More and more merchants are starting to consider deploying an ERP system for their business. By the time a business owner has a good idea of what an ERP is, many still have numerous questions about how the ERP can benefit their business. It can be hard to understand how to judge ERP systems, best practices for deployment, or when the right time is to take the leap. As a result, questions about ERP range from how it works, the different value adds offered, how many different teams can really benefit from it, and its integration with other software solutions, among others. In this article, we help merchants gain an understanding of the important ways the NetSuite ERP can benefit their business.
We explore various factors such as scalability, mobility, forecasting, cost efficiency, automation, regulatory compliance, and security built into an investment such as ERP. Furthermore, there are certain baseline features that merchants should expect from any ERP solution provider, such as customer support, international functional capabilities, and integration and interoperability. This guide and list of benefits are designed to help business owners equip themselves with all the pertinent knowledge and granularities of an ERP.
A great benefit of an ERP is that it need not be deployed in total across the company. A deployment can start with specific mission-critical teams, and then the scope of the rollout can widen. This same applies to the use case and all the various functionalities an ERP has to offer.
Often businesses have to decide to make changes to their existing ERP solutions given changes in the company or its business model, i.e., a growth phase at a company has rendered existing ERP solutions outdated or insufficient. Given the multitude of functionalities and features offered by the NetSuite ERP, that does not always have to be the case for merchants. An ERP solution should allow businesses to scale and have an offering that fits various business sizes and personas, whether that is small to midsize businesses or large enterprises.
The product team behind NetSuite ERP understands that successful businesses grow, teams expand, business lines are added, and more and more teams need to converge to using a centralized ERP offering. As a result, merchants can rest assure that this offering lets them evolve and grow while having the freedom to accommodate that growth efficiently.
Society at large has been spending more and more of its time on smartphones or other mobile devices, such as tablets. As these devices become almost as powerful as laptops and desktop, and with most office productivity apps running on the cloud anyway, it is not difficult to understand why more people prefer to use mobile devices to carry out a majority of their daily tasks.
It is especially true given that the compact nature of these devices allows customers to carry out their tasks on the go. A team member could snap a picture of specific receipts and complete an expense report much more quickly using their smartphone during a train ride home rather than if they had to pull out their laptop.
Mobile is just a more effective tool. As a result, it’s no longer a niche tool. The best ERP solutions will offer customers mobile capabilities. These may come as the designing of websites for the mobile form factor or offering a supplementary ERP app that offers all the mobile capabilities that smartphones have come to expect from their devices, but for the business environment.
At the end of the day, companies make the decision to deploy an ERP to save money. Yes, they are spending money for the ERP itself, but the savings far outweight the costs related to the ERP and in turn result in gained productivity in day-to-day operations.
The various benefits we’ve looked at include the ability to scale quickly, mobility, reporting and analytics, forecasting, and automation tools to drive productivity. Companies are shifting employee hours away from the mundane and repetitive tasks and towards those activities that focus on expanding the business. Companies can easily direct the time saved by not needing to calculate currency conversions, regulatory compliance with accounting standards, or using excel as the primary tool for monitoring and evaluation towards focusing on business initiatives. Those are direct cost savings, either as productivity gains or limiting the need for hiring additional employees.
Reporting and Analytics
In today’s data-driven business environment, having access to real-time reporting and analytics is the backbone of many business operations. Specific capabilities around reporting and analytics are often one of the main drivers for ERP deployment. With a single click, customers can quickly generate financial reports in accordance with US GAAP, IFRS, for auditors in accordance with the applicable generally accepted accounting standards, or a host of ad-hoc department-specific reports.
Since many ERPs are mobile, facilitating the faster recording of transactions, allowing for quicker turnaround times for more accurate and real-time reports. As ERPs can integrate with numerous third-party apps and point of sale systems, the recording of revenue transactions and their subsequent recognition and reporting is also real-time.
Similarly, the HR team can keep management up-to-date by sharing updated data on employee figures, such as headcount, payroll, raises, severance, and benefits. Legal teams can offer up-to-the-minute updates on any legal matters allowing for accurate recording of contingent assets and liabilities.
Regardless of the performance indicators a business wants to measure inventory, procurement, sales, marketing, or customer experience, to name a few. An ERP is the ultimate tool to calculate, record, strategically plan for, or benchmark these metrics.
Customer support is the new means for merchants to get great testimonials from their customers. Word of how responsive a company’s customer support team is, or the lack thereof, travels at the speed of light today. Consumers today are hyper-social and have numerous means and platforms on which to share their experiences.
Since companies have started to use customer support data within their marketing campaigns to showcase their focus on the clients, Customer Experience has become the buzzword. It captures and leverages data on all forms of customer interactions, such as multichannel support, onboarding and training, and dedicated account management to develop a partner relationship with their customers while efficiently upselling or cross-selling them.
An effective ERP solution easily records costs and accurately captures that information across numerous business functions. However, from a cost management perspective, NetSuite ERP can easily allow for syncronization of this cost data with the level of customer support and interaction touchpoints of customers. Furthermore, specific product release cycles and product rollouts may not be as smooth as envisioned by companies. Merchants can utilize an ERP to allocate increased costs for any service interruptions or order delays to quickly quantify any issues that arise.
The ability of an ERP to quantify the dollar value of customer interactions can have an immense impact on a company’s ability to effectively forecast specific expenses and potential pitfalls in operations.
Any costs associated with cancelation requests or order returns can easily be identified by specific strategic events carried out by a business that support tickets can cross-reference at the time. This data can serve as warning signals to effectively prepare product rollouts or service release cycles, alerting management of the potential pitfalls to look out for in operating procedures.
Forecasting that ERPs facilitate may not always be financial in nature, although they definitely have an economic impact. However, by quickly linking the NetSuite ERP with a CRM solution, merchants have been able to gauge the account health of a business and easily able to decipher the impact on the bottom line due to changes in usage stats, an uptick in support queries, or shifts in receivables trends.
ERPs offering the option to integrate with third-party apps easily is absolutely vital for businesses. Although ERPs are mainly used for the finance department, more and more businesses are combining the ERP with HR, Legal, Sales, and Marketing teams, and even the Customer Support and Success functions. Although companies like NetSuite have both ERP and CRM solutions, years of business practice in which many of these teams have operated in silos have led to a hodgepodge of software that needs to be integrated.
So whether a merchant has eCommerce operating on platforms such as Amazon, Etsy, or Shopify, the ERP should be able to accommodate integrations with those platforms. Furthermore, Sales, Marketing, and Support functions may be using various SaaS solutions such as Salesforce, HubSpot, or Zendesk, to name a few. All of these can easily be integrated with the ERP, allowing for the seamless ingestion of data and setting up the ERP as the central system to manage all the numerous data points.
The automation aspect of the NetSuite ERP is one of the biggest drivers of productivity gains among businesses. Different businesses have different needs. There may be a large conglomerate of global operations operating in languages. Even if the base market is a single country, such as the US, the diversity of customers’ language needs, technological prowess, or payment preferences may require businesses to adjust the user interface to accommodate specific needs quickly.
Then there is the advent of different niche businesses offering various payment options. A typical example of this is more and more businesses looking to adopt recurring revenue models, effectively setting up subscription businesses. The recording of these transactions, their billing, and payment process can all be automated.
Another great way these automation capabilities of NetSuite ERP benefit businesses is by allowing them to expedite the recording of transactions, reducing the cycle times of budgeting, forecasting, and month-end closings, to name a few.
In the past, many businesses have had to utilize different calculations in a multitude of MS Excel files done by a number of employees to assess the impact of revenue recognition, gain, and loss on foreign currency transactions for both the balance sheet and the statement of operating income, or the revaluation of such transactions.
With NetSuite ERP, businesses can automate all these tasks and quickly generate financial reports in a matter of seconds. The solution allows merchants to natively record multi-currency transactions for foreign customers or suppliers utilizing the foreign exchange rate integration tool.
Businesses can easily capture any fluctuations in the exchange rate at the transaction level and for financial reporting purposes. This level of automation is especially useful for foreign currency revaluations in a specific accounting period. The NetSuite ERP allows daily updates of exchange rates in multiple time zones from two different exchange rate providers, automatically recording the revaluation and the gain and loss on those revaluations.
Businesses can then easily convert all of them to the home currency for month-end closing, eliminating any non-native calculations conducted in Excel or done manually, saving time and eliminating potential mistakes.
As businesses grow, their need for various compliance grows. Often a company has specific requirements to have their financials audited every year, requiring them to keep a meticulous record of source documents and paper trails for transactions. Maybe they must comply with specific accounting and reporting standards, such as Sarbanes Oxley Act.
Many businesses have begun to directly offer their customers new forms of financing, such as Buy Now Pay Later (BNPL). Although BNPL currently has limited consumer credit reporting requirements to credit bureaus, that is widely expected to change in the future for consumer protection purposes. These changes will pose new regulatory compliance challenges for businesses, in which ERP solutions can offer to ease those burdens. Compliance with audit requirements, accounting requirements, and reporting procedures are all functions that merchants can also automate.
NetSuite ERP solutions is an industry-leading solution that allows companies to efficiently manage complex finance procedures, such as revenue recognition or for transactions on a global scale. Merchants can also quickly oversee routine tasks such as bank reconciliation, management of inventory, accounts payables, receivables, or recording depreciation and amortization entries.
Security for businesses is an ongoing concern. Companies constantly must ensure data protection of finances of their business as well as that of customers. These needs are even greater as employees start working from home, preferring to use mobile devices while on the go. All this is as customers start using more innovative ways to conduct transactions and pay for them.
Businesses need to strike a balance between implementing suitable security protocols without being too intrusive. ERPs allow companies to quickly scale additional security functionalities such as PCI security standards compliance. As these ERPs can have embedded payments capabilities stored on the ERP service provider’s database, merchants can easily limit the scope of their PCI compliance.
From an employee management tool, ERPs can implement security protocols such as multi-factor authentication as well as segregation of roles and duties to ensure safeguards around authorized access to data or theft or fraud due to collusion.
There is no surprise that more businesses are starting up every year. There is clear evidence that there are more businesses started today than there were just a decade ago. From a data-driven perspective, statistics show that there has been a 75% increase in new business startups in the last year compared to just a decade ago. There are many factors driving that, an ease of starting a business due to lower IT infrastructure costs with the advent of cloud computing, as well as dissatisfaction of employees with their nine-to-five grind, driving them to pursue dreams deferred. Who would want to be working in a role in which they see limited prospects of pay, respect, and opportunity?
As these businesses grow and flourish, they will need to scale, expand internationally, comply with various regulatory compliance, and ensure the security and accuracy of their financial data. Merchants will look to automate the redundant tasks to increase productivity, remain agile by using mobile and easily scalable tools, and cost-effectively do all this. The one tool that can accomplish this is the NetSuite ERP. The ERP solution offered by NetSuite offers numerous functionalities that are hard to find from other solutions providers, such as integration and interoperability between a company’s ERP and CRM. More and more businesses see the value in their Finance, HR, and Legal support team that can easily communicate and interact with their Product, Sales, Marketing, and Customer Experience functions. NetSuite excels at this task because the company is a popular solutions provider for both NetSuite ERP and NetSuite CRM. These factors and the others we’ve listed in this article determine entrepreneurs’ decision-making to deploy an ERP. Merchants should fully understand and carefully consider all of them.