ERP System Guide: When to Use ERP, Shopify, or Both

Enterprise resource planning (ERP) systems connect core business functions such as finance, inventory, orders, procurement, and fulfillment. For commerce teams, the question isn’t only what an ERP system does, but how ERP fits with the commerce systems that manage storefronts, checkout, retail sales, B2B buying, and international operations.

Implementing ERP can carry operational risk when it’s treated as a software project instead of a business strategy. Gartner research predicts that by 2027, more than 70% of recently implemented ERP initiatives won’t fully meet their original business case goals, and as many as 25% will fail catastrophically.

This guide explains what an ERP system is, what it isn’t, and how ERP platforms work alongside and integrate with commerce platforms like Shopify.

What is an ERP system?

An enterprise resource planning (ERP) system is a software platform designed to manage a company’s most essential business processes in the same place. ERP systems can centralize data from multiple business functions.

Whereas companies use systems like customer relationship management (CRM) or accounting software to manage specific areas of their commerce operation, ERP systems are used to manage multiple operational functions together. Functions businesses commonly manage on ERP platforms include:

• Financial accounting
• Procurement
• Inventory and order management
• Supply chain planning
• Manufacturing
• Human resources
• Reporting

The ability to integrate so many key functions can make an ERP system a valuable tool for growing businesses. As a scaling company has to manage more orders, and adds additional retail channels like direct-to-consumer (DTC), business-to-business (B2B), and selling on marketplaces, centralizing operational data can reduce issues such as duplicate data and manual work. A busy team juggling too many tools without integration

ERP systems work on the back end, focusing on the operations of a business. That’s why many commerce brands pair ERP systems with a platform like Shopify. Shopify handles storefronts, checkout, point of sale (POS) and B2B buying experiences on the customer-facing side of commerce, and integrates with ERP systems to keep all key commerce functions connected.

How an ERP platform works

An ERP system uses a central database to connect and integrate data from multiple business functions. Inventory, orders, and finance can rely on a single source of truth instead of drawing from separate records on multiple systems. A shared ERP system can reduce manual data transfer between separate tools, and reduce costly errors that occur when different systems create data conflicts.

Here’s an example of how a workflow might proceed for a retailer using an ERP system:

• A customer places an order
• The order is recorded in the ERP system
• The ERP system updates the inventory to reflect the sale
• The ERP system sends fulfillment data to the relevant warehouse, third-party logistics partner (3PL), or other fulfillment system
• The financial transaction is recorded in the ERP system

ERP doesn’t replace every system. It often connects with ecommerce platforms like Shopify, warehouse management systems (WMS), and finance tools. In the above workflow example, at every step key data can be communicated between the ERP system and other relevant systems.

The free flow of data is enabled by integrations between the ERP and other systems. Systems are integrated using a few methods:

• Native connectors built into the platform
• APIs
• Middleware such as integration-platform-as-a-system (iPaaS)
• Custom integrations

Smaller businesses often favor native connectors or certified apps for speed. High-volume enterprises require middleware or API-led custom architecture to handle complex data mapping. Choosing the wrong method can lead to sync lag or data corruption, so the decision should balance technical resources with long-term scalability.

Types of ERP systems

ERP systems use different deployment models in terms of where the software is hosted and how teams manage it. Here’s a breakdown of the most common deployment models for ERP systems:

In Panorama’s "2026 ERP Report", 73.5% of respondents said their ERP was implemented using cloud deployment, including hosted, managed services, or software-as-a-service (SaaS) models, versus 26.5% on-premise

Each deployment model affects hosting, integration work, maintenance, and cost. For example, cloud ERP systems are vendor-hosted, which reduces internal infrastructure work, and come with lower up-front costs and predictable recurring subscription costs. Self-hosting offers more control and customization, but comes with higher costs all around. 

When deploying a new ERP system, some companies will attempt a monolithic ERP rollout: a single, all-in-one solution meant to work across the entire business at once. Once the ERP is deployed, all business operation workflows are funneled into the system. 

All ERP rollouts carry some degree of implementation risk. According to Gartner, by 2027 more than 70% of implemented ERP initiatives will fail to meet their goals. A monolithic ERP rollout can take more planning and coordination than a phased or modular implementation, and can also carry more risk. For commerce environments with fast-moving inventory, multiple channels, and frequently updated campaigns, there are more potential failure points in a monolithic rollout.

Many commerce brands use a hybrid approach, with ERP managing back-office operations and commerce platforms managing customer-facing workflows.

A hybrid approach lets teams update some systems without replacing the entire ERP environment. Commerce companies can embrace composable thinking: the idea that building systems from flexible and modular components, each capable of independent updates and connections, can help teams connect specialized systems while keeping core operational data in the ERP system.

That’s why ERP cloud migration with Shopify can help avoid the risks of the monolithic approach. Shopify can manage storefront, checkout, POS, and B2B workflows while ERP manages financial reporting and production planning. This setup gives teams separate systems for commerce and back-office operations, connected through integrations

Benefits of an ERP system

In the Panorama Consulting Group study of organizations with at least one ERP system live for a year or more, these were the operational benefits businesses cited the most:

• Productivity and efficiency: Productivity and efficiency were the most common ERP system benefits, cited by 87.3% of respondents. Connected workflows across orders, finance, inventory, and fulfillment can reduce manual handoffs between teams.
• Reduced silos: In the 2026 report, citations of silo reduction rose from 55.2% to 77.4% year over year. When customers, inventory, finance, and supplier data sit in one system, teams can work from the same records instead of reconciling separate sources, without the risk of errors caused by duplicate records.
• Standardized workflows: 67.1% of respondents saw standardization benefits. ERP systems can give departments a shared process for purchasing, order management, reporting, and approvals, which can increase efficiency and reduce training and onboarding time..
• Real-time data.:61.3% reported benefits from real-time data. Instead of relying on spreadsheets, exports, or separate department records, teams can work from current operational data.
• Compliance support: Compliance-related benefits appeared for 60.3% of respondents. ERP systems can centralize financial records, approvals, and audit-related data.
• Improved inventory tracking: 56.3% reported inventory-level improvements. ERP systems help businesses track inventory across warehouses, retail locations, suppliers, and sales channels.

ERP benefits depend on implementation quality, data migration, and integration planning. For commerce businesses, ERP delivers more value when it exchanges accurate data with customer-facing systems such as storefronts, checkout, point of sale, B2B buying experiences, and fulfillment tools.

Do you need an ERP system, a commerce platform, or both?

According to Gartner, 75% of companies’ ERP strategies aren’t strongly aligned with their overall business strategies. Before you even begin the process of choosing software, define the business problems you want the ERP system to solve.

Depending on your business structure, goals, and pain points, your ERP strategy may fall into of of the following categories:

When enterprise resource planning makes sense

An ERP system makes the most sense when operational data and workflows create bottlenecks, stifle growth, or lead to frequent errors and poor customer experiences. A company with a stable commerce setup may also evaluate ERP to improve their back-office operations.

Implementing an ERP system may be the best step when a company faces issues such as:

• Difficulties with multi-entity finance
• Complexity in procurement
• Issues with manufacturing/wholesale operations
• Inventory spread across multiple locations 
• Compliance and audit challenges
• Lack of unified operational reporting
• Issues with supply chain management or inventory management

If spreadsheets and disconnected tools aren’t fixing any of these issues, ERP implementation may help centralize the company’s operational data.

When a commerce platform may solve the more urgent problem

In some cases, the main issue may be commerce execution rather than back-office operations. Technology supporting the business’s ability to sell to its customers may be the issue. 

Signs of a commerce-platform issue include:

• Low storefront conversion rate compared with the company’s benchmark
• Fragmenting at checkout, POS, or B2B experiences
• Slow product launches despite effective project management
• An inconsistent cross-channel experience for customers
• Heavy manual work for team members during merchandising or new promotions
• Customer or promotional data heavily fragmented across channels

If these sound more like your business’s symptoms, the real issue may come down to management of customer-facing channels and overall commerce execution. Shopify can solve these issues with unified commerce, easily syncing data across channels like online checkout and POS. Brands taking advantage of Shopify’s unified commerce capabilities report up to 150% GMV growth.

When a company needs both ERP and Shopify

Some large, complex, or rapidly scaling companies face both operational and commerce-platform issues. In that case, one system may not address every scaling issue. They may need both. An ERP system can provide the system of record for inventory and financial management, while Shopify offers the revenue engine that drives sales, including the storefront, POS, customer relationships, and more.

Together, ERP and Shopify can exchange orders, inventory, customer, and financial data between systems.

ERP integrations 

Now that we’ve looked at the benefits of using ERP and Shopify together, here is some more information on how to integrate an ERP system:

Common ERP systems and connectors

• Shopify’s Global ERP Program: This is a suite of certified ERP apps businesses like to use, especially thanks to their easy integration with Shopify.
• NetSuite: The NetSuite ERP Connector is available in the Shopify App Store. This will sync products, customers, inventory, sales orders, and fulfillment information so a business can easily have both ERP and Shopify running from the same data.
• Dynamics 365 Business Central: An ERP designed for small and midsize businesses, Dynamics 365 Business Central can offer bi-directional synchronization of items or products, including inventory data.
• SAP Business One Integrations: Connecting SAP Business One with a store can synchronize item groups and products for more unified data.

What data should sync between ERP and Shopify

When connecting ERP and Shopify, start with basic measurables, including:

• Products/SKUs
• Pricing
• Inventory levels
• Orders
• Fulfillment status
• Customers (including businesses, if B2B)
• Financial data, whenever needed

Integration approaches

• Certified app connectors: These integrations are tested against a known data model and carry documented sync behavior, ensuring the vendor supports the connection. This reduces the technical burden on internal teams and provides a predictable roadmap for maintenance.
• Partner-led custom integration: Partner-led custom integrations give teams direct access to implementation expertise, which can reduce setup time and integration errors.
• Middleware/iPaaS: Before committing to a middleware solution, look for reviews that specifically mention your ERP system and use case. Generic positive ratings won't tell you whether the connector handles your order volume or sync frequency reliably.
• API-led custom architecture: Though more expensive than other options on this list, custom architecture may be necessary to plug in any gaps, especially when using less-popular software solutions.

ERP evaluation framework template

With so many options like cloud-based ERP and API-based customizations, evaluating ERP systems can be challenging. With that in mind, let’s look at some key evaluation criteria, including what to look for with each:

How to choose an ERP system

Whether selecting a cloud-based ERP system or something more complex, the real challenge comes when moving from legacy systems to deploying a new ERP system in the real world. Successful implementation depends on the research you do beforehand. Integrating core business functions will be much easier to manage with a roadmap for choosing the right ERP system:

1. Map the current systems and pain points

For example, identify gaps with an existing ERP system, or what pain points you want to address by implementing an ERP system for the first time. Knowing what’s broken in various business functions helps a business prioritize key features. Identifying these gaps prevents you from overpaying for features your existing tech stack already handles well.

2. Define source-of-truth ownership

Will your commerce platform or your ERP system end up owning data like inventory, orders, or finance? This is essential for data management. Without clear ownership, inventory or order data can exist in conflicting states across ERP and commerce systems, creating fulfillment errors and reporting gaps.

3. Prioritize the “must-have” workflows

Most ERP systems facilitate some of the most standard workflows, but not necessarily all of the ones your business needs. Make sure ERP systems support your specific “must-have” workflows. Focusing on these ensures the new system supports your core revenue-driving activities.

4. Evaluate the integration path to commerce

Many modern ERP systems fit easily with Shopify, for example. It’s especially helpful to your rollout if there’s an established method to connect the systems, like the NetSuite ERP Connector. A verified path reduces the risk of data silos where information gets stuck between your storefront and your financial records.

5. Score deployment and total cost of ownership

This is where the choices (cloud ERP vs. onsite ERP) will become concrete. Look beyond the immediate and recurring subscription costs and include ongoing maintenance for options like on-premises ERP solutions. This prevents hidden costs from ballooning the budget later.

6. Plan rollouts and change management

Plan for role-specific training before launch. Finance, ops, and fulfillment teams often need separate sessions to map their existing workflows to the new ERP system.