This article is relevant if you are contemplating activating a new organization into your existing NetSuite account, especially if due to a merger or acquisition.
Background
A Non-United States organization already on NetSuite acquired a US company on the PeopleSoft ERP system. My firm was asked to lead the system migration to bring the acquired company onto NetSuite. The acquired organization had a complex accounting configuration as they had their own US operations and multiple entities outside of the United States that needed to migrate to NetSuite.
The acquiring organization (parent) already had many entities (children) in its multi-subsidiary structure. In a hub-and-spoke organization model, they were organized with a central Corporate Finance operation (the hub) with many division Controllers designed to assist a litany of relatively autonomous entities (the spokes) running independent accounting operations. The parent Corporate Finance group worked with each child entity Controller to ensure they closed their books promptly so the parent could close its consolidated books.
The nature of this type of NetSuite implementation can be more challenging than a brand-new implementation. There are more matters to consider, and the risks are different. Thus, we needed to work closely with various actors to determine how to produce a successful NetSuite OneWorld implementation migration.
Scoping the NetSuite Migration
When asked to assist in a major implementation, we must “get our heads into the game.” Thus, there is a natural discovery process to understand the project goals and objectives. Like any type of project endeavor, it’s important to understand the project scope. As we work to understand our client’s existing business situation, we need to understand their stated and not-stated longer-term ambitions. We need to ask an array of questions that can be qualified as follows:
- Actors: we needed to understand who are the major and minor actors that will be driving the project. There are two major parties in this effort: the acquiring company team (parent) and the acquired company team (child). We needed to understand the dynamics between these parties and the project roles members would play.
- Business Functions: we needed to scope out the business functionality that will need to be supported in NetSuite. Since the goal was to leave PeopleSoft, it was straightforward to understand what was currently supported by studying the child’s existing configuration. In our client’s case, they had the traditional General Ledger, Accounts Receivable and Accounts Payable functions. This organization deals in intellectual endeavors; thus, there were no inventory operations. However, the acquired company also had a custom integration to transmit electronic payment files to Bank of America. They also had a fixed asset ledger. These two functions were not in use for the acquiring parent company. There were other considerations, such as purchase orders and an operation related to customer deposit accounting. There was also the use of reporting views that were not natively NetSuite-supported. With new capacities to be integrated, the impact on the parent and all the other sibling configurations had to be analyzed.
- Technical Considerations: the acquiring parent company had an existing NetSuite configuration with which we were unfamiliar. Some configurations and customizations needed to be respected as the new child companies were to be configured. In addition, there are technical considerations for how the multi-entity structure will fit in the acquiring company’s existing OneWorld subsidiary tree structure. These considerations must be addressed carefully to drive the ultimate consolidated reporting results.
- Schedule and TimeZone: a schedule for the desired outcomes had to be outlined. The schedule’s reasonableness is a factor of devotion to the effort — most organizations are busy with existing operations. Thus it is challenging to make the space to produce a new project. Notwithstanding the overall project schedule, there were concerns about how we would work collectively when named project actors spanned nearly 12 different time zones.
- Cultural Risks: Since these parties have not worked closely together, there were cultural concerns. Sometimes called Culture-Clash, individuals may not have the willingness to act cooperatively. We had to work to bring concerns about authorities, roles and responsibilities early in the effort. We then cataloged our observations to help us make grounded assessments to help us predict anticipated future project challenges.
- Technical Risks: like the technical considerations discussed above, wisdom suggests that anticipated and unanticipated technical project obstacles will surely surface that will impede our progress. It’s important to surface all the expected technical concerns so that assessments can be made to determine what will be needed to mitigate. For unanticipated risks, we need to be judicious to make room on the schedule and apply resources to overcome situations that will surely emerge.
- Project Approach: during the scoping exercise, we need to gain agreement and come up with a project approach for how we will work together to produce the outcome. See the section below.
- Investment: once all the matters above were addressed, we had the basis for making a detailed workplan to determine what resources would be required. Resources are primarily skilled individuals holding named roles — but it can include additional NetSuite modules, third-party software services, equipment and the need for travel.
Project Approach
With the scoping effort completed, we discussed our project approach. The project was broken into these major phases:
- Design: the Scoping work above is the first pass at understanding the boundaries of the project effort. The Design required us to produce a detailed specification for the implementation. Here, we elected to use an approach to create a highly organized business-based questionnaire that each organization could answer in written form. We would then put these questionnaires together, side-by-side (click on the image to get a feel for the structure), and lead workshops with members from the acquiring and acquired team to ask clarifying questions and confirm we all had a shared understanding. These workshops helped develop the joint organization team members’ relationships, which addressed our cultural risk considerations. Detailed work was required to figure out the chart of accounts and dimension harmonization (see related article, Best Practices for Modeling the General Ledger in NetSuite). Concerns around the item, vendor, customer and other master file information must be specifically outlined. Transaction processes must be flowcharted to help all parties understand the new processing model. Segregation of duties with respective internal controls must be addressed. Considerations for other impacted actors, such as Regulatory (tax and reporting) Compliance and Financial Planning and Analytics (FP&A), needed to be heard.
- Implementation Configuration: with a quality Design completed, our team now had what we needed to produce the configuration. Working in a fresh Sandbox, we built out the additional entities, enhanced the general ledger structure, activated modules including Fixed Assets and Electronic Banking and worked with the Bank personnel and the child’s PeopleSoft systems integration firm to understand the nature of the underlying acquired firm’s data. The data migration effort required scrubbing the data elements to conform to the new NetSuite target structures. We had to understand existing customizations, including activating several Prolecto License Free technologies that helped with the effort.
- Training and User Acceptance Test: Once the configuration was completed, we needed to work on the training plan — the acquired firm received native NetSuite training — but they also needed our specialized training to understand the nuances of our new configuration. Much of the training ensures the business team is ready for a User Acceptance Test (UAT). We had to develop an outline of what is to be tested with expected outcomes to help ensure that the software is sufficiently exercised. We had to produce a mechanism to capture feedback so that our team could refine the configuration and report the resolution. Because we had to address two different teams, the coordination requirements were more demanding.
- GoLive and Support: with the training and acceptance behind us, we worked on the GoLive. Here, we had to produce a clear understanding of the cutover narrative. In a cutover, we address the open accounts payable and receivable transactions, including the balance sheet. But we also had to address our historical data requirements. Consider my 2013 article Data Migration sequences. Due to the multi-entity nature, we had to produce a tricky historical load to ensure that we could produce consolidated historical reporting that reflected the past and conformed to our target accounting model. Our Firm’s GoLive Support approach is to consider at least two-period end close cycles to ensure that the team members hold the prescribed practices and that the system is trustworthy and under control.
NetSuite Project Leadership
The most valuable element is leadership when I think about how we produce recurring client success. In a more complex implementation, such as the one summarized above, the ability to constitute, scope, define, design, configure, develop, and solve challenges is the driving force for successful action. Indeed, all kinds of concerns will be raised that must be addressed — yet a responsible approach is to be in no pretense that such an endeavor will be easy. To make grounded assessments with narratives that produce alignment between all parties is an essential capacity. The ability to challenge assumptions and make insightful interpretations opens a world for committed action. It is a given we need to have hard technical skills. But in my mind, that is insufficient. I spend much time with my team discussing philosophy and ethics while we work behind the scenes to address the development of courage while we invest in mastering our craft.
I am grateful that our clients ask us to help them with their risky endeavors. It’s a privilege to be invited to such situations, and it challenges our team and me to become stronger. If you found this article relevant, feel free to sign up for notifications to new articles as I post them. If you are contemplating a challenging NetSuite implementation, let’s have a conversation.
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Marty Zigman
Holding all three official certifications, Marty is regarded as the top 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 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.
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