Oracle NetSuite ERP Implementation Challenges Revealed [Common Risks and Pitfalls]

oracle netsuite is one of the leading erp systems in the marketplace but there's a lot of reasons why you should not implement this solution so this is a video you need to watch before you embark on a potential netsuite implementation [Music] my name is eric kimberling i'm the ceo of third stage consulting we're an independent consulting firm that helps clients through their digital transformation journeys and netsuite is one of the most common erp systems in the marketplace especially for small and mid market companies and it's a commonly used system but there's a lot of reasons

why you may not want to implement the solution and to be fair netsuite is actually rated number one on our top ten list of top erp systems in the marketplace it's an independent ranking objective ranking of top systems in the market and to view more about why it's rated number one i encourage you to download the 2021 digital transformation report which i've included links to below so there's some positives for sure about netsuite in terms of the maturity of the product it's a cloud or sas type of solution software as a service that is that's

been around for a long time it's been focused on the small admin market now for close to 20 years and as i mentioned before it has a strong install base and is commonly used by a lot of different organizations so there's definitely some upside to using that suite which is why it's number one on our list of top 10 erp systems for 2021 however there are a lot of trade-offs just as is the case with any sort of erp solution and it's important to recognize what those trade-offs are and what those risks are to ultimately

determine whether or not this system is right for you and that's what i want to talk about here today [Music] one of the most common challenges with netsuite implementations is the relative inflexibility of the product so because it was a product that was initially built in the cloud and built as a software as a service type of solution it isn't nearly as flexible as a lot of on-premise systems or even some of the newer cloud systems that are out there now for a lot of organizations that can be a good thing a lot of small

and mid-sized companies or new startups that don't have mature business processes and are really just looking for standard processes that they can start to deploy to scale their businesses that might be okay that might be a good fit for your organization but if you're a larger organization if you're a complex organization a diverse organization with a lot of different needs and capabilities or some unique secret sauce that makes you different than other organizations in the marketplace you may find that netsuite isn't as flexible as you need it to be so if you're a company that

values flexibility the inflexibility of netsuite is something you want to pay close attention to now one of the other common challenges with oracle netsuite implementations that we've seen with our clients is the degree of change and change management issue that a lot of organizations face so because of the standardization and the relative lack of flexibility that i mentioned previously that creates a lot of change management pain for a lot of organizations so in other words you're not able to change the software as much as you might with other systems so it's going to force you

by definition to change your people and to change your processes to fit the technology and that shifts the risks from the technology itself now and it puts more pressure on you from a organizational change perspective and also an operational perspective so even though the user interface looks good it's easy to use it's intuitive in many ways it has a pretty modern look and feel for the most part even though it has those strengths from a technology and user adoption perspective it can be very difficult from a change management perspective in terms of changing processes and

really adapting to the way that the system works which may look very different than the type of business processes that you may have within your organization one thing that netsuite is very good at is sales and marketing they have a very strong marketing message and they certainly have a good product to back it up but they're very good at marketing in a way that can mismanage expectations and one of the really good and brilliant marketing messages they have is this whole concept of suite success and it's a proprietary approach that netsuite markets and delivers to

their clients and what sweet success is in a nutshell is a integrated templated way of implementing suite success and it's meant to accelerate the implementation and adoption of the product now oftentimes one of the common messages that you'll hear from oracle netsuite representatives or of ours or resellers of netsuite is that sweet success will enable you or similar organizations to implement the product within 90 days and that very well may be possible from a technology perspective but getting your organization to adapt to the technology and changing your people and your processes to fit the technology

generally is going to take you longer than 90 days unless you're a small company or unless you're a company that's relatively new and you don't have a lot of existing processes to worry about or to change so sweet success sounds a lot better in theory than in reality and we found that a lot of companies find that the whole approach of trying to just slam in technology quickly isn't the best approach for them so you may want to water down that sweet success approach and really look at what is a more realistic tempo for us

and also keep in mind that it's in the best interest of netsuite to see you implement the technology as quickly as possible because then the meter starts running on those subscription fees that you're paying so that's the benefit to them but is that the benefit to you and so you really got to look at what's right for you and your business and really push back and develop a plan and a tempo and a pace that makes the most sense for you now another common challenge with netsuite especially if you're a global complex diverse organization is

there's a relative lack of advanced modules and what i mean by that is netsuite is very good at sort of your basic core back office functionality so things like your financials your accounting your crm even some basic inventory management some basic manufacturing basic warehouse management those types of functions are handled pretty well within netsuite and there's some pretty robust and mature processes around those core areas but when you start looking at more advanced areas or things that are unique to your industry that's where netsuite oftentimes gets pressure tested to be able to keep up with

diverse needs of different types of clients so for example some of the modules or some of the functions that we find that netsuite customers struggle with are things like business intelligence if there's a lot of complex reporting that you need or want out of your system it's not a super robust business intelligence platform it provides great reporting but in terms of real enterprise performance management or business intelligence that's not one of the strengths of netsuite another example are things like advanced warehouse so if you have cross-docking in multiple warehouses and a lot of complex different

processes within your pickpack ship processes that may not be a good fit for netsuite same with some of the advanced manufacturing capabilities that a lot of manufacturers need human capital management is another example so hcm if you're looking for an hr solution to help with your hr processes that is not netsuite's strength and then finally another example is the whole concept of advanced planning so if you're trying to do advanced demand planning or forecasting it can do some basic vanilla types of functions in those areas but it's not generally a strength so when you're evaluating

netsuite before you sign on the dotted line to sign up for the product it's important to make sure you pressure test some of those outlying technologies and those outlying business processes especially if you're in a unique industry or if you have unique business processes those are the areas where you're going to want to pressure test the system before committing to it now another pitfall that a lot of customers don't realize they've fallen into until years down the line are the ongoing costs of netsuite so because netsuite is a cloud software as a service subscription-based pricing

model you're paying a set amount every month every quarter every year for a certain amount of time those numbers generally only go up over time especially as you add more users you add modules there's escalators even if you don't add users or modules and sometimes there's other types of escalators or things that kick in over time that can increase the cost of your overall total cost of ownership so it's really important to recognize and look out to the future and really understand what you're getting yourself into with those contracts and oracle netsuite tends to have

some of the more complex contracts out there in many cases and a lot of pitfalls that a lot of companies aren't familiar with especially if you haven't been through this sort of transformation before so be sure you have someone look over the contracts and the overall agreements that you're signing up for and make sure you're negotiating a fair price as well because once you lock in that pricing that's what you're going to pay forever as long as you're using netsuite and like i said before it's not going to decrease at any point during the contract

it's only going to go up [Music] so hopefully this has given you some of the things to think about some of the risks and pitfalls with netsuite as i mentioned before it's not that netsuite is not a good product it's a great product for many organizations out there but we've also seen it be a not so good fit for a lot of organizations that have tried to implement it and done so unsuccessfully so just like any erp system out there you want to fully understand what those risks are pressure test those risks and make sure

that it's the right fit for your organization and certainly compare it to other options out there there's a lot of great options that focus on the small and mid market sector so be sure that you're looking at all your options and i've also included some links below including our 2021 digital transformation report that includes some independent technology agnostic ratings and descriptions and reviews of different erp systems in the marketplace so i encourage you to download that to give yourself some more research and information as you continue your evaluation process and if you'd like to brainstorm

ideas leading into your netsuite implementation to avoid some of these pitfalls if you've already committed to the product feel free to reach out i'd be happy to brainstorm ideas and compare notes on what our other clients have experienced and what some of their lessons learned are i'd be happy to share those notes with you so please feel free to reach out i've included my contact information below so i hope you found this information useful and hope you have a great day you