NetSuite offers extensive business management functionality to organizations that recognize the value of SaaS One of the pioneers in cloud computing, NetSuite launched a cloud-based ERP system at a time when SaaS was widely considered risky to both the security and the availability of an organization’s data. Now it is generally recognized that the SaaS provider will probably have more technical resources and expertise than the average organization looking to invest in an ERP system. Time has not only vindicated NetSuite’s Internet-based delivery model. It has also seen NetSuite evolve from a solution aimed at small companies to one that targets midsized organizations (up to 1,000 employees), as well as subsidiaries of the largest companies. Today, NetSuite combines ERP, financials, CRM, PSA (professional services automation), and e-commerce in a single, integrated business management software solution. [ Also on InfoWorld: Find out which companies are fueling ERP’s comeback. | Don’t be a victim — take a lesson from these real-world ERP failures. | Discover what’s new in business applications with InfoWorld’s Technology: Applications newsletter. ] ERP systems such as NetSuite contain more functionality than could ever be reviewed in any one article. This review is based on a subset of features (238 in total) that are indicators of the overall system’s capabilities. I evaluated each feature based on demonstrations of the functionality by the vendor and scored them using the following criteria: 7 = Requirement is fully addressed in the standard system (“out of the box”) 6 = Addressed by a third party using same tools and database as primary system 5 = Workaround 4 = Minor modification 3 = Addressed by a third party using different tools than primary system 2 = Vendor plans to fully address in the next year 1 = Major modification 0 = Not available You’ll find the overall scores for the main areas of NetSuite’s functionality in the table below. To see how each of these scores was determined, please refer to the more detailed tables at the end of this article. Note that, unlike the score in most InfoWorld reviews, the score for this ERP system has not been subject to any weighting of the priority for a particular feature. This is because the priority for any given feature can vary widely by organization. Also, though this review attempts to be as thorough as possible, it was based on a demonstration by NetSuite of the features used to score the system, and a demonstration of a system will likely not reveal problems that can occur in day-to-day operations. These problems can be related to ease-of-use, performance, or bugs not detected during the demonstration session. My advice is to validate the score by conducting reference checks with organizations that are similar to your own. This analysis should be considered only a starting point in your search for a new ERP system, as any organization will have requirements not considered in this review. Another resource for an initial evaluation of NetSuite and other ERP systems is the Systems Analysis Tool. Using the same review methodology applied here, the Systems Analysis Tool will find the top ERP systems that match your specific profile and requirements. Balancing complexity and simplicity Everyone wants a system that’s easy to use, but determining what users actually mean by ease-of-use can be a challenge. Given that NetSuite is built to serve the needs of midsized and large organizations that are complex, it is not a simple system. However, NetSuite certainly has features that contribute to ease-of-use, including an entirely Web-based user interface (UI), global search (the ability to find information anywhere in the system), and a consistent presentation across a broad range of functionality. When users sign on to the system, they’re greeted by a dashboard that displays all the most important information based on their role in the organization. The dashboard includes KPIs (key performance indicators) that are calculated in real time as the underlying data changes. You can also drill down from the KPI to see the related transactions and source documents. In addition, NetSuite includes an ad hoc report writer and a workaround for OLAP (online analytical processing) that behaves like Excel’s pivot table. NetSuite doesn’t provide OLAP cubes and complete multidimensional analysis as some competitors do. NetSuite Functionality Score (1-10) Budgeting and forecasting 4 Business intelligence 9 Cloud readiness 10 Construction 4 Customer relationship management 10 Customization 10 Distribution 7 Document management 5 Ease of use 9 Ecommerce 10 Financials 9 Fixed assets 9 Human resources 6 Manufacturing 8 Mobile applications 9 Multiple companies 10 Multiple currencies 10 Professional services 9 Security 10 Service management 4 Workflow 9 Organizations usually want a system that can be tailored to meet their requirements rather than having to adapt their business processes to fit a system’s capabilities. In the early days of ERP, that typically meant customizing the system at the outset and often getting stuck with an old version as the costs of upgrading to a new system became too high. Today, many ERP vendors, including NetSuite, offer configuration tools that allow customization outside of source code. For example, you can add user-defined fields that are available for report selection and ordering. NetSuite also offers SuiteCloud, a platform for NetSuite business partners to customize and extend NetSuite applications. SuiteCloud supports schema customization, workflow management, JavaScript-based scripting, integration via Web services APIs, and application lifecycle management capabilities. NetSuite claims more than 5,000 developers and 1,000 applications in the SuiteCloud community. NetSuite OneWorld, which is a separate module, provides complex organizations with a consolidated view across all companies even if the base currencies of the companies are different. Many ERP vendors will tell you they support multiple companies and could, for example, share the same supplier database among the group. But if the companies require a different base currency, then separate databases will likely be required as well — making it difficult to share data across the company. NetSuite supports multiple currencies in the same database. NetSuite supports automatic balancing, as well as automatic purchase and sales across companies. Automatic balancing comes in handy when there are many transactions between companies. For example, if Company A pays an expense for Company B, the system will automatically create balancing entries between the two companies. Automatic purchase and sales become very useful when there is trade between related companies, as it avoids the need to rekey the purchase order from one company to the sales order of the other company. Workflow represents one of the best methods to improve business processes, allowing you to automatically route transactions for approval or generate alerts based on exceptions such as late deliveries. NetSuite includes workflow, but it requires technical expertise to set up. NetSuite offers a good financial system that includes flexible financial reporting, allocations, consolidation, basic budgeting, and revenue recognition. You’ll need some customization if you must have allocations based on actuals — for example, head counts or budgets — in the database. Consolidation is done in real time (without having to run a separate consolidation process) and includes automated intercompany eliminations and foreign currency translation with a currency rate type defined per account. You’ll need to use Adaptive Planning, a third-party application that’s integrated with NetSuite, for any complex budgeting and forecasting needs. Adaptive Planning is considered a best-of-breed solution. Fixed assets, distribution, manufacturing, and more NetSuite recently acquired fixed asset software from a third-party developer. The developer had used NetSuite tools to build the system so that it looks and feels like the rest of NetSuite. The fixed asset system includes depreciation, disposals, maintenance scheduling, integration with accounts payable, and tracking work done on an asset. It does not include the ability to automate scheduling based on asset usage. NetSuite includes order processing, purchasing, and inventory control with features such as available to promise, back order fulfillment, landed cost, requisitions, RMA (return management authorization) tracking, and serial number tracking. However, there are missing features, such as consolidation of multiple requisitions into one purchase order and advanced features associated with warehouse management, including wave picking and suggested put away. Wave picking, which is useful in larger warehouses, facilitates picking multiple orders at the same time, thereby avoiding going back and forth for each individual order. Suggested put away advises warehouse clerks where inventory should be optimally stored. NetSuite offers both a light manufacturing system native to the company and an advanced version built by a third party but OEMed and supported by NetSuite. Both are available at additional cost. The advanced version includes routing, scheduling, and shop floor collection. It would be appropriate for make to stock (such as consumer household goods) and assemble to order (such as personal computers) but not for process (such as food) or repetitive (such as consumer electronics) manufacturers. This system was not designed for companies that need to plan production across multiple locations. Similarly, you can choose between a light version and an advanced version for PSA. The advanced version, which is called OpenAir, came by way of an acquisition a number of years ago. OpenAir was a best-of-breed SaaS solution for professional services organizations, but it lacked financials. OpenAir is now tightly integrated with NetSuite, so financials are included. Service management functionality — needed by companies that dispatch and schedule work for their customers — is limited. However, if you’re just looking for light service management, NetSuite’s CRM system might suffice. The HR system covers only the basics. You’ll need a third-party system for more complex features such as recruitment, benefit administration, and training administration. While you can attach documents to transactions and master files within NetSuite, you’ll need a third-party system for additional document management functionality such as document check-in and check-out, versioning, and searching for keywords or embedded text. NetSuite’s powerful CRM system can compete with many of the leading CRM systems on the market. It includes contact management, sales force automation, marketing automation, Microsoft Outlook integration, and customer service (case management and escalation, online customer center, and knowledge management). A strong B2C (business-to-consumer) e-commerce application is highly desirable for any company selling directly to consumers. NetSuite has a B2C solution that includes a Web store, shopping cart, and analytics. NetSuite also has B2B (business to business) functionality, such as allowing a customer to place an order online or check order status. Still, through no fault of NetSuite, B2B e-commerce has a long way to go. Today, most organizations would need to rekey their purchase orders into the e-commerce website of their suppliers. Naturally they will email or fax their orders rather than rekey them. We’re still waiting for the technology companies to agree on standards and to figure out how to minimize security concerns using Web services. NetSuite reported $236.3 million revenues in 2011, which was a 22 percent increase from the previous year. NetSuite has continued to invest in expanding its reach by developing and acquiring new software to appeal to wider markets. NetSuite is now beginning to compete with Oracle ERP systems — ironic considering that Larry Ellison is NetSuite’s principal shareholder. NetSuite has also formed a partnership with Accenture, which has brought deals with large companies such as Qualcomm to NetSuite. The future looks bright for NetSuite and its SaaS vision, a promise that bodes well for NetSuite customers. The biggest compliment to NetSuite is that all of the major ERP vendors are now trying to catch up. Most reviews of software end with a summary of major strengths and weaknesses. I have not done this for a number of reasons. First, strengths and weaknesses depend on the organization seeking the system and are therefore subjective. Second, reviewers often consider themselves all-knowing about the system they have reviewed. The truth is that they have not spent enough time to cast judgement on any system as complex as ERP. My approach has been to present you with firsthand verification of a wide range of functionality and let you draw your own conclusions. NetSuite scoring details The tables in the following pages — 21 in all, listed in alphabetical order — indicate how the overall scores for the various feature categories were determined. Again, these scores are based on demonstrations by NetSuite of the functionality we consider most relevant to an overall business management solution. Business intelligence Functionality Max. score Score Report writer – Ad hoc (no programmer needed) 7 7 – Uses same password security as application 7 7 Dashboards – Include metrics 7 7 – Include graphs 7 7 – Include to-do items 7 7 – Configurable without a programmer 7 4 OLAP – Create OLAP cubes 7 5 – Built-in OLAP cubes 7 5 56 52 Total score 9 Budgeting and forecasting Functionality Max. score Score Budget approval process – Multiple levels of approval 7 3 – Escalation rules 7 3 Calculations – Excel-like formulas 7 3 – Wages and benefits calculated based on rates in payroll 7 3 – Driver-based budgeting 7 3 – Based on trends 7 3 – Based on regression smoothing techniques 7 3 – What-if analysis 7 3 – Change assumption and see results automatically 7 3 Audit trail – Track changes/versions 7 3 – Summary of changes from preceding forecast 7 3 77 33 Total score 4 Cloud readiness Functionality Max. score Score Multitenant architecture 7 7 SaaS delivery model 7 7 Hosted option 7 7 Browser support – Firefox 7 7 – Chrome 7 7 – Safari 7 7 – Internet Explorer 7 7 49 49 Total score 10 Construction Functionality Max. score Score Estimating – Estimates based on building statistics such as number of suites and historical rates 7 3 – Detailed estimates based on take-offs that include floor area, drywall, and appliances 7 3 Budgeting – Maintain budget that includes change orders and commitments 7 3 Collaboration with trades – Bids online 7 3 – Bids via spreadsheet 7 3 – Track status of activities to be completed by trades 7 3 – Alerts if late 7 3 Scheduling – Generate schedule based on start date, lag time between activities, and dependencies 7 3 – Update schedule as work gets completed 7 3 Billing – By percent completed 7 3 – By milestone completed 7 3 77 33 Total score 4 Customer relationship management Functionality Max. score Score Applications – Contact management 7 7 – Salesforce automation 7 7 – Marketing automation 7 7 – Service management 7 7 35 35 Total score 10 Customization Functionality Max. score Score Add user-defined fields to screen 7 7 Used in report selection and ordering 7 7 Without changing source code 7 7 Platform for business partners to extend solution 7 7 28 28 Total score 10 Distribution Functionality Max. score Score Back orders – Back order preference by customer 7 7 – Back order fulfillment based on customer priority 7 7 – Back order fulfillment based on order date 7 7 – Back order fulfillment based on requested ship date 7 7 – Back order fulfillment based on a set of rules that include customer preference, order date, and requested ship date 7 4 Available to promise – Date-sensitive view of inventory demand and supply 7 7 Data collection – Bar coding 7 7 Landed cost – Based on standard percentages 7 5 – Based on actuals 7 7 – Allocate actual invoice for a landed cost component such as freight to one PO or receipt 7 7 – Allocate actual invoice for a landed cost component such as freight to multiple PO’s or receipts 7 1 EDI support – Order placement and acknowledgement 7 3 Picking – Wave picking 7 3 – Pallet, case, and unit picking 7 3 – System directs pickers to location in warehouse 7 5 – Consider expiration date Put away – Pallet, case, and unit put away 7 3 – System selects the best location 7 3 Requisitions – Convert requisition into a purchase order 7 7 – Consolidate requisitions into purchase orders 7 1 – Approval process 7 7 RMA tracking – Reason codes 7 7 Serial number and lot tracking – Track history of all movements 7 7 154 115 Total score 7 Document management Functionality Max. score Score Integration – Attach multiple documents to any transactions in the system 7 7 – Attach multiple documents to any master files (such as customer or supplier) in the system 7 7 Change control – Optionally check in and out 7 3 – Email alerts if changed 7 3 – Versioning 7 3 Approvals – Approval process 7 3 – Based on same tools as approving transactions 7 3 – Show status of document 7 3 Search – Search on file names 7 3 – Search for embedded text 7 3 – Search for keywords 7 3 77 41 Total score 5 Ease-of-use Functionality Max. score Score Consistent UI throughout the application 7 7 Shortcuts to specific programs 7 7 Type ahead/autofill 7 7 User-defined help 7 5 Only need a browser 7 7 Multiple criteria to find a record 7 7 Global search 7 7 Perception of ease-of-use 7 4 56 51 Total score 9 Ecommerce Functionality Max. score Score Customer portal – Customers can place orders online 7 7 – Order confirmation includes a link to a secure customer portal 7 7 – Customer can check order status online 7 7 – Link to carrier’s website and view status of shipment based on tracking number 7 7 Supplier portal – Confirm receipt of PO 7 7 – Update status of shipment 7 7 – Obtain specifications 7 7 49 49 Total score 10 Financials Functionality Max. score Score Analysis codes/reporting structure – Attach analysis codes to general ledger account segments (for example, attach a region code to an account segment for office) 7 7 – Reporting structures that allow rollups to any dimension (for example, define a rollup from office to province or state and then to country) 7 7 – Analysis codes or reporting structures can be used to generate financial reports for attributes/dimensions such as country without embedding a country code in a financial transaction 7 7 Allocations – Based on percentage 7 7 – Based on actuals 7 4 Commitment accounting – Compare (actuals + commitments) to budgets 7 5 – Prevent exceeding budget on purchase order 7 5 Consolidation – Create new entity and post journal entries to it 7 7 – Foreign currency translation 7 7 – Source account can be different from target account 7 3 – Across entities with different fiscal year ends 7 5 – Automatic intercompany eliminations 7 7 Financial reporting – Rows and columns can be defined 7 7 – Multiple hierarchies 7 7 – Drill-down to transaction details 7 7 – Format any part of report 7 3 Budgeting – Multiple budgets 7 7 – Export actuals to Excel 7 7 – Export data is formatted and includes formulas 7 7 – Import budget from Excel 7 7 – Compute budget using formula 7 7 Project accounting – Project can be updated by any financial transaction 7 7 – Compare budget to actual 7 7 – Span fiscal years 7 7 – Project subledger (not tracked in general ledger) 7 7 Revenue recognition – Based on percent completed 7 7 – Based on milestone completed 7 7 189 172 Total score 9 Fixed assets Functionality Max. score Score Setup – Multiple books 7 7 Depreciation – Straight line 7 7 – Declining balance 7 7 – Half-year convention 7 7 Disposals – Gain/loss calculation 7 7 – Partial disposals 7 7 Integration – Fixed assets linked with accounts payable; only need to enter asset once 7 7 Preventive maintenance – Schedule maintenance 7 7 – Schedule maintenance based on usage 7 1 – Track all work done on asset 7 7 70 64 Total score 9 Human resources Functionality Max. score Score Recruitment – Web based 7 3 – Automated screening based on keywords or qualifications 7 3 Employee administration – Pictures attached to employee record and available for viewing by employees that have access 7 7 – Self-serve over the Internet 7 7 – Maintain history of compensation and ratings 7 3 – Record company assets such as keys, mobile phones, laptops given out to employee 7 7 Leave-of-absence administration – Able to view the various absence plans of each employee (vacation, personal, sick days, bereavement, unpaid leave, and so on) 7 3 – Absence approval process 7 4 Performance management – Maintain job descriptions and attach to employees 7 5 – Track performance review process (dates, ratings) 7 5 Benefits administration – Benefit plans and deductions (family vs. single, LTD, life insurance) 7 3 – Eligibility dates for benefits 7 3 Training administration – Employee update courses online 7 3 – Registration for internal courses by employees 7 3 112 71 Total score 6 Manufacturing Functionality Max. score Score Type supported – Process (such as food) 7 3 – Repetitive (such as consumer electronics) 7 5 – Make to stock (such as consumer household goods) 7 7 – Assemble to order (such as personal computers) 7 7 – Make to order (such as complex custom products) 7 7 – Engineer to order (such as ship building) 7 3 MRP – Based on bill of materials, inventory availability, seasonality, trends, and orders 7 6 – Generate suggested PO 7 6 Scheduling – Generate production orders 7 7 – Based on resource capacity of labor and equipment 7 6 – Based on grouping jobs to minimize setup 7 6 – Graphical view (drag and drop production orders) 7 6 Shop floor data collection – Backflushing 7 7 – Data collection by bar codes for labor and materials 7 3 – Record any downtime with reason code 7 3 – Based on PLC (programmable logic controller) 7 3 Quality control – Track nonconformance 7 3 – Graph results by month over year 7 3 Miscellaneous – Reverse bill of materials for disassembly 7 6 – Color size matrix for apparel manufacturing 7 7 – Engineering change management 7 6 – Multisite production (plan across locations) 7 5 – Configurator 7 3 154 118 Total score 8 Mobile applications Functionality Max. score Score Optimized UI for some functions on iPhone 7 7 Optimized UI for some functions on Android 7 6 Optimized UI for some functions on BlackBerry 7 6 Optimized UI for some functions on Windows Phone 7 6 28 25 Total score 9 Multiple companies Functionality Max. score Score Automatic balancing of intercompany transactions 7 7 Purchase order automatically becomes sales order 7 7 Share inventory across separate companies 7 7 Share vendors across separate companies 7 7 Multiple companies in same database and each company can have a different currency 7 7 35 35 Total score 10 Multiple currencies Functionality Max. score Score Calculate realized gains and losses 7 7 Calculate unrealized gains and losses 7 7 Invoice and payment in different currencies 7 7 21 21 Total score 10 Professional services Functionality Max. score Score Flexible invoicing – Can add any text to invoice 7 7 – Time and material 7 7 – Fixed fee 7 7 – Percent complete 7 7 – Cost plus 7 5 Scheduling – Based on availability 7 7 – Match skills 7 7 – Match employee preferences 7 7 Timesheets – One week at a time 7 7 – Note field for each project/day 7 7 – Identify overtime 7 7 – Web-based data entry 7 7 – Mobile-enabled 7 7 – Can enter offline and synchronize 7 7 – Can prepopulate timesheet based on project assignments 7 7 – Could enter time for a project, phase, and task 7 7 – Different (lower) cost per user for timesheet and expense module 7 7 Expense reporting – Calculations such as miles * rate 7 7 – Maximums per day 7 7 Work in progress – Maintain WIP history 7 7 – Generate bill from WIP 7 7 – Write-downs or write-ups 7 1 Revenue recognition – Based on hours booked * rate 7 7 – Based on percent completed 7 7 – Subscription revenue is deferred or recognized monthly 7 7 – Based on milestone completed 7 7 Workflow – Electronic approval of timesheets and expense reports 7 7 – Multiple approvals of timesheet (by supervisor and project manager) 7 7 – Alert if timesheet not completed on time 7 7 – Miscellaneous 7 7 – Revenues and costs transferred between divisions automatically when an employee in one division works for another division 7 5 – Two-way integration with Microsoft Project 7 7 – Pass-through charges from A/P to client 7 7 – Charge customer for equipment usage 7 5 – Change orders 7 5 238 224 Total score 9 Security Functionality Max. score Score By company 7 7 By menu 7 7 By function (view, add, change, delete) 7 7 By field 7 7 By account code segment (such as department) 7 7 By employee or by role 7 7 42 42 Total score 10 Service management Functionality Max. score Score Service calls – Date and time stamping 7 3 – Escalations if work not done on time 7 3 – Track service history by serial number 7 3 – Generate quote for customer 7 3 – Generate work order 7 3 – Generate invoice for work done and inventory used 7 3 Scheduling/dispatching – Manually assign resources 7 3 – Automatically assign resources based on skills and availability 7 3 Self-service by client – Check status 7 3 – Log problem 7 3 – Access to information to resolve problems 7 3 77 33 Total score 4 Workflow Functionality Max. score Score Online review and approval of transactions 7 7 Alerts on pending and late activities 7 7 Visual view of business process 7 7 Configurable without being a programmer 7 4 Generate emails with link back to system for approval 7 7 35 32 Total score 9 This article, “Review: Up close with NetSuite’s deep ERP,” was originally published at InfoWorld.com. Get the latest insights on ERP and applications at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter. Software DevelopmentCloud ComputingSaaS