June 27, 2013
I recently had the opportunity to spend some quality time with NetSuite in San Jose at its customer forum — SuiteWorld. The event gave me a long, overdue deep-dive into their current strategy and the chance to speak with many of their customers one-on-one.
The big announcement from the event was the availability of its manufacturing solution. The evening before the event started I had a good conversation with our Sourcing Analyst Liz Herbert — who spends a lot of her life focused on the SaaS providers — and asked her why NetSuite was not growing more quickly. Her response was that its lack of a manufacturing solution is partly to blame. So when it was announced by CEO Zach Nelson the next morning, it certainly helped to fill me with confidence about its future.
NetSuite made it clear that the full benefit of its solution is realised when you adopt the full suite (ERP, CRM, Web commerce etc.) when the single view of data and customer and finance and product are all in the same core system/dB. While I am sure that certainly is the case (and it was well demonstrated across many different customers) where does that leave customers who choose the best-of-breed approach or who have a number of legacy systems? For me, this is another reason why NetSuite has not penetrated the large enterprises as well as they might have. Large, multinational or global organisations live in a heterogeneous environment. Their “single view of product” or “single view of customer” comes from using third-party analytics tools, which annuls NetSuite’s argument for using the complete platform for most enterprises.
That said, NetSuite now has a number of large multinationals on the platform — some even as their core ERP solution. The addition of the manufacturing solution will certainly help it grow its business, particularly with larger enterprises.
So what are the benefits of NetSuite? Here’s what its customers told me:
- Faster to implement: They had it up and running MUCH faster than the traditional ERP solution. Don’t get the idea that it will take a few weeks — it is still likely to be a six-month rollout, but that’s saying as much about the pain of moving off your current solution compared to the time it takes to get NetSuite up and running.
- In the long run, the future capabilities are as important as the current ones: One of the real selling points of SaaS is the fact the upgrades happen without any work on the customer’s behalf. But this is often quite a meaningless concept, for with any software solution, you are buying the current capability, not any future functionalities. Nevertheless, I spoke with plenty of customers who could tell me what they can do differently since going live — i.e. the new, better, faster things they can do today they could not do when they went live — and they did not have to go through any major, time-consuming, expensive upgrades. This is powerful and should be considered in any ERP business case.
- The eCommerce capabilities are strong: I spoke with a number of NetSuite customers who are using much of the platform, including the web commerce capabilities. Being able to link these directly into the ERP solution and leverage a single customer database from the CRM solution is very powerful — particularly for mid-sized firms.
What would I be asking for if I was an existing or potential customer? Well, there was a lot of talk by Zach Nelson about how “SAP is in Florida at their customer event talking about a database” — he was referring to HANA, of course. My comment to Zach was that the reality is that SAP is talking to their customers about how they can improve their businesses by providing real-time analytics — and painting a vision of the future where the application itself will make the decisions for the business, which was not discussed by NetSuite at the event (well —– not in the sessions I attended!).
For most organisations, simple application decisions are the least of their concerns – they want to know how to best serve their customers across multiple channels and improve that experience. While NetSuite can help to address this business challenge, the way they pitch the message is not the conversation the market wants to hear. Where NetSuite should be focusing their attention is how they can help their customers improve their business, and this is where you should focus your attention when selecting your next ERP, eCommerce, CRM, or manufacturing platform.
If you are looking for great research into sourcing SaaS solutions, check out: