NetSuite Implementations
Things to consider prior to embarking on a NetSuite Implementation
If you are feeling like your company is starting to outgrow your initial ERP system, whether it’s QuickBooks Online, Xero, or another, you are likely to be considering NetSuite as your next ERP system. NetSuite, for better or worse, has dominated the mid-stage company market for ERP systems.
There have been several companies (e.g. Campfire and Puzzle) that have tried to build a NetSuite competitor, but these companies are too early to have enough staying power. You would never want to be in the situation where you have to switch accounting software because your choice solution went under. NetSuite, being owned by Oracle and with tens of thousand of customers, will never go away. Plus, as the saying goes, “no Controller ever got fired for implementing NetSuite”. It really is the safest option out there.
Other considerations are Sage Intacct or Workday Financial, but Sage is just a worse version of NetSuite and Workday Financial is for larger companies that already have Workday as their HR software. Workday is even more cumbersome than NetSuite (if you thought this was possible).
Key considerations when deciding on implementing NetSuite (I won’t drag on too long here, assuming you have already made the decision if you clicked on this article).
Questions to ask yourself:
Do you have an internal accounting team? If the answer to this question is no, I would strongly recommend that you postpone until you have an in-house team. Implementation is much more intense than the NetSuite salespeople will lead you to believe (read more on implementation below). Most, if not all, outsourced accounting teams use QuickBooks Online or the smaller accounting systems, and you’ll be better served staying where you are until you hire your first Controller.
Do you really need NetSuite? Auditors will push you to NetSuite, stating that you need a tighter control environment and robust ERP system to progress as a company. While this is true, ask yourself about the real reason you’d be implementing NetSuite. If you can live with a material weakness on your audit opinion (extremely common for startups and not important until later stages), then it may be best to stay with your existing solution.
Is what is breaking in your current solution really something that NetSuite is going to fix? Quickbooks Online, or other small ERPs, can actually be very powerful if you set things up correctly and intelligently. All financial reporting within these systems is messy, and NetSuite is not going to fix that.
If the answer to the above three questions are “Yes”, then you’re on the right track to implementing NetSuite. NetSuite will allow your accounting operations to progress and set you up for future growth.
But the key is ensuring that you set NetSuite up correctly, and if done correctly, this is the last ERP implementation you may have to do at your company till the end of time.
Choosing a NetSuite Implementation Partner:
The first big decision you’ll need to make is, should you go NetSuite Implementation team or External Partner. Surprisingly, the NetSuite sales reps don’t push too hard for their internal teams. This is good because it allows you to make the best decision for your team without the salesperson breathing down your neck to purchase their implementation package.
Differences between the NetSuite team and an External Partner:
NetSuite Implementation Team:
You would think that they would be experts in implementation because they are working on their own product, but this can’t be further from the truth. This is for the following reasons:
Typically you’ll get a couple young associates straight out of college who may only have 1–2 years in the platform. They have also never used the platform operationally, and have only learned the platform through their internal training systems.
These implementations are always fixed-fee. Therefore, the NetSuite team is incentivized to cut as many corners as possible and only provide necessary services.
Due to point two above, they have a standardized checklist for every implementation, even though every company is different. They do customize for companies based on their unique processes, but it still tends to be a “round peg, square hole” for much of the implementation.
Partner Implementation Team:
These are experts in systems implementations and have significant experience in the field of NetSuite implementations. In many cases, companies end up going to these firms after their NetSuite-led implementation fails. Notes on external implementation teams:
Typically you’ll get implementation partners with many more years of experience and in many cases, you’ll get partners who have been NetSuite administrators within organizations. Therefore, they know how NetSuite is functionally used within an organization, and can bring this experience and expertise to your implementation.
They operate on a fee per hour basis. This leads to the incentive of them getting everything right in the implementation. However, the flip side of the coin is that they are incentivized to implement certain thing that you may not need. It’s key when going with an external partner to have clear expectations and to communicate effectively up front what your needs are and the background of your processes.
These implementations are typically custom and tailored to your unique use cases. Another benefit of an external partner is that their job is not done at go-live. They can continue to help in setting up custom reporting (reporting feature in NetSuite is complicated, but powerful), implementation of new modules, updates of processes, etc. Because they were involved in your implementation, they have the background on all of your company specifics and processes.
I have heard from many VPs of Finance, Controllers, etc. to never go with the NetSuite implementation team. And based on the reasons above, you can see why. That said, there are still many reasons why the NetSuite implementation team can serve your needs and be the better choice given certain circumstances. You should choose the NetSuite team if you have all of the following:
A NetSuite expert internally — this means that you may not need the additional expertise of an external partner, and already know how you should set up your processes within NetSuite.
An extremely simple use case — if you have low transaction volumes, one or only a few subsidiaries, and simple revenue recognition, you may not need the expertise of an external partner.
And then finally, the NetSuite implementation is going to be significantly cheaper than any external partner. Typically you can get bundle discounts for an implementation. Going through a partner is likely to cost you 1.5x-2x of your first year software cost. That’s a hefty amount on an already large software purchase. While it is extremely important to get things right up front, the benefits may not outweigh the costs.
Still… if you do not have prior experience with NetSuite, DO NOT go with the NetSuite implementation team. You will regret it, and you will likely incur higher costs than if you had gone with an external implementation team to start out with.
