After seeing thousands of Game of Thrones blog posts and not wanting to add to that mountain (pun absolutely intended), I thought better of it and decided this article might be of greater value to the public. Specifically, to those evaluating upgrading their ERP (hopefully to NetSuite) and those already on NetSuite who are in need of some guidance of how to extract the maximum value.
I recall when I was first introduced to NetSuite and the significant ROI it claimed to deliver. The accountant in me at the time was very skeptical. And, candidly I didn’t understand half of the techy talk being used to describe it. Fast forward four years after rolling up my sleeves and putting NetSuite to the test with 100+ companies,
Here are my conclusions:
- Platform for Scalable Growth (via process automations): Can you grow your company without having to add many employees?
I am continuously amazed at how far our most advanced customers will go to automate NetSuite so that their business runs itself. While I’m not advocating reductions in workforce, I am advocating growing without having to add additional headcount. For example, one of our customers automated their sales process to capture leads, nurture the leads, send contracts, send renewals and check-in with customers throughout the year to ensure retention – all without any human intervention.
Fortunately, or unfortunately, process automation is here to stay. Not even Sarah Connor (Terminator circa 1984 reference) herself can prevent it. So, our leading customers are embracing the concept of process automation to help build infrastructure and improve customer service and efficiency within their operations so that they can grow without having to add any or many employees.
The key is building automation in a system designed for it. NetSuite is an extremely flexible platform, able to automate all types of processes without anyone having to write a single line of code (please note: code writing is sometimes needed but must be evaluated by cost/risk vs. benefit). Whether that means integrating your order processing, sending updates to customers with workflows, or processing transactions without a human touch, let the system do the repetitive tasks.
Questions to ask yourself to determine if there are opportunities to automate your processes:
- Do I need to hire more people each time I grow?
- Are employees doing repetitive tasks?
- Am I using Excel to process data and/or make decisions?
- Platform for Knowing Your Numbers: Do I have a single system to report on my numbers in real-time?
The importance of knowing your numbers is often misunderstood, and maybe even a bit of ignorance is bliss. Regardless, it’s amazing how many companies either don’t know their numbers or don’t know their numbers until it’s too late. NetSuite provides a real-time reporting platform. What that means is, from my dashboard, I can watch my daily sales number increase as more invoices are generated throughout the day. Or in a more complex view, I can track my financial and operational Key Performance Indicators (KPIs) against their targets in real-time and be notified (i.e. via e-mail) if there are any exceptions that require my immediate attention to course correct.
Net “Suite” has created a platform with modules to handle most all of your business processes whether running your website/e-commerce, CRM, manufacturing, revenue recognition or accounting. That said, when you use the “Suite” to its fullest, you have access to real-time data across the entire platform to gain objective insights into your company’s performance without having to wait. Monitoring your company’s results in a more real-time fashion is a pro-active approach to ensuring you meet your goals and certainly a best practice that our leading customers take advantage of.
The ROI here is being able to make objective, more real-time decisions that yield stronger business outcomes. Let’s put that more simply, if you were sailing a boat across the ocean from England to Boston, would you want to pull out your compass to take a bearing once a day or throughout the day?
Questions to ask yourself about knowing your numbers:
- Do I know my sales for the day in real-time?
- Can I track my KPI’s in real-time and have alerts go off if exceptions happen?
- Can I view my businesses consolidated financial results and/or results in USD$ at any point in time or do I need to wait until month-end?
- Platform for Higher Valuation: Higher Valuation at Time of Sale
I know this sounds salesy, but it’s true that NetSuite will yield you a higher valuation at sale and here’s why:
- If the acquirer needs to deploy a new system because the current system is out-of-date or neglected, that will lower your valuation because the acquirer will factor in the new system costs and longer lead time until they make a return on their acquisition price.
- If you followed #1 and #2 in this article, you will improve your financial results (i.e. improved revenue and EBITDA) thus yielding a higher purchase price.
- Specific to private equity (PE) – NetSuite is a very scalable platform. If a PE firm is your likely buyer, they will almost always put in NetSuite (or a system like it) so that their investment can seamlessly bolt on to other acquisitions, scale easily and provide access to consistent reporting. So, PE firms look for NetSuite and pay more for companies with it implemented properly.
Questions to ask yourself about your valuation:
- Does my company have an attractive technology infrastructure that an acquirer would be interested in?
- Are my systems up to date?
- Have I had a professional evaluate my ability to improve my financial results with technology?
About the Author:
Josh has a strong background in accounting/finance and is a certified NetSuite ERP consultant with 10+ years of helping companies improve their financial and operating results. Josh has also founded his own successful software companies. Josh focuses on optimizing how his customers deploy their people, processes and technology. Josh has been a part of over 100 NetSuite implementations/projects mainly focused on inventory-based companies, tech companies and service companies. Additionally, Josh has acted as a strategic advisor to numerous companies from inception to sale of over $100M.
Please reach out to Josh for a complimentary qualitative and quantitative ROI analysis of your company to determine if you could benefit from NetSuite. Josh’s e-mail is: firstname.lastname@example.org