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SAP Business One vs NetSuite [ERP Comparison for SMEs]

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Jalene Ippolito November 19th, 2020

As you’re evaluating ERP solutions, chances are SAP Business One and NetSuite will both make it onto your list at some point. And for good reason – they’re two of the leaders in the small to mid-size ERP space. Both are comprehensive ERP solutions designed to support growing companies across a range of industries, from distribution to services, manufacturing and more.

In your research, you’ve likely come across conflicting information. So, we’re breaking down the big differences between the two solutions to help you cut through the noise and make an objective assessment for your business.

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Deployment methods and licensing

This is the number one difference you’ll hear about in comparisons of SAP Business One and NetSuite – cloud versus on-premise. But it’s more a matter of public versus private cloud.

NetSuite is a cloud-based ERP solution with over 22,000 customers. Their multi-tenant cloud platform offers easy access to your ERP system through a web browser. You don’t own your ERP software and your data is available to you with a monthly base platform fee, plus a fee for each user.

While traditionally recognized as an on-premise ERP solution, SAP Business One offers cloud deployment options as well. The most popular option is a private cloud solution – you get the advantages of public cloud, with the additional control of an on-premise system. This best of both worlds approach lends itself well to a hybrid cloud ERP solution that gives you maximum flexibility to accommodate the needs of your users.

Control over system upgrades

Because NetSuite is a public cloud solution, customers have minimal control over system upgrades. They’re deployed simultaneously to all customers. Depending on your perspective, this could be a positive or a negative. On the plus side, you’re always running the latest version of the software, giving you access to bug fixes and new features. But on the flip side, this approach increases the chance of breaking customizations or integrations.

Whether you run SAP Business One on-premise or in a private cloud, you have total control over the timing of your upgrades. You can coordinate upgrades of your ERP system and any customizations or integrations to avoid disruption to the business. Keep in mind that while you can opt out of upgrades and stay on an older version, you won’t have access to new functionality. And you can typically expect more effort on major version upgrades compared to incremental updates.

System customization and integration

For smaller businesses with relatively simple business processes, standard functionality in either ERP system will likely do the trick. But some companies find they need to tailor the solution to accommodate unique workflows or requirements. And while your ERP system houses your core business data, there are cases where integrating with other applications makes sense. In either of these cases, it’s important to understand how much flexibility you have and the limitations of different approaches.

NetSuite has an ecosystem of solutions that can be easily integrated to extend functionality based on specific industry needs. This modular approach offers flexibility to add modules as required but can increase costs and complexity in the long run. NetSuite uses point-and-click app customization that allows customers to tailor their system on their own. For example, you can quickly configure processes, the user interface and reports. Their SuiteCloud Platform offers additional flexibility to create extensions and integrations where truly custom solutions are required.

While SAP Business One also has a robust ecosystem of certified add-on solutions, most of the core features are included in the base platform. This offers the advantage of simplifying your tech stack – integrations or add-ons are used for specific use cases, rather than core functionality. In cases where you need to create custom workflows or integrate with best-of-breed applications, SAP Business One offers maximum flexibility.

Regardless of the solution you choose, when it comes to customizing your ERP solution or integrating with other systems, we recommend working with a qualified ERP partner. Unless you have the in-house expertise, a partner with ERP development experience is your best bet to ensure a seamless solution.

Implementation approach

NetSuite provides a 100-day fixed price implementation that’s designed to get you up and running quickly, while keeping costs low. This approach can work well for many companies, particularly if they have simple, standardized processes. But keep in mind that you may not get all the features and functionality you expected. Every change or addition beyond the fixed price scope can increase cost, so you may end up spending more than you anticipated.

SAP Business One projects can also be implemented in a comparable timeframe. But they’re typically priced based on time and materials, which introduces greater cost variation. The benefit of this implementation approach is an ERP solution that’s more tailored to your business needs. You can also mitigate costs by finding an implementation partner that uses a hybrid approach. They charge a fixed price for system design, then time and materials for the implementation. This gives you better visibility into the implementation cost and mitigates scope creep.

Ability to migrate your data to another ERP system

When selecting your ERP solution, you should always understand your exit options. You should only need to migrate to another solution if you outgrow your solution, or if it simply doesn’t meet your needs as expected. (This is an unfortunate situation that does happen sometimes – you can avoid it by selecting the right ERP system the first time.)

While you can absolutely get your data out of NetSuite, it won’t necessarily come in a relational format that can be easily imported into another system. You’ll likely end up with a series of spreadsheets that may or may not be complete, making it difficult and costly to migrate your data. Always read the fine print in your contract to understand specifically how you will obtain your data if you decide to move to another ERP system in the future.

The process is much simpler with SAP Business One. If you’re hosted in a private cloud, you can obtain a copy of the ERP database or get copies of the full virtual machines (i.e. the servers) that are running your ERP system. The great thing about this is that you not only have access to your data more readily, but you can also move your existing solution to another private cloud provider with minimal fuss.

Which ERP system is the better choice – SAP Business One or NetSuite?

We’re big believers in the right solution for the right customer. What does that mean? There’s no one single ERP solution that will be best fit for every company. At the end of the day, the best ERP solution for your company is the one that meets your needs and helps you achieve your objectives.

Want more information on NetSuite and SAP Business One? Download our Insider's Guide for the top 5 things you need to know.

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November 19th 2020
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