Official NetSuite Blog - Cloud NetSuite

How Outdoor Brands Are Leveraging the Cloud for Competitive Advantage

In late January, NetSuite was a sponsor of the Outdoor Retailer Winter Market, a major event in Salt Lake City, Utah, that showcased products from companies in the outdoor recreation industry. NetSuite has been successfully servicing outdoor companies as our cloud-based business management software solutions allow these retailers to gain competitive advantage in what is an increasingly difficult space to gain visibility and differentiation. 

Cloud computing (where key applications to manage your business are based “in the cloud” and are accessed using a browser, an iPhone/iPad or other mobile devices) solutions have a proven track record of helping outdoor specialty brands rapidly scale by eliminating many of the growing pains associated with fast-growing businesses and significantly improving efficiency. More importantly, “going to the cloud” frees companies from the overhead and distraction of creating costly and complicated IT departments and allows them to focus on developing superior products, value and customer experiences.

The increasing expansion of outdoor specialty products into a wider range of retail outlets and direct consumer sales channels means that small companies can find themselves competing with multinational giants for shelf space and customer loyalty. The biggest brands have vertical and horizontal integration advantages that can be nearly impossible for contenders to match.

Cloud computing levels the playing field with affordable access to detailed supply chain and demand planning insights previously found only in high-end on-premise ERP systems. A firm command of costs, margins and availability throughout the supply chain is what gave a few elite companies a competitive advantage in recent decades. That same power is now being put in the hands of today's innovative outdoor brands through the adoption of cloud computing.

Here are some of our customer stories I would like to share:

Outdoor apparel company Mountain Khakis knew it was on the path to rapid growth when in less than two years it went from zero to 200 distributors. As the company continued to grow, its on-premise ERP solution was unable to keep up with demands. Adopting NetSuite has given Mountain Khakis the efficient and flexible solution it needed to add hundreds of additional dealers and manage a 1500% increase in shipments. The company now has sophisticated marketplace controls for its suppliers and product-by-product sales insight from retail partners, ensuring that products are in stock to meet the growing demand. Tune in to this video to hear from Mountain Khakis CEO Ross Saldarini talk about their success.

Cloud solutions make it possible for suppliers and retailers across the world to access and update data crucial to operations, with no need for complex technology integration. Major retailers, distributors and brand partners all demand that key product information be provided in an accurate and timely fashion. Building custom data integrations is cost-prohibitive for smaller companies with on-premise software. Cloud solutions can format and deliver data at the right time, without forcing company employees to become programmers instead of outdoor goods experts.

Because cloud solutions are designed for the modern Web, unlike conventional on-premise software, they make it easier to grow and reach customers through new and emerging channels, all while keeping employees productive and the costs low. Reusable bottle maker Bamboo Bottle Co, a start-up that went with NetSuite to build its business, took advantage of the integrated NetSuite offering to run its multi-channel business, coordinating sales through distributors as well as direct through its Ecommerce channel, which represents more than 50 percent of its overall business.

In this video, listen to their Operations Associate, Mattie Ford, discuss their use of NetSuite.

Mountain Khakis and Bamboo Bottle are just two case studies of how an innovative brand can use technology to differentiate and grow their business. Every worthwhile, dedicated outdoor goods company started with a vision and an enthusiastic outlook as its greatest assets. Cloud computing solutions ensure that a business never has to compromise those foundational principles by becoming a victim to cumbersome and costly technology.

Cloud technologies can help create a path to sustainable, profitable growth and limitless scalability, from the early days of grassroots awareness and reputation-building to becoming a household name. If you’d like to learn more about some of the companies that NetSuite has enabled, you can visit us here. 

e-Compliance in Latin America

Any eEconomic crisis is like a snowball—growing and gaining speed and endangering everyone in its path. Access to credit is reduced, people cut their discretionary spending and businesses experience a slowdown and stop investing. Unemployment grows and as fewer transactions are performed, fewer taxes are paid.

In such high-pressure situations, some businesses may feel compelled to reduce their tax expenses through unconventional practices. And so it is inevitable that the impact eventually reaches the government. Very much accustomed to this scenario, Latin American governments have become creative on fighting tax evasion to ensure their tax revenue is as minimally impacted as possible.

Brazil, for instance, has a project called the “Public System of Digital Bookkeeping” which started in 2006 and imposes several control mechanisms on business taxpayers. Currently, every invoice must be issued as an XML file and submitted for evaluation by Brazilian tax authorities, who assess such details as the legal status of the issuer and the receiver, and whether the due taxes were correctly applied and calculated.

If all the information is accurate, the authorities will authorize the invoice and give it an official number. By then, the government knows how much tax revenue it is due on that transaction and who will have to pay the bill. The Brazilian tax authority now accounts for more than 3.8 million e-invoices issued and has more than 760,000 businesses registered as issuers.

In Mexico, the electronic revolution began in 2004 with the introduction of the “Fiscal Digital Receipt.” Although adoption moved slower than in Brazil and some transactions are still excluded from the digital process, it is now a compliance obligation for most companies doing business in the country. The Mexican government also makes use of digital means for the tax filing process.

One mandate is the Declaración Informativa de Operaciones con Terceros, or DIOT, which requires that all Mexican value-added tax (VAT) taxpayers file a monthly form listing all paid bills per taxpayer. Since its 2011.2 release, NetSuite has provided out-of-the-box support for the DIOT requirement through its Tax Audit Files feature, enabling companies to streamline compliance.

Other Latin American countries are moving in the same direction. Argentina, Chile, Colombia, Costa Rica and Ecuador also have their versions of facturación electronica. The process varies from one country to another, with different file layouts and formats, synchronous and asynchronous communications, contingency procedures and digital signature requirements. A group of multinational companies doing business across the Mercosul region of South America has been discussing the adoption of a single format and process, but that has yet to come to fruition.

NetSuite provides multiple “out-of-the-box” compliance features, such as individual sequenced transaction numbering, full audit trail, completely configurable role-based access and permissions (which allow for a segregation of duties that fit each and every business), VAT tax reports for more than 40 countries and many others.

NetSuite see opportunities to help businesses meet their global e-obligations and, with the help of our local SDN partners, we have already delivered electronic invoicing integration for some of the above-mentioned countries. If you are conducting or planning business in Latin America, you should be aware of the ever-changing laws and explore how NetSuite can help you achieve regulatory compliance painlessly.

- Matheus Carvalho, Localization Product Manager – Latin America

Keeping Up with Compliance

For the past two years I’ve been involved in NetSuite ERP tax projects ranging from VAT/GST rate changes (the UK had three changes over two years, Portugal and Italy two each and New Zealand one), the switch to e-filing in many countries and the increased need for a clean audit trail to keep the tax inspectors at bay. 

Even in the current tough economic climate, businesses are ensuring that they keep their tax functions well resourced. On the face of it, principles of value added taxation in all countries are broadly the same—charge tax on your sales, recover taxes paid on your purchases and account for the difference.

But the interpretation and implementation of the rules can vary considerably. Add to this the fact that companies use different administrative practices, multiple systems and even outsource tax services, all factors that can have a significant impact on the compliance cost.

A recent Thomson Reuters survey (November 2011) found a 51% increase in the resources global companies allocate to manage indirect tax compliance as compared to five years ago. As governments increasingly seek to raise revenue through indirect taxes, it’s not surprising that companies have been increasing resources in their tax management function to ensure that the calculations are correct and that they are able to successfully withstand any government tax audit.

What have financial software vendors done to ensure that updates to their systems are timely and accurate so that their customers, particularly those that operate in a global environment, remain compliant? The answer is very little. That’s where NetSuite OneWorld and the cloud make a real difference.

The NetSuite Platform Solutions team developed a tool for tax rate changes, such that changes to our customers’ websites, unfulfilled sales orders, item prices and customer records can be automated overnight with very little manual effort involved.

A PwC survey in 2010 concluded that on average it takes a company longer to comply with VAT than with corporate income tax. The chart below shows the average time needed to comply with VAT in each economic/geographic region in a year.

But even within regions the variation can be wide. Two countries in the EU provide a good example of the impact of the length and frequency of returns on the compliance burden. In Ireland, six returns are required each year, and each return has four boxes to be completed. In the Czech Republic, monthly returns are required and each return has 67 boxes to be completed. The time to comply per return is three times longer in the Czech Republic than in Ireland!

At NetSuite, we recognize the need to reduce this huge administrative burden for our global customer base. With the focus on ease of use, multiple languages and familiar looking forms, NetSuite now supports country-specific tax reports for 42 countries. The output is automatically generated on familiar looking forms for each country. Whether for Ireland or the Czech Republic, it takes just a few clicks for the reports to be generated for any country, thus significantly reducing the preparation and filing time required.

The Netherlands VAT (called BTW for Belasting over de Toegevoegde Waarde) report was one of the first delivered by NetSuite. Jacqueline Smits, Operations Manager of VADition Benelux BV, commented, “The new International Tax report saves us about three hours work per month. It has eliminated manual processes combining different and several other reports."

Any multinational with, say, a dozen subsidiaries would save approximately 24 man-days a year in preparation time if they switched to NetSuite OneWorld, in addition to achieving higher confidence in the accuracy and auditability of their tax reporting.

Multinational companies also face a tricky problem internally that is seldom recognized. Adoption of a new system in all global operations can problematic due to user resistance and issues with a lack of will to change and language barriers. To help address those issues, each NetSuite OneWorld VAT report is available in English as well as the native language, thus enabling meaningful conversations between the CFO at the head office and the accountant at the regional office.

Lomography AG, headquartered in Austria with operations in South Korea, France, Italy and Brazil amongst other countries, was one of the first users of the reports. Lomography ERP manager Igor Sarkanovic commented, “The availability of the tax reports in both English as well as the native language promotes internal user adoption, as well as providing the information in a format ready for global consumption."

From what I’ve seen in the marketplace and the various user comments, there is no doubt that the NetSuite solution is streets ahead of the rest, so why not request a demo and see for yourself? I’m certain you will be switching systems in favor of NetSuite if this is just one example of the benefits that NetSuite OneWorld can bring to your business

Kamlesh Rajyaguru - Principle Product Manager - EMEA

Cloud ERP: Freedom to Move, Freedom to Innovate

People use iPhones and other mobile devices in all sorts of ways—texting, phoning, listening to music, watching movies. But to a large majority of business professionals, these devices and others like them, including today’s ever-lighter laptops, mean one thing more than any other—freedom to move. 

Think about it. Just a few years ago, the idea of telecommuting was more a dream than a reality, partly because it was hard to do. For the telecommuter, working from home meant buying or borrowing a desktop or laptop, then fighting your way into the corporate database through VPN connections that were slow and frustrating. For the business, telecommuters meant more work for the IT Help Desk, and more spending on network switches and other gear.

Today that model has been flipped on its head, thanks much to Internet-friendly laptops and other mobile devices, but also to Internet-friendly cloud ERP software. In fact, for years conventional ERP locked people and organizations in to conventional thinking and planning because of the high costs of change. By contrast, cloud ERP gives us the freedom to move, whether it’s user telecommuting or organizational decentralization and, at a higher level, the freedom to find innovative solutions. Here are two examples:

Telecommuting ROI

Telecommuting used to be difficult for a business to cost-justify because of the increased expense in IT resources, as well as the potential losses in worker productivity. Today, thanks to Internet-enabled devices and cloud ERP architectures, it doesn’t take a week, a day, or a high-priced CPA to figure out the ROI for telecommuting users.

The Louisiana Advocacy Center, a NetSuite customer, is a vivid example of how telecommuting can benefit an organization.

The center originally brought in NetSuite following Hurricane Katrina, because it didn’t want to risk losing conventional network connections in the event of another large-scale emergency. What they didn’t foresee, however, was having to deal with a six-month renovation of the center’s New Orleans headquarters. With a conventional ERP setup, they would have had to rent temporary office space, costing a minimum of $60,000. Instead, the Advocacy Center instead set up a telecommuting operation, with staffers working out of their homes or other branch offices.

Decentralizing Business

Want to take user mobility a step further, to include remote branch offices? Fine. Same rules apply. Setting up a new branch office used to be a major hassle and a major expense, and the more remote in terms of geography, the more challenging. Again, the business has to determine if the time and expense—for setting up servers, extending networks, and finding, hiring and training staff­—are justifiable based on the potential increase in business.  Today, thanks to Internet-friendly devices and cloud ERP, it’s much simpler to achieve a positive ROI.

And because cloud ERP isn’t limited by geography, it can mean more than just saving time and money—it can help a company develop a global footprint that would have been impossible with conventional ERP.

An example is Sundia Corporation, a multimillion-dollar fresh produce brand based in Oakland, California. With customer support in the Philippines, accounting in India and the executive team in California, Sundia needed to get operations up quickly while maintaining an efficient ongoing cost structure. It went to cloud ERP so its personnel around the globe can access, manage and even innovate with the ERP system in real time.

Brad Oberwager, Founder, Chairman and CEO, observes that Sundia’s organizational structure would have been untenable with conventional, centralized ERP. “We simply wouldn’t be in business with the old way,” he says.

Can ERP Keep Up with the Speed of Business?

Thanks to the web, today’s local startup can become tomorrow’s global competitor—literally. A good business idea and a strong web strategy can create a new market almost overnight. At the same time, that good idea can be quickly swamped by more nimble competitors if it has to drag an outdated ERP infrastructure along behind it.

Conventional on-premise ERP software, originally designed in the 1990s or earlier, has a hard time keeping up with the global aspirations of many of today’s aggressive organizations. Asking an older ERP architecture to support a new, aggressive subsidiary with multiple online sales channels and a dynamic, multi-warehouse logistics organization is asking for trouble. It may require rolling out a new instance, a version upgrade and/or hiring new development and maintenance staff.  It may take many months, and the budget may go well over expectations.

By contrast, a cloud-based ERP system brings flexibility and cost-predictability that conventional ERP designs can never hope to achieve. Because it’s cloud-based, the software is automatically kept on the latest version, and because it’s web-friendly, a new office setup requires little more than a user laptop—or even an iPhone—for access.

And because its financial, inventory management, ecommerce, CRM and other applications are integrated and delivered only as needed via the cloud, it doesn’t force users to pay for more processing power than they need, so it doesn’t penalize growth with a large up-front capital investment.

Called the fastest-growing company in history, Groupon is an example of a how an aggressive company can leverage cloud ERP for growth. Groupon, whose revenues expanded to more than $700 million in 2010 from $30 million in 2009, needed to add one country every three weeks to meet a one-year growth plan. It selected NetSuite cloud ERP to replace its Microsoft Dynamics GP software so its financial processes wouldn’t be sacrificed to keep pace with growth, and its ERP system would stay in alignment with the company’s aggressive growth strategy.

Another company, Olympus, chose NetSuite ERP to power a new subsidiary in India, rather than deploy an up-to-date version of its SAP central ERP system based in the company’s Japan headquarters. A major reason for the selection was the company’s need to bring the new subsidiary online quickly. The installation beat Olympus’ own nine-month installation objective by 33% by going live in just six months, and it now serves as a prototype for future two-tier ERP installations at Olympus. 

Businesses Still Gambling with Outdated ERP

Every month, we see more evidence that companies are suffering as a result of being locked into outdated ERP systems. A study published last week by the Technology Evaluation Centers IT research consultancy identified that 55% of mid-market organisations are unable to make data and business process changes to their ERP systems due to the costs associated with outside IT consultation.

The research concurs with an earlier Forrester study that found 50% of ERP customers are stuck with aging ERP that may be four or more years old. The clear message is that too often, businesses are being held to ransom by ERP investment that is frozen in time as a result of software version lock.

In a business climate where organisations are constantly seeking ways to gain an edge on the competition and stay ahead of the curve, the question isn’t whether businesses can afford to update their ERP—it’s whether they can afford not to. In a competitive environment, the risks of making do with software that doesn’t include the latest functionality—whether in terms of security, accessibility, compliance, integration and other factors—are severe.

For companies that can’t afford to keep throwing money at their existing on-premise ERP, the cloud can provide an answer. Businesses using NetSuite are never ‘version-locked’ and have access to the latest upgrades as soon as they happen, without the need to hire outside consultation for installation and without additional cost. This flexibility means that businesses don’t need to waste time and resources on managing and maintaining an outdated ERP system but instead can focus on the top priority—growing the business.

For more on how companies can avoid the ERP upgrade cycle for good, click here to read our white paper.

Old ERP: Gambling with Regulatory Compliance

Rules, rules and more rules. You know the drill. While your company is doing its best to compete in its industry, it’s also trying to stay current with a seemingly never-ending barrage of accounting and regulatory challenges. These include everything from sales and corporate tax changes to more stringent governmental requirements such as FASB’s recent EITF 08-01 and 09-03 rules governing revenue recognition for “multi-element” products and services.

How well you can handle these has a lot to do with how effective your ERP software is.  But just because you spent millions on installation and you’ve paid hundreds of thousands for maintenance doesn’t mean it’s up to the task. 

Legacy ERP doesn’t take to changes well, because it couldn’t have anticipated the kinds of regs—like revenue recognition—that your company is facing today.  Yes, you get patches and upgrades and add-ons, but they only add to the time and effort required for maintenance, and they’re often outdated by the time you’ve got them working.  Plus, by the time your ERP software is updated, your operating environment has probably changed, too. To hold everything together, you’ve probably resorted to spreadsheets, CSV exports and manual data entry—and these don’t hold up well to scrutiny by today’s auditors.

Think Cloud, Two-Tier ERP

By contrast, today you’ve got an alternative choice—cloud ERP.

Not only is cloud ERP faster and way less expensive to get running than legacy ERP, it’s designed to be more agile in handling regulatory changes—or changes of any kind, for that matter.  It fully understands revenue recognition and all the subtleties, such as calculating commissions, that go along with it. And it’s versionless, so at any given time you’re running on the latest version, the most current regulatory processes. Compare that to legacy ERP, where your IT group dreads having to coordinate installation of new software versions across the company’s hundreds of users.

If you’re a newer company, your due diligence will show that bringing in cloud ERP over on-premise ERP is literally a no-brainer. And if you’re a subsidiary or division of a larger, older company, you can embark on a two-tier ERP strategy, bringing in cloud ERP instead of running on an extension of your parent company’s legacy ERP system.  More and more companies are doing that today, and there’s plenty of third-party help in doing the integration with SAP or Oracle ERP software.

The IMA Survey: Issues Facing ERP

Where Would You Improve your ERP?

What would you most like to change about your ERP system? Where does the cloud fit in your roadmap? And what's important to look for in a cloud ERP vendor? We put these questions to the Institute of Management Accountants (IMA) membership at a webinar last week, and more than 500 financial professionals responded.

No surprises from IMA members on where they’d most like to improve their current ERP deployments. Better business intelligence was the #1 reply with a resounding 32%, followed by improving ease of use (17%). Most on-premise ERP systems in place today were designed before BI was considered essential. Old ERP systems such as Great Plains, Sage and even SAP and Oracle almost invariably require some level of "bolt-on" BI—query, reporting and analysis tools purchased separately for use with the ERP.

That expensive add-on BI software means additional tools to maintain, and complex configuration and data management just to do some basic analysis. Another issue is that often the data is siloed, with financials in one database, sales in another—making Excel the application du jour for consolidated reporting.

As a result, reporting is often out of date and analytics is available only to a few specialized users. Many bolt-on BI tools sit on the shelf, because the pain of getting the data out of ERP is simply just too much to contend with. Bolt-on BI is often too hard to use and provides only a small window into the ERP data.

In contrast to older on-premise ERP, many modern cloud applications include analytics as standard. For example, at NetSuite, our analytics is completely woven into the ERP experience, and it's all available through just a web browser. Rather than just a few users having access to dashboards, KPIs, and self-service management reporting, everyone does—from the accounts clerk to the CEO, from account execs to the VP of Sales.

And because BI is completely integrated with cloud ERP, users can drill from dashboard to the actual transaction or the customer—making analytics truly operational and actionable, rather than based on partial, out-of-date information. In a nutshell, if you want better BI, you've got to take a long hard look at modern cloud ERP applications.

To Cloud or Not to Cloud?

While 37% of IMA respondents were neutral on where they were taking their ERP over the next 12 months, a substantial 34% rated cloud ERP as a moderate to strongly higher priority over the same timeframe. Sixteen percent of respondents ranked cloud ERP a moderate to strongly lower priority over the same period. When you consider that cloud computing was a new concept for many just a few years ago, the fact that more than a third of IMA respondents rank cloud ERP as a priority over the next 12 months signals an important and significant shift—one that we'll be keeping tabs on in the next survey.

What's the Keys to Evaluating a Cloud ERP Provider?

Finally, we asked the IMA membership what some of the most important evaluation criteria are for cloud ERP. Almost equally, the two key areas were vendor viability and ease of customization.

These are clearly areas that buyers should scrutinize closely. With the growth of the cloud, more vendors have appeared on the scene. Many of them will be here today, gone tomorrow, because they never achieve scale or run out of funding. So it's critically important to inspect a vendor’s track record, ensuring it has solid cash reserves, a sound recurring revenue stream, and that the company is generating cash. ERP is a mission-critical system, so long-term vendor viability is key.

Ease of customization is another important area—it ensures business and power users can create workflows and reports, and modify forms without having to engage outside consultants. A flexible customization layer also means there's less chance of outgrowing the ERP, and that it can be easily adapted to ad hoc business needs more easily. At NetSuite, the majority of our users use our SuiteCloud customization layer to make changes—and better yet, unlike many on-premise systems, the customizations migrate automatically with each upgrade.

Where’s the Innovation?

It’s well known that enterprise IT wants and deserves to play a more strategic role in company business operations and planning.  That means becoming more proactive than reactive, aligning IT with your company’s strategic objectives, and finding new ways to put IT innovation to work in building your company’s competitive advantage.

The problem is, you can’t do all these things without greatly expanding your budget or substantially cutting costs. 

Five years ago this problem might have been unsolvable.  Today, not so – or at least not necessarily so.  The reason: today you’ve got more options for making changes to your organization’s single most strategic business application, your ERP software.

Problems with Earthbound ERP

If you’re a large enterprise, chances the fundamentals of your ERP system were designed years ago – before the Web, before iPhones and iPads, and certainly before cloud computing.  Since then you’ve patched and fixed it, upgraded and added servers and server software, added IT staff and outside consultants – and possibly even end up with more ERP systems from acquisitions.  The last time your ERP actually got a substantial upgrade is likely years ago.

One of the reasons for this is your maintenance costs could be running as high as 90 percent of your total IT budget, according to industry analysts, stifling the ability for IT to meet the needs of the business.

If, on the other hand, your enterprise is considering bringing in new ERP software from SAP or Oracle, your implementation cost will likely be in the millions, and then you’ll face similar maintenance-cost issues as your deployment grows older.

You’ll be faced with a constant need to upgrade software and hardware, and these upgrades will become more costly and time-consuming as you add customizations over time to try and stay aligned with the changing needs of your company.  Your deployment will gradually become version-locked – unable to practically upgrade further because of the complexity, cost and risk of migrating customizations. 

If so, you’re ripe for losing business to younger, more nimble and more innovative competitors.

Cutting Maintenance Costs with Cloud ERP

Why? Because your younger competitors are already changing their budget allocations, minimizing maintenance and expanding their opportunities to innovate with IT.  They’re using the cost savings from cloud ERP to support innovations such as creating cross-functional workflows and reporting processes, adding sales channels for new online storefronts, enter new markets and geographic regions, and improve connectedness between suppliers and customers.

Perhaps most important, their IT management participates in strategic planning meetings as a full member, rather than an order-taker.  IT is able to take the lead on making recommendations, such as mobilizing the workforce and piloting new business processes.

An example of how cloud ERP can boost innovation comes from Commco, a Kansas City, Missouri-based manufacturer and distributor of moulding and millwork products.

Spun off nine years ago, Commco found itself maintaining a costly and aging SAP R/3 ERP system. Tired of making changes that cost thousands of dollars per request and facing a six-month, $1 million upgrade to the next SAP version, Commco decided to realign their ERP and IT cost structure to benefit the business.

To do that, Commco wanted to get off the upgrade treadmill and get automatic upgrades as a means of lowering their ongoing IT costs and freeing up resources to improve business efficiency. Commco also wanted to make the new software more accessible to more employees so they could perform analytics and self-service customizations – difficult, if not impossible, with the old software.  With NetSuite’s cloud ERP software, Commco was able to cut IT costs, eliminate expensive upgrades and lower training costs.  At the same time, the company innovated improvements in core business processes such as sales order management, stock picking, and others.

The End of On-Premise Version-Lock

For as far back as one can remember, it seems like enterprise IT departments and finance teams have simply dealt with the ongoing frustrations, time-sink and risks caused by upgrading their on-premise ERP systems.

Large budgets are set aside, top IT talent is redeployed to get the work done and teams of consultants are paid handsome contracts to map out a logical ERP upgrade strategy. Risk is managed through long hours and hard work, and then, upon actually upgrading to the new software, more time and money is spent fixing bugs and reimplementing customizations that broke in the upgrade process.

Other enterprises simply decide that the cost, resource requirements and risk of upgrading their on-premise ERP systems are too large to take on and they submit to the world of “version-lock” and the realities of old ERP. These companies use old, outdated code from their original on-premise ERP software and rely on internal teams and contractors to create customizations and spreadsheet-based workarounds to keep their business running. 

In fact, according to a recent report by Forrester, “approximately half of ERP customers are currently on releases that are two versions behind the current release, which may be four years old or more.” (Source: “Trends 2011: ERP Customers Demand Better Flexibility, Cost Transparency, and Mobility,” Forrester, January 2011). The fact is that the majority of organizations choose to endure old ERP that’s “frozen in time” and out of tune with the business.

While running years-old ERP is the lowest cost option and sidesteps the risk of business disruption or downtime during a convoluted upgrade, these businesses compromise their agility and competitive position. They simply make do without the latest enhancements and bug fixes and assume responsibility of fixing and servicing their software when issues arise. By opting to run  on outdated on-premise ERP software, these enterprises have essentially decided to slow down their ability to keep up with changing business requirements.

With the advent of cloud computing, the pain of ERP upgrades is finally becoming outdated.  Cloud ERP eliminates "version-lock" and enables innovation with automated upgrades. For example, more than 10,000 organizations and subsidiaries such as Commco, Groupon, Spandex America, Olympus, ClearChoice and TradeCard now ensure all their divisions are always running on the latest version of their cloud ERP software automatically without any painful expensive ERP upgrade projects. Their previous customizations carry forward to the latest version without any reimplementation required.

An upcoming webinar, "Making the Move from Version-Locked On-Premise ERP to the Cloud: How Three Companies Excelled by Moving to Cloud ERP," scheduled for Tuesday, November 15 at 11 a.m. PST (2 p.m. EST), will provide the business case for businesses looking to free themselves from the shackles of “version-locked” on-premise ERP.

Join this webinar to hear from three executives at enterprises that have gained agile, always up-to-date ERP by upgrading to the cloud—Allison Musgrave, Controller of Spandex America; Brad Kugler, CEO of Distribution Video & Audio; and Jim Feeney, CFO of Booth Creek Resort Properties LLC. Our guests will provide a candid discussion on their last-ever painful ERP upgrade. To register for the webinar, please visit www.NetSuite.com/NoVersionLock.

For additional information about how companies can modernize their business operations and minimize ERP upgrade pain, and to obtain the white paper "Eight Ways Outdated ERP Damages Your Business,” please visit http://www.netsuite.com/portal/landing/cloud-upgrade-up.shtml.