What is Functional Two-Tier ERP?

December 10, 2013

The idea of standardizing on a single on-premise ERP instance globally has failed. As we’ve discussed two-tier ERP is the solution and it typically is deployed as a financial consolidation play(opens in new tab). But with NetSuite SuiteCommerce, it is possible to have a functional two-tier ERP system as well.

Functional two-tier ERP is another powerful application of a two-tier ERP strategy; natively integrating Ecommerce(opens in new tab) with core operational systems (back-end ERP) to meet rising customer expectations for a consistent experience across all touch points, from smartphones to call centers and from tablets to point of sale consoles in virtually any country around the globe. Several NetSuite customers like Williams-Sonoma, CA Technologies, Magellan, Igloo and others have successfully used NetSuite SuiteCommerce to expose their inventory in storefronts in a variety of languages across a multitude of interfaces.

In short, it means running NetSuite for managing operational ecommerce and POS systems and Oracle or SAP ERP systems for global financial consolidation(opens in new tab). But why do you need this functional two-tier? Why can’t you just extend your existing Oracle or SAP implementation to achieve the same results and build storefronts? Because, it is hard, it takes much longer time and it costs a lot more.

For example, Williams-Sonoma, a high-end American homeware empire with $4 billion in revenue, expanded into Australia with four of their brands opening stores in Sydney’s Bondi Junction: Williams-Sonoma, Pottery Barn, Pottery Barn Kids, and West Elm. With leases already signed and a short runway to the opening date, a combined ecommerce, point of sale (POS) and ERP system couldn't be delivered using the Oracle systems Williams-Sonoma was running in the U.S. But using NetSuite's SuiteCommerce, Wiliams-Sonoma(opens in new tab) developed what was needed for launch within the required timeframe: all four stores' POS systems, and all four ecommerce websites in pixel-perfect form in about seven months— and all of it running off a single SuiteCommerce back end. It was easy to deploy NetSuite because of two fundamental reasons: the SuiteCommerce platform provided the necessary functionality and, according to Williams-Sonoma, the NetSuite engineers went the extra mile.

Similarly, CA Technologies leveraged the power of SuiteCommerce(opens in new tab) to develop two ecommerce sites for two product lines in record time on top of an antiquated (and thus unexpandable) SAP back office system, that was running inventory and other back-office operations. CA Technologies chose NetSuite instead of relying on SAP because SAP could not realize CA’s multi-pronged goals of rolling out a new recurring billing model and expanding business opportunities and rapid global expansion, while managing costs.  SAP proved to be too expensive with CA Technologies’ focus on SMBs for their new commerce sites. CA Technologies also wanted to leverage channel partners to go-to-market rather than rely on direct sales and thus wanted to be able to educate them on the new sites quickly. The NetSuite SuiteCommerce platform proved to be the most suitable for the purpose given that it was built to enable rapid development and deployment of multi-channel commerce sites while leveraging the strength of the cloud. Explore more about NetSuite and our view on two-tier ERP strategy, and chime in with your questions and comments.

As always, l look forward to your comments and questions.

-Kishore Bhamidipati, Director Product Marketing, NetSuite

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.