Review: Up close with NetSuite's deep ERP

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NetSuite offers extensive business management functionality to organizations that recognize the value of SaaS

One of the pioneers in cloud computing, NetSuite launched a cloud-based ERP system at a time when SaaS was widely considered risky to both the security and the availability of an organization's data. Now it is generally recognized that the SaaS provider will probably have more technical resources and expertise than the average organization looking to invest in an ERP system.

Time has not only vindicated NetSuite's Internet-based delivery model. It has also seen NetSuite evolve from a solution aimed at small companies to one that targets midsized organizations (up to 1,000 employees), as well as subsidiaries of the largest companies. Today, NetSuite combines ERP, financials, CRM, PSA (professional services automation), and e-commerce in a single, integrated business management software solution.

[ Also on InfoWorld: Find out which companies are fueling ERP's comeback. | Don't be a victim -- take a lesson from these real-world ERP failures. | Discover what's new in business applications with InfoWorld's Technology: Applications newsletter. ]

ERP systems such as NetSuite contain more functionality than could ever be reviewed in any one article. This review is based on a subset of features (238 in total) that are indicators of the overall system's capabilities. I evaluated each feature based on demonstrations of the functionality by the vendor and scored them using the following criteria:

7 = Requirement is fully addressed in the standard system ("out of the box")

Organizations usually want a system that can be tailored to meet their requirements rather than having to adapt their business processes to fit a system's capabilities. In the early days of ERP, that typically meant customizing the system at the outset and often getting stuck with an old version as the costs of upgrading to a new system became too high. Today, many ERP vendors, including NetSuite, offer configuration tools that allow customization outside of source code. For example, you can add user-defined fields that are available for report selection and ordering. NetSuite also offers SuiteCloud, a platform for NetSuite business partners to customize and extend NetSuite applications. SuiteCloud supports schema customization, workflow management, JavaScript-based scripting, integration via Web services APIs, and application lifecycle management capabilities. NetSuite claims more than 5,000 developers and 1,000 applications in the SuiteCloud community.

NetSuite OneWorld, which is a separate module, provides complex organizations with a consolidated view across all companies even if the base currencies of the companies are different. Many ERP vendors will tell you they support multiple companies and could, for example, share the same supplier database among the group. But if the companies require a different base currency, then separate databases will likely be required as well -- making it difficult to share data across the company. NetSuite supports multiple currencies in the same database.

NetSuite supports automatic balancing, as well as automatic purchase and sales across companies. Automatic balancing comes in handy when there are many transactions between companies. For example, if Company A pays an expense for Company B, the system will automatically create balancing entries between the two companies. Automatic purchase and sales become very useful when there is trade between related companies, as it avoids the need to rekey the purchase order from one company to the sales order of the other company.

Workflow represents one of the best methods to improve business processes, allowing you to automatically route transactions for approval or generate alerts based on exceptions such as late deliveries. NetSuite includes workflow, but it requires technical expertise to set up.

NetSuite offers a good financial system that includes flexible financial reporting, allocations, consolidation, basic budgeting, and revenue recognition. You'll need some customization if you must have allocations based on actuals -- for example, head counts or budgets -- in the database. Consolidation is done in real time (without having to run a separate consolidation process) and includes automated intercompany eliminations and foreign currency translation with a currency rate type defined per account. You'll need to use Adaptive Planning, a third-party application that's integrated with NetSuite, for any complex budgeting and forecasting needs. Adaptive Planning is considered a best-of-breed solution.

NetSuite's powerful CRM system can compete with many of the leading CRM systems on the market. It includes contact management, sales force automation, marketing automation, Microsoft Outlook integration, and customer service (case management and escalation, online customer center, and knowledge management).

A strong B2C (business-to-consumer) e-commerce application is highly desirable for any company selling directly to consumers. NetSuite has a B2C solution that includes a Web store, shopping cart, and analytics. NetSuite also has B2B (business to business) functionality, such as allowing a customer to place an order online or check order status. Still, through no fault of NetSuite, B2B e-commerce has a long way to go. Today, most organizations would need to rekey their purchase orders into the e-commerce website of their suppliers. Naturally they will email or fax their orders rather than rekey them. We're still waiting for the technology companies to agree on standards and to figure out how to minimize security concerns using Web services.

NetSuite reported $236.3 million revenues in 2011, which was a 22 percent increase from the previous year. NetSuite has continued to invest in expanding its reach by developing and acquiring new software to appeal to wider markets. NetSuite is now beginning to compete with Oracle ERP systems -- ironic considering that Larry Ellison is NetSuite's principal shareholder. NetSuite has also formed a partnership with Accenture, which has brought deals with large companies such as Qualcomm to NetSuite. The future looks bright for NetSuite and its SaaS vision, a promise that bodes well for NetSuite customers. The biggest compliment to NetSuite is that all of the major ERP vendors are now trying to catch up.

Most reviews of software end with a summary of major strengths and weaknesses. I have not done this for a number of reasons. First, strengths and weaknesses depend on the organization seeking the system and are therefore subjective. Second, reviewers often consider themselves all-knowing about the system they have reviewed. The truth is that they have not spent enough time to cast judgement on any system as complex as ERP. My approach has been to present you with firsthand verification of a wide range of functionality and let you draw your own conclusions.

NetSuite scoring details
The tables in the following pages -- 21 in all, listed in alphabetical order -- indicate how the overall scores for the various feature categories were determined. Again, these scores are based on demonstrations by NetSuite of the functionality we consider most relevant to an overall business management solution. 

Cloud readiness

FunctionalityMax. scoreScore
Multitenant architecture77
SaaS delivery model77
Hosted option77
Browser support  
- Firefox77
- Chrome77
- Safari77
- Internet Explorer77
 4949
Total score
 10

Construction

FunctionalityMax. scoreScore
Estimating  
- Estimates based on building statistics such as number of suites and historical rates73
- Detailed estimates based on take-offs that include floor area, drywall, and appliances73
Budgeting  
- Maintain budget that includes change orders and commitments73
Collaboration with trades  
- Bids online73
- Bids via spreadsheet73
- Track status of activities to be completed by trades73
- Alerts if late73
Scheduling  
- Generate schedule based on start date, lag time between activities, and dependencies73
- Update schedule as work gets completed73
Billing  
- By percent completed73
- By milestone completed73
 7733
Total score
 4

Customer relationship management

FunctionalityMax. scoreScore
Applications  
- Contact management77
- Salesforce automation77
- Marketing automation77
- Service management77
 3535
Total score
 10

Customization

FunctionalityMax. scoreScore
Add user-defined fields to screen77
Used in report selection and ordering77
Without changing source code77
Platform for business partners to extend solution77
 2828
Total score
 10

Distribution

FunctionalityMax. scoreScore
Back orders  
- Back order preference by customer77
- Back order fulfillment based on customer priority77
- Back order fulfillment based on order date7
- Back order fulfillment based on requested ship date77
- Back order fulfillment based on a set of rules that include customer preference, order date, and requested ship date74
Available to promise  
- Date-sensitive view of inventory demand and supply77
Data collection

- Bar coding77
Landed cost  
- Based on standard percentages75
- Based on actuals77
- Allocate actual invoice for a landed cost component such as freight to one PO or receipt77
- Allocate actual invoice for a landed cost component such as freight to multiple PO's or receipts71
EDI support  
- Order placement and acknowledgement73
Picking  
- Wave picking73
- Pallet, case, and unit picking73
- System directs pickers to location in warehouse75
- Consider expiration date  
Put away  
- Pallet, case, and unit put away73
- System selects the best location73
Requisitions  
- Convert requisition into a purchase order77
- Consolidate requisitions into purchase orders71
- Approval process77
RMA tracking  
- Reason codes77
Serial number and lot tracking  
- Track history of all movements77
 154115
Total score
 7

Document management

FunctionalityMax. scoreScore
Integration  
- Attach multiple documents to any transactions in the system77
- Attach multiple documents to any master files (such as customer or supplier) in the system77
Change control  
- Optionally check in and out73
- Email alerts if changed73
- Versioning73
Approvals  
- Approval process73
- Based on same tools as approving transactions73
- Show status of document73
Search  
- Search on file names73
- Search for embedded text73
- Search for keywords73
 7741
Total score
 5

Ease-of-use

FunctionalityMax. scoreScore
Consistent UI throughout the application77
Shortcuts to specific programs77
Type ahead/autofill77
User-defined help75
Only need a browser77
Multiple criteria to find a record77
Global search77
Perception of ease-of-use74
 5651
Total score
 9

Ecommerce

FunctionalityMax. scoreScore
Customer portal  
- Customers can place orders online77
- Order confirmation includes a link to a secure customer portal77
- Customer can check order status online77
- Link to carrier's website and view status of shipment based on tracking number77
Supplier portal  
- Confirm receipt of PO77
- Update status of shipment77
- Obtain specifications77
 4949
Total score
 10

Financials

FunctionalityMax. scoreScore
Analysis codes/reporting structure  
- Attach analysis codes to general ledger account segments (for example, attach a region code to an account segment for office)77
- Reporting structures that allow rollups to any dimension (for example, define a rollup from office to province or state and then to country)77
- Analysis codes or reporting structures can be used to generate financial reports for attributes/dimensions such as country without embedding a country code in a financial transaction 77
Allocations  
- Based on percentage77
- Based on actuals74
Commitment accounting  
- Compare (actuals + commitments) to budgets75
- Prevent exceeding budget on purchase order75
Consolidation  
- Create new entity and post journal entries to it77
- Foreign currency translation77
- Source account can be different from target account73
- Across entities with different fiscal year ends75
- Automatic intercompany eliminations77
Financial reporting  
- Rows and columns can be defined77
- Multiple hierarchies77
- Drill-down to transaction details77
- Format any part of report73
Budgeting  
- Multiple budgets77
- Export actuals to Excel77
- Export data is formatted and includes formulas77
- Import budget from Excel77
- Compute budget using formula77
Project accounting  
- Project can be updated by any financial transaction77
- Compare budget to actual77
- Span fiscal years77
- Project subledger (not tracked in general ledger)77
Revenue recognition  
- Based on percent completed77
- Based on milestone completed77
 189172
Total score
 9

Fixed assets

FunctionalityMax. scoreScore
Setup  
- Multiple books77
Depreciation  
- Straight line77
- Declining balance77
- Half-year convention77
Disposals  
- Gain/loss calculation77
- Partial disposals77
Integration  
- Fixed assets linked with accounts payable; only need to enter asset once77
Preventive maintenance  
- Schedule maintenance77
- Schedule maintenance based on usage71
- Track all work done on asset77
 7064
Total score
 9

Human resources

FunctionalityMax. scoreScore
Recruitment  
- Web based73
- Automated screening based on keywords or qualifications73
Employee administration  
- Pictures attached to employee record and available for viewing by employees that have access77
- Self-serve over the Internet77
- Maintain history of compensation and ratings73
- Record company assets such as keys, mobile phones, laptops given out to employee77
Leave-of-absence administration  
- Able to view the various absence plans of each employee (vacation, personal, sick days, bereavement, unpaid leave, and so on)73
- Absence approval process74
Performance management  
- Maintain job descriptions and attach to employees75
- Track performance review process (dates, ratings)75
Benefits administration  
- Benefit plans and deductions (family vs. single, LTD, life insurance)73
- Eligibility dates for benefits73
Training administration  
- Employee update courses online73
- Registration for internal courses by employees73
 11271
Total score
 6

Manufacturing

FunctionalityMax. scoreScore
Type supported  
- Process (such as food)73
- Repetitive (such as consumer electronics)75
- Make to stock (such as consumer household goods)7
- Assemble to order (such as personal computers)77
- Make to order (such as complex custom products)7
- Engineer to order (such as ship building)73
MRP  
- Based on bill of materials, inventory availability, seasonality, trends, and orders76
- Generate suggested PO76
Scheduling  
- Generate production orders77
- Based on resource capacity of labor and equipment76
- Based on grouping jobs to minimize setup76
- Graphical view (drag and drop production orders)76
Shop floor data collection  
- Backflushing77
- Data collection by bar codes for labor and materials73
- Record any downtime with reason code73
- Based on PLC (programmable logic controller)73
Quality control  
- Track nonconformance73
- Graph results by month over year73
Miscellaneous  
- Reverse bill of materials for disassembly76
- Color size matrix for apparel manufacturing77
- Engineering change management76
- Multisite production (plan across locations)75
- Configurator73
 154118
Total score
 8

Mobile applications

FunctionalityMax. scoreScore
Optimized UI for some functions on iPhone77
Optimized UI for some functions on Android76
Optimized UI for some functions on BlackBerry76
Optimized UI for some functions on Windows Phone76
 2825
Total score
 9

Multiple companies

FunctionalityMax. scoreScore
Automatic balancing of intercompany transactions77
Purchase order automatically becomes sales order77
Share inventory across separate companies77
Share vendors across separate companies77
Multiple companies in same database and each company can have a different currency77
 3535
Total score
 10

Multiple currencies

FunctionalityMax. scoreScore
Calculate realized gains and losses77
Calculate unrealized gains and losses77
Invoice and payment in different currencies77
 2121
Total score
 10

Professional services

FunctionalityMax. scoreScore
Flexible invoicing  
- Can add any text to invoice77
- Time and material77
- Fixed fee7
- Percent complete77
- Cost plus5
Scheduling  
- Based on availability77
- Match skills77
- Match employee preferences77
Timesheets  
- One week at a time77
- Note field for each project/day77
- Identify overtime77
- Web-based data entry77
- Mobile-enabled77
- Can enter offline and synchronize77
- Can prepopulate timesheet based on project assignments77
- Could enter time for a project, phase, and task77
- Different (lower) cost per user for timesheet and expense module77
Expense reporting  
- Calculations such as miles * rate77
- Maximums per day77
Work in progress  
- Maintain WIP history77
- Generate bill from WIP77
- Write-downs or write-ups71
Revenue recognition  
- Based on hours booked * rate77
- Based on percent completed77
- Subscription revenue is deferred or recognized monthly77
- Based on milestone completed77
Workflow  
- Electronic approval of timesheets and expense reports77
- Multiple approvals of timesheet (by supervisor and project manager)77
- Alert if timesheet not completed on time77
- Miscellaneous77
- Revenues and costs transferred between divisions automatically when an employee in one division works for another division75
- Two-way integration with Microsoft Project77
- Pass-through charges from A/P to client77
- Charge customer for equipment usage75
- Change orders75
 238224
Total score
 9

Security

FunctionalityMax. scoreScore
By company77
By menu77
By function (view, add, change, delete)77
By field77
By account code segment (such as department)77
By employee or by role77
 4242
Total score
 10

Service management

FunctionalityMax. scoreScore
Service calls  
- Date and time stamping73
- Escalations if work not done on time73
- Track service history by serial number73
- Generate quote for customer73
- Generate work order73
- Generate invoice for work done and inventory used73
Scheduling/dispatching  
- Manually assign resources73
- Automatically assign resources based on skills and availability73
Self-service by client  
- Check status73
- Log problem73
- Access to information to resolve problems73
 7733
Total score
 4

Workflow

FunctionalityMax. scoreScore
Online review and approval of transactions77
Alerts on pending and late activities77
Visual view of business process77
Configurable without being a programmer74
Generate emails with link back to system for approval77
 3532
Total score
 9

This article, "Review: Up close with NetSuite's deep ERP," was originally published at InfoWorld.com. Get the latest insights on ERP and applications at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.

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