Getting the Promised NetSuite Value

cloud computingIt can happen to any business that uses ERP / CRM software, and NetSuite is no different: you feel you are not getting the promised value.

In general, users or businesses are challenged when they are not getting NetSuite to do whatever it is they want NetSuite to do.  Most often, the software is used as an excuse for a weakness in a business practice issue.  Old practices may not work with a tool like NetSuite which has been designed to accommodate and integrate streamlined processing flows.

NetSuite’s nature is real time.¬† This means that at any point in time, the system can provide you status on any question you have in your business.¬† But this only is true if you have practices that ensure that the system can provide trustworthy information. ¬†NetSuite supports powerful practices but weak ones¬†can lead to breakdown in several departments.

Employees Don’t Trust the System

The most common challenge encountered with businesses that ship product is when employees question the inventory numbers within NetSuite. ¬†They don’t trust the system and hence they develop a number of counteracting, “check and verify” processes.¬† For example, an organization may not be using purchase orders to buy inventory.¬† Hence they may not be using receivers to¬†check-in¬†inventory to stock.¬† These functions work to predict when inventory is due to arrive and increase the inventory balance upon receipt. ¬†When goods are shipped, inventory is diminished and the overall balance decreases.¬† If you are not tracking the inventory receipts, you will have a negative inventory balances.

A negative balance in inventory leads sales people to not trust the inventory on-hand number. Sales people will call into the inside sales team or the customer service team to make inventory level inquiries. ¬†But these folks don’t trust the system either so they call the warehouseman down on the inventory floor to determine what the balance is.¬† This communication goes upstream to the original sale person who then insists that the warehouseman¬†creates an allocation or reservation on the inventory that is there.¬† Soon, the warehouseman says that he needs a reservation system because all these inquiries are coming at him and he feels out of control.¬† The customer service team feels they need a better inquiry tracking system including complaint tracking because of the negative calls. ¬†Management looks as this and says, “This is just a mess and the system is broken!”.

Before You Blame the System, Consider This…

NetSuite is a highly integrated and fully relational product. That means that one problem will likely affect other parts of the business.¬† Is NetSuite responsible for not using the Purchase Order system as it was designed? ¬†You say, ‚ÄúBut wait, NetSuite should not have let us use inventory without purchase orders!”. Perhaps.¬† Perhaps not.¬†¬†NetSuite can be configured to allow vendor bills for goods purchased and this may or may not have impact on the inventory balance.¬† Would not it be better to say that the business does not have a solid practice to create purchase orders and receivers that allow NetSuite to keep the inventory in balance?¬† Does the negative inventory balance reveal that the practices are not aligned with the way that the software was designed? ¬†We think so.

Management may want to blame NetSuite; if they just had a better ERP system, they wouldn’t be in a mess. However, if they had used the system properly as designed, they would find they would get the value that was promised.

How to Solve Common NetSuite Challenges

The first step to solve a NetSuite challenge is to fully diagnose the problem. This typically requires study by an individual or team who knows business process flows and can understand the core of the malfunction. Once the root problem is discovered, steps are taken to develop new practices that will utilize the tools the way they were designed.  This may include an assessment of the effort to clean up whatever is needed to run smoothly.

The best way to prevent a common NetSuite challenges is to have good implementation. There are many users who implement NetSuite by themselves.¬† See this article about “Implementing NetSuite without a Partner? Exercise Caution!”¬† While going it alone is possible, it is also a risky proposition, because there are many moving pieces that come together with NetSuite‚Äôs integrated system ‚Äď sales, marketing, orders, shipping, invoicing, cash receipts, etc. ¬†A misstep in one area, as we have seen, leads to a breakdown in other areas. ¬†To prevent this from the start, it is important to bring on a¬†NetSuite expert¬†that can plan the implementation properly to ensure processes run flow smoothly. In essence, this is getting people to coordinate effectively, and establishing the best way to use NetSuite‚Äôs integrated system. ¬†If you take proper steps to make sure that everyone is working in a coordinated, deliberate, and purposeful fashion, you will avoid blaming your ERP or CRM system and get the promised value.

Copyright © Marty Zigman 2012

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Marty Zigman

Holding all three official certifications, Marty is Southern California's NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 25 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to setup a conversation.

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| Tags: , , , , , , , , , , , , , , , , , , , | Category: CRM, ERP, Management, NetSuite, Strategy | 1 Comment

One Comment

  1. Posted January 30, 2012 at 11:17 am | Permalink

    Identify with employees not trusting the system and perhaps everyone jumping at the chance to blame the system.

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