directly with your 3PL, managing fulfilment, returns, and inventory updates. This ensures your warehouse always has the latest data, and all fulfilment processes are synced with the rest of your operations.
Financials: Payments, cash sales, and financial reporting are handled seamlessly, with NetSuite ensuring that every penny is accounted for across your entire system. The direct link with Blue Onion ensures payouts and reports are generated in real time.
In this setup, NetSuite becomes the beating heart of your business, orchestrating every moving part and giving you a unified, accurate view of all your data.
The Benefits
Unlock Advanced Business Logic: One of the biggest advantages of having NetSuite at the centre is the ability to manage complex workflows. Take order consolidation, for example. Brands who have customers who place multiple rapid-fire orders during flash sales. Without a centralised ERP, or for example an OMS, consolidating these into a single shipment is nearly impossible. With NetSuite, this logic is built-in, helping to save on logistics costs while improving customer satisfaction.
Control Over Inventory: With NetSuite as the gatekeeper of your inventory data, you can control exactly what stock is shown on your commerce platform. Want to reserve stock for specific sales channels or ensure there’s always a buffer in case of high demand? NetSuite makes this possible, allowing you to avoid overselling and disappointing customers.
Seamless Reporting: All data flows into NetSuite first, which means your reports are always based on the most accurate and up-to-date information. Whether it’s sales, financials, or inventory performance, you’ll have a single source of truth, making it easier to get actionable insights.
Scalability: As your business grows and you add new sales channels, warehouses, or suppliers, this architecture will scale with you. Having everything funnelled through NetSuite ensures you won’t lose control over your operations as your business becomes more complex.
The Drawbacks
Time Sensitivity: The biggest potential downside of having NetSuite at the centre is that it creates a time-sensitive dependency. During high-traffic periods, such as flash sales or peak seasons, all your systems are relying on NetSuite to process transactions quickly. If NetSuite becomes a bottleneck, it could slow down fulfilment and negatively impact the customer experience. (This can be avoided using racemode for peak seasons like BFCM, read more about that here.)
Increased Complexity: Having NetSuite manage everything adds complexity to your operations. This requires your team to have a deep understanding of the system and its integrations. Without proper training and system maintenance, issues could arise as your business grows, causing inefficiencies.
Use Case Example
A big sales-driven DTC brand we work with was facing a unique challenge during their flash sales. Customers were placing multiple orders in quick succession to secure products. The result? They were fulfilling multiple shipments to the same address, driving up logistics costs. By implementing NetSuite as the central hub, they were able to consolidate these orders before sending them to the 3PL for fulfilment. The system grouped orders for the same customer, reducing shipping costs and improving the customer experience.
Additionally, by routing inventory data through NetSuite, they gained control over their stock levels. They could ensure the website was only displaying available inventory, preventing overselling during high-traffic events. This wouldn’t have been possible without a centralised ERP managing both inventory and sales data in real time.
Option 2: Decoupling NetSuite from the Middle (Point to Point)
While having NetSuite as the central hub works wonders for many businesses, it's not always the right choice. Some brands benefit more from a decoupled architecture, where NetSuite acts as a supporting player rather than the core system. This design is all about speed and simplicity—ideal for businesses that don’t need complex workflows but value rapid, real-time operations.
In this setup, your commerce platform (like Shopify) and 3PL (like Radial) handle the bulk of the day-to-day operations directly, while NetSuite sits in the background, managing less time-sensitive tasks like reporting and financial summaries.
How It Works
Unlike the centralised model, this architecture removes NetSuite from the critical path of your transactions. Orders are sent directly from Shopify to your 3PL, and NetSuite receives the data later on, typically in batch processes. Here’s a breakdown:
Direct Shopify to 3PL Integration: Orders placed on Shopify are sent directly to your 3PL in real time. Fulfilment happens immediately, and inventory is updated without waiting for NetSuite.
Middleware for Data Sync: Instead of NetSuite processing every transaction individually, data from Shopify is sent to a middleware database (such as SQL), which batches orders and syncs them with NetSuite on a scheduled basis (often hourly or daily).
NetSuite’s Role: In this setup, NetSuite still plays an important role but is mainly focused on reporting and financial data. It collects (summary) orders, returns, and payments from Shopify and Radial, giving you the information you need without getting in the way of real-time operations.
This design keeps things lean and fast, allowing your business to scale while avoiding the operational bottlenecks that can occur in more complex systems.
The Benefits
Speed: Without NetSuite handling every transaction, this architecture speeds up order processing and fulfilment. Shopify and your 3PL communicate directly in real time, which is essential for businesses that prioritise fast delivery or operate in high-volume sales environments.
Simplified Operations: This decoupled model reduces the complexity of your tech stack. By removing NetSuite from the operational flow, you cut down on the number of systems involved in each transaction, making it easier to manage day-to-day operations. For many businesses, fewer moving parts means fewer opportunities for things to go wrong.
Lower Costs: Since NetSuite isn’t required to handle real-time transactions, you can potentially use a lower-tier licence or minimise infrastructure costs. By syncing data in bulk, you avoid putting unnecessary strain on NetSuite, which keeps costs down while still giving you the reporting and oversight you need.
The Drawbacks
Multiple Sources of Truth: One of the biggest challenges in this design is the lack of a single source of truth. Your commerce platform holds the latest sales data, your 3PL manages current inventory, and NetSuite handles summary financial data. While each system has accurate data, reconciling these different sources can be tricky, especially if they don’t always agree.
Limited Complexity: This setup works well for simpler businesses that prioritise speed and don’t require advanced workflows. However, it’s also a viable option for more mature brands with established tech stacks that already include specialised enterprise tools like order management systems to cover specific needs. For businesses needing detailed inventory controls, multi-channel coordination, or custom business logic, the absence of NetSuite as the central hub can make implementing complex workflows—such as order consolidation—more challenging.
Use Case Example: Simplified Operations for Smaller Brands
Let’s say you’re running a small to medium-sized B2C brand with a single sales channel (Shopify) and one warehouse. You don’t have the same complexity as brands with multiple sales channels or warehouses, and you need your operations to move quickly and smoothly. In this case, having Shopify communicate directly with your 3PL is the best choice.
For a brand like this, NetSuite still plays a critical role in backend operations, but you don’t need it processing every individual transaction. Instead, it gathers data in bulk at regular intervals, allowing you to get the insights you need without slowing down fulfilment. You can avoid costly system bottlenecks while keeping your tech stack simple and easy to maintain.
A decoupled architecture like this works well for brands that don’t yet need advanced business logic, multi-channel inventory controls, or order consolidation. You still benefit from NetSuite’s reporting and financial capabilities, but you won’t have to deal with the overhead of managing a more complex system.
Which Design is Right for You?
Deciding between these two architectures is more than just a question of current business size—it’s about planning for the future. If you're looking to grow, scale into new sales channels, or manage increasingly complex workflows, you need to think about future-proofing your operations.
Future-proofing and as we’ve outlined before, going all in on an ERP implementation gives you the best chance at success.
NetSuite as the beating heart offers the most flexibility and control in the long term. While this architecture is more complex to manage today, it unlocks the advanced business logic and detailed inventory control that become essential as your brand scales. It’s the better choice if you expect to add new warehouses, integrate additional sales channels, or introduce global operations in the next few years.
However, if your business is focused on speed and simplicity, decoupling NetSuite might be the more practical option for now. This architecture allows you to keep things lean and fast without investing in more complex systems than you need. But—and this is important—moving from this simpler setup to a more centralised system later on can be a difficult transition and not one we’d advise.
As your business grows, making the shift from a decoupled architecture to one where NetSuite plays a central role will involve rebuilding much of your infrastructure and running two architectures in parallel during the transition. This isn’t just time-consuming, it’s costly and complex.
That’s why it’s so important to plan ahead. Even if your current needs don’t require NetSuite as the core of your operations, think about where your business will be in 3-5 years. If you’re expecting rapid growth, or if there’s even a chance you'll need to handle multiple sales channels, introduce new distribution centres, or enter new markets, then it might be worth investing in the more complex architecture today to avoid a costly overhaul later.
At Commerce Thinking, we work closely with brands to understand both their current needs and their future goals. We don’t just help you optimise your ERP architecture for today—we help you build a system that can grow with you, so you’re never left scrambling to redesign your operations when it’s too late. Our experience working with some of the biggest new luxury brands means we know how to design systems that are ready for the next stage of your business journey, ensuring you're always one step ahead.