NetSuite ERP Pros & Cons: What SMEs Need to Know
If you’re reading this article, it’s safe to assume that you’re evaluating NetSuite ERP for your business. Chances are you’ve already found tons of information on NetSuite’s functionality, the different modules available and all the benefits it can offer.
But now you might be wondering...“What’s the catch with NetSuite?”
In our experience as a NetSuite Solution Provider, there’s not one specific “catch” that’s going to stop a company from choosing NetSuite as their ERP solution. In cases where NetSuite doesn’t win, it’s usually because another ERP solution was simply a better fit for that company’s needs. After all, no ERP solution can be all things to all companies.
But we do believe you should go into an ERP purchase eyes wide open. That’s why we provide all the information – including things to watch for – so you know what to expect and how to adjust.
With that in mind, here’s what you need to know about NetSuite.
Cons of NetSuite ERP
First, let’s rip off the band-aid and talk about the potential roadblocks you might run into.
1. Subscription pricing can change over time
A big draw of NetSuite’s subscription pricing model is that you can spread out the spend over time, rather than having a big lump sum payment up front. You also get a bit more flexibility to add or remove users as needed and your subscription price will increase or decrease accordingly.
You also have flexibility to implement your NetSuite solution in phases and only pay for bundles (or modules) as you implement them. With each new bundle you add, you’ll see an increase in your subscription price. In some cases, you could be forced to purchase a new feature bundle just to access one piece of functionality that you need. Rather than paying for 90% of what you don’t need, just to get the 10% that you do, work with your NetSuite partner to see if there’s an opportunity to customize your system to get the functionality you need. It could end up being more cost-effective.
The most important thing to keep in mind is that your subscription price can change each time you renew. The price increases are intended to align with the incremental value NetSuite provides with product enhancements and new functionality. While your costs may not be as predictable over the long term, you can often negotiate better pricing with longer contracts (three years is typical). But if you prefer an annual renewal to give you more flexibility, you could see more variation in your costs.
2. Basic support is limited, and additional support comes at an extra cost
All NetSuite customers are provided with the Basic Support package that includes:
24/7 phone support for critical concerns
Online support through the SuiteAnswers searchable knowledge center
Access to the NetSuite Support User Group
To access 24/7 support and expanded online case support, you have to upgrade to Premium Support which comes at an additional cost.
Users have also expressed that while the NetSuite support team will resolve issues, they tend to be more technical and don’t always guide customers. This can make it more challenging for less technical users to troubleshoot and resolve problems.
Keep in mind that your NetSuite partner will likely offer their own support packages. These will still come at an additional cost, but it’s often lower than the NetSuite Premium package. And you’ll be dealing with consultants that know your system configuration and business processes. Your partner will be better able to guide your users and help them use the system more effectively, rather than just addressing the technical issues.
3. Customizing reports can be challenging
NetSuite’s reporting tools are designed for non-technical users, providing an interface that allows you to pick from pre-defined data sources to create reports. This is great if you want to make minor modifications – things like rearranging fields or formatting reports can be done quickly with very little technical expertise.
But this approach comes with one big limitation – you don’t have the option to easily define custom data sources. If you need to use a data source that isn’t in the pre-defined list, you’ll need custom development to create the source and a custom report.
Similarly, when you create saved searches, you can only join two data sources, which puts limits on the depth of your report. The same goes for the dashboard tool – you can pick from a pre-defined set of widgets with the option for minor customization but can’t create custom widgets.
While these tools provide a good base, most companies will run into limitations that require custom development. In our experience, few small and mid-size companies have the technical expertise in-house to handle this type of customization. This is where your NetSuite implementation partner will be a big asset. They can help you customize your reporting (and your NetSuite solution as a whole) to fit your needs. Keep in mind that not all NetSuite partners will have the same depth of knowledge when it comes to customization, so make that a top criterion as you evaluate partners.
Pros of NetSuite ERP
Now, on to the good stuff! I won’t talk too much about specific features or benefits that you get from ERP software, but you can read more about all that here.
1. NetSuite is an all-in-one solution that supports growth from SME to large enterprise
NetSuite has roots as an accounting platform, providing a strong ERP core. Today, the solution has been built out to cover a range of functional areas – from sales and CRM, to inventory, supply chain management, production and more. The result is an ERP solution that can handle your core business functions. And for any industry-specific processes that fall outside NetSuite’s capabilities, there’s the option to integrate so you can maintain a single source of truth (more on that later).
Here’s what one user had to say about NetSuite on Trust Radius.
“From accounting to ERP to CRM, I don’t imagine there is much NetSuite can’t handle. For a small to medium sized business, and even for many large organizations, I believe it is entirely possible to put all of the corporate system ‘eggs’ into one basket – that is the NetSuite platform.”
It’s a great solution for growing companies because you can build it out in stages and implement new modules as the need arises. For example, you could start with a Financials First implementation that focuses only on financial processes. Then you can add inventory, procurement, fulfillment and more as you’re ready for it. And with NetSuite’s robust functionality and sophistication, you can continue running the solution as you grow – even if you move beyond the small to mid-size enterprise space.
2. NetSuite provides strong financial management capability
NetSuite’s strong financial core makes it a top choice for companies with requirements for intercompany, revenue recognition and multiple billing models. In fact, NetSuite was placed in the Leaders quadrant of Gartner’s 2020 Magic Quadrant for Cloud Core Financial Management for Midsize, Large and Global Enterprise for the third year in a row.
Here’s how NetSuite improves financial management:
Use modeling capabilities to create accurate budgets at the department and company level.
Streamline billing management across subscription, usage-based and hybrid billing models, while accurately recognizing revenue.
Automate revenue scheduling, allocation and reporting to ensure compliance with revenue recognition regulations.
Simplify intercompany accounting and consolidated financial reporting.
Leverage real-time financial data and analysis tools to narrow the gap between financial forecasts and actual performance.
3. NetSuite is built to support integration
While NetSuite (like any good ERP) can handle most of your core business processes, it’s common to use the odd third-party solution for very specific processes. These are usually niche solutions that meet industry-specific needs. The good news is that NetSuite is built to support integrations. Here are a few of the options available:
NetSuite Connectors are productized integrations that solve common use cases (like integrating with Zendesk, Magento, etc.) and are typically sold as a subscription. You can explore the available connectors on the SuiteApp site. Look for the ‘Built for NetSuite’ badge, which indicates the connector has been thoroughly tested for the latest NetSuite release.
NetSuite Integration Platform (iPaaS) enables the development, deployment and governance of data flows between applications. This is a good approach when you’re connecting multiple systems together, rather than just a single end point.
NetSuite Integrations (custom) can be developed on a case-by-case basis to meet specific business requirements. You’ll typically work with your NetSuite partner to develop and implement these custom integrations.
4. NetSuite can be customized to fit your business processes
That leads us to the last point in our list of NetSuite advantages. Although NetSuite offers a lot of functionality out-of-the-box, every business has processes and workflows that are unique to them. That’s where customization comes in.
Transform your business with NetSuite cloud ERP
Here at ProjectLine, we help growing businesses like yours increase efficiency, boost the bottom line and grow faster using NetSuite as a platform. We can walk you through the entire buying process and answer any burning questions you have about NetSuite, how it will work for your business and what to expect in an implementation.
If you’re ready to talk specifics and see a demo that shows how NetSuite can solve your biggest challenges, we’re here to help. Connect with our team to get the process started.