Should you include NetSuite in your ERP evaluation? We recently published our top five ERP systems based on a number of different criteria. Today, I want to focus on NetSuite and discuss whether this is a viable ERP solution that companies of all different sizes and industries should be considering, or if it’s just a limited system that’s meant for small and midsize organizations. I am going to address some of these questions in this blog.
First of all, I want to talk about the strengths. I will give you an objective, independent, balanced view of what we’re seeing with our clients that are evaluating and ultimately implementing NetSuite.
1. Maturity of the product itself. That’s one of NetSuite biggest strengths right now given all that’s going on in the marketplace, all the turmoil with the big flagship ERP vendors shifting over to their ERP cloud or SAS solutions, Oracle included. They acquired NetSuite and now Oracle owns NetSuite which can bring its customers a proven and very mature SAS solution.
It started off as a SAS and cloud solution before SAS and cloud was cool. It’s been very established compared to some of the other systems that are out in the marketplace. When you look at functionality, the integration, the seamless nature that you would expect to see from a complete ERP system, that is one thing that NetSuite brings to the table, that other systems, other SAS, and cloud systems don’t necessarily do.
2. The ownership of the small and mid-size market. A lot of companies that have outgrown QuickBooks enterprise or you know, their old legacy systems that were the tier-three type of ERP systems are finding the NetSuite can be a good, viable alternative and a relatively low-cost entry point for small and mid-sized companies that don’t have the budgets or the risk tolerance for an SAP or an Oracle or Microsoft Dynamics.
In addition to midsize companies, we’re also seeing in the last three or five years, a lot bigger companies, enterprise type companies in the past would only really be considering SAP, Oracle, maybe Microsoft 365. They’re now considering NetSuite as well.
3. High adoption rate in the market. We see a lot of companies that are going with NetSuite, especially like I said before, in the small and midsize market, but even in the enterprise market, we’re starting to see more and more companies adopt or adapt NetSuite and implement it successfully within their organizations. One thing that NetSuite is doing is they’re proving they can scale for bigger companies and larger organizations.
4. Oracle now owns NetSuite. The reason that can be perceived as strength is because now you have the money and the resources behind NetSuite the money and the resources from Oracle, to not only market the product, but to invest in R&D, and really push the product to the next level.
Those are the strengths, and the reasons you should consider NetSuite as one of your shortlist options for your ERP evaluation and why we consider it one of the top five ERP systems in the marketplace.
Now, as is the case with any ERP system, there’s also some negative liabilities or aspects you should at least be aware of when evaluating this product.
1. I mentioned that Oracle owns it which could be a strength, but it could also be viewed as a negative. There are companies out there that don’t like working with Oracle, they find their pricing and contract structures too complicated and cumbersome, and difficult to work with. We have not seen that yet in NetSuite space, so that remains to be seen. They have left the NetSuite channels alone for now.
If you’ve had frustration working with Oracle in the past, the question is will that be an issue if you were an Oracle customer by association with NetSuite? We see companies in the manufacturing space want to find a fit with NetSuite, but they just can’t quite get the functionality they need out of the system in the manufacturing space when it has complex, engineering to order, heavy product management types of functionality.
2. A lot of times organizations find that it’s not quite as robust as some of the other systems in the marketplace. This is one thing to be aware of, if you’re in the manufacturing space. It’s pivotal to dig into some of those manufacturing shop floors, types of business processes and make sure that you see what the product can and can’t do.
Having said that, I will say that in the last few years, they seem to have made a pretty big, concerted effort to improve and shore up some of that missing functionality in the manufacturing space. This is probably the biggest liability or the biggest risk with choosing and implementing NetSuite is their whole implementation model.
3. Historically, NetSuite implementation model was a call center type of support model where you choose NetSuite, you decide you’re going to implement it, you call into the call center to get your one hour that you have scheduled, get your one hour of training, and then in the end, your one hour of coaching on how to set up the system.
This can be okay for some smaller organizations but if you don’t have a certain amount of maturity, bandwidth, and sophistication, and skillsets internally, that call center support model during implementation can be very difficult. A lot of companies need more hands-on experience, people that can help really connect the technology to the business processes, and to the organizational components of their organizations.
This is something we have to be aware of – do we have the right implementation model; will that be enough for us? And if it’s not, how do we augment what Oracle and NetSuite direct are providing to us, either with another NetSuite reseller, or VAR that’s providing NetSuite specific resources, or some other third-party independent technology-agnostic type firm that can help implement the solution.
That’s one thing many NetSuite clients hire us for is to help them implement the product because there’s not a ton of support, at least not yet available in the implementation ecosystem of NetSuite at the moment.
4. One final consideration related to NetSuite, are the potential hidden costs. This is true for any SAS product, any ERP cloud solution, you’ve really got to understand what you’re signing up for, not just for your current cost structure for what you’re licensing now. But what about in the future? The thing is to understand what those hidden costs might be. It is important to try to negotiate as much of those hidden costs as you can.
As you grow as you add users, as you add modules and functionality, as you integrate other systems, increased data transaction volumes, all that stuff? How is that going to add up over time? What we see with some NetSuite customers over time is that those costs balloon to the point where it becomes cost-prohibitive, or it reaches a tipping point where they want to consider other lower-cost ERP alternatives.
Here at Third Stage, we are happy to answer any questions or provide feedback regarding NetSuite. Our team helps clients through their ERP evaluations and their NetSuite implementations as well as other types of ERP implementations. Please feel free to reach out to me directly.
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