Choosing NetSuite

NetSuite was my bread and butter for a good bit of my time in consulting, but I don't talk about it much these days, because my clients are emerging brands - they're often not ready. However, recently, I had multiple brands reach out who were considering or already implementing it, so let's dive in.

TOPIC #1 - NetSuite can be outside of many budgets, BUT...

You probably already know this. NetSuite is not cheap. However, there are options like the BPO (business process outsourcing) program that can help bring costs down to a level that is competitive with other small-to-medium size business solutions.

Oracle creates a NetSuite instance, which is implemented for your company, for a BPO partner. The instance is owned by the partner, not you (but you can have it transferred anytime). Because the instance isn't owned by you, and you're getting a substantial discount, your involvement in the instance is limited in certain ways - generally, the partner is doing your accounting.

When you are ready, you can transfer the account (and lose the big discount) and be an admin, have as many of your people in NetSuite as you like (and want to pay for), etc.

Once you sign a contract with "Oracle direct" (non-BPO), you can't go back. You can still have a BPO partner do your accounting, but you won't be a "BPO account."

It's also important to note that the BPO discount phases out somewhat as you approach $20M. If you're getting a quote, ask the partner how much you'll pay once you reach $20M so you aren't surprised later as you grow.

TOPIC #2 - At what revenue mark does NetSuite make sense?

This is a trick question - your revenue levels are less important here. What is important is the complexity of your business.

• Do you have multiple entities and need an easier consolidation?

• Are you audited, and need better controls?

• Do you manufacture yourself?

Is your inventory management system able to handle all your:

• SKUs?

• Locations?

• Landed costs?

If you're making big adjustments, your current system isn't working. What your revenue, or more importantly, your profit, WILL dictate, is whether you can afford NetSuite.

Sadly, many brands were looking to downgrade from NetSuite in 2023. And even though you pay Oracle monthly, your contract with them is YEARLY. It's not a simple monthly decision whether to continue or not, and the data migration takes time to move to a new system. I absolutely love working with NetSuite, AND it's a big commitment.

TOPIC #3 - What time commitment is required to use NetSuite?

When you're doing proper inventory management, and especially if you have controls and approvals (you should!), there are many transactions that must be recorded (and approved):

• Purchase Order

• Item Receipt

• Vendor Bill

• Sales Order

• Item Fulfillment

• Customer Invoice

That's for just ONE widget to be purchased and sold - and only if it's turnkey inventory!

You'll need people covering:

• Shipping & Receiving

• Accounting

• Purchasing

• Sales

If you're able to run your business using reporting from a 3rd party, do that before you implement a robust inventory management system. You can get incredibly accurate results, but it will require a big time commitment.

TOPIC #4 - Customizing NetSuite

You might be thinking that you just paid good money for an ERP, and you should take advantage of it. You're right. You should. You should take advantage of it in the most streamlined and simple way possible to get the results and data that you need.

That means, hands off the customization (barring a TRUE NEED).

Customization /=/ Configuration

Configuration is setting all the toggles and checkboxes in the best way possible for your company. Customization means custom code.

Which means you need people to:

• Write that code.

• And document that code.

• And maintain that code.

I worked in a NetSuite instance where a manufacturer/retail brand created an Customer Invoice and an Customer Payment for every. single. individual. purchase (ecommerce and brick-and-mortar). I cannot tell you how slowly that instance loaded. Certain reports would not even run. I was terrified that something would break, because they had a lot of customization, and the person who coded it left.

Please, don't be a horror story. 😱

TOPIC #5 - How to Prepare for a NetSuite Implementation

Step 1 - Clean up your data

If your data is clean, your implementation will go so much more smoothly. Inactivate old vendors, add tax IDs. Refine your list of SKUs. Give yourself some time to do this now, so you don't have to do it while you're dealing with the rest of the implementation.

Step 2 - Decide whether you want to go outsourced or insourced

If you are open to outsourcing, explore BPO (business process outsourcing) partners. You can save on software costs and leverage the fractional, scalable outsourced model.

Step 3 - Talk to various Oracle partners

I will tell you there are pros and cons to different service providers. I have seen horror stories. Talk to a few different people and make sure you get someone who is well-versed in your industry. I would ask for a referral from a similar company. See if they'll let you see a sandbox with a set-up similar to what you will need.

Step 4 - Document your processes

Part of an ERP implementation is what's known as "discovery". Discovery can take twice as long as it should because the client doesn't have a great understanding of their current processes or doesn't put the right person in the meeting to explain them. A quick flowchart will work wonders here to anchor the conversation. Think about your "order to cash" and "procure to pay" processes.

Step 5 - Go through the contract with your chosen provider line-by-line and ask questions. 

If something isn't clear and they clarify verbally, get it in the contract. Ask them:

• "Is there anything that is not scoped in that you think we really need?"

• "Is this timeline reasonable and do you have a cushion built in?"

This is one way to try and avoid budget and schedule overruns.

Step 6 - Have fun!!!