SuiteWorld: Netsuite sees omni-channel businesses based on a single `truth’

The cloud is often promoted as something rather daring and unusual, but there is every chance that its close affinity with one of the long-standing cores of mainstream business management, the ability to recognise and manage different forms of revenue, could yet prove to be something of a `killer application’ for SaaS-based ERP, ecommerce and business management vendor, Netsuite.

At a Q&A session at the end of CEO Zach Nelson’s keynote presentation at Netsuite SuiteWorld in San Jose, Chief Operating Officer, Jim McGeever, indicated that, within the next two years, US regulations on Revenue Recognition are to change. The result will be that all companies will be required to run two sets of accounts in parallel – one running the old system, and one running the new.

As McGeever observed:  “Netsuite is the only company able to recognise all types of revenue. “ This could put it in a very strong position to become the obvious first option for most businesses looking for business management tools capable of coping with such a requirement.

According to Zach Nelson, the core advantage Netsuite brings it is built around a single core dataset of the business that is acts as a platform system of record for all other applications, from both Netsuite itself and third party partners. This is the archetypal `one version of the truth’.

Coupled with this is the core task of order management. “This drives every other application or action a business wants to take,” he said. “Everything, from ERP through to CRM, comes from being in control of order-taking.”

And the `everything’ in question is set to get more complex and powerful, and Nelson is aiming to move Netsuite into a position where it has all the tools needed for businesses to build the level of management they require, regardless of whether they are an SMB or a major enterprise.

One of the key complexities he now sees coming fast down the track is the variety of ways that companies will be obliged to do business, and at the heart of this is a fundamental change in the relationship between customers and vendors: the latter no longer sets the rules on how business is conducted. No longer does the vendor prescribe the ways and times in which customer orders may be taken. Now it is an omni-channel world.

And the complexity also changes what the vendors are trying to sell. As Nelson pointed out, businesses are no longer selling definable `products’.  “You can see this with the Internet of Things, where you don’t just buy a jet engine, you also buy the service capability based on it self-reporting.”

Even simple manufacturing businesses will end up selling an amorphous mass of product, service planning, tailored solutions and the like.

This is why Netsuite is now focussing on delivering omni-channel commerce. While this has traditionally been seen as a retail problem, in Nelson’s view it now applies across the board – all customers and partners will be coming at a company from any available channel, so the business has to be ready. And to be ready, Nelson suggests, the business has to be based on a single dataset that is the system of record.

“CRM is no longer the lead application in managing a business,” he said. “That is just about managing prospect lead: opportunity:forecast. In practice however, business is about managing customers’ wider experience,  based on knowledge such as what they actually bought, when it was actually delivered, how often they have actually complained about it, and range of other factors – it is a wider `business’ problem, not just a CRM problem.”

Nelson announced a number of developments that underpin this view.

For example the SuiteCommerce system, which sits at the business management back end of many front end systems such as CRM, has been given a significant upgrade, in the form of a new B2B Business Center offering, which is built on SuiteCommerce.

According to John Martinez, Director of  Information Systems for VHA, the master distributor for Sprint mobile phone systems in the USA, B2B Business Center has already allowed him to turn staff just doing customer order-taking into account management staff who can add value by up-selling and cross-selling. In the three months since the system first went live at VHA, sales generated  this way have gone up from 5 percent of sales generated by these staff to 50 percent.

“With omnichannel no one knows what the next channel might be,” he said, “but we feel we have identified a new one – G2G.” This stands for Government to Government channels, with one of the early examples being the State of Texas.

The goal of Vijay George, CTO of the State’s IT operations, is to deliver an Amazon.com style of user experience for all government agencies, through a centralised purchasing portal. The project first started out with an on-premise implementation in around 2010. This, Goerge said, was hard to maintain, and difficult to work with, but it showed that the idea worked. It is now fully implemented on Netsuite.

Amongst its features is a simple cost-cutting capability where suppliers to the State are allowed to run their own product and service catalogues so the state doesn’t have to. Instead, the supplier adds new products, or changes prices, as they need to, and the new item details can be directly used by staff provisioning tasks and services.

One of the important sub-plots with the omni-channel approach is that it opens up new opportunities for specialist consultants and agencies  that actually understand the business management implications of operating in an omni-channel world.

“W now have a whole cadre of new partners that understand the omni-channel business management issues, Nelson said. “Many of them see the erosion of sales siloes like B2B abd B2C and can work with businesses looking to exploit new channels, such manufacturers that want to sell direct to consumers, rather than through wholesalers.

To meet this need, there is now a new version of  Netsuite SRP (Services Resource Planning) aimed squarely at the services industries. This is aimed at any business based on the selling of peoples’ time and expertise.And this is now seen as just about any business, not just the specialist `body’ shops, as the omni-channel model stops that being a definable and separate business. Instead they will be selling products and associated services.

The company has also completely re-architected the User Interface of the Netsuite system. Much of this revamp has been based on the input of partners – which he now says includes all the 20,000-plus customers.