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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

Powering the Hyper Growth Small Business

The web enables a small business to go global instantly – reaching millions of customers and hundreds of millions in a year or two where it used to take a decade or more.

But if your accounting and sales systems aren’t aligned to get you where you need to do be,  because your running software like QuickBooks or Sage,  then it can slow any small business down - just as your about to hit the inflection point.

The NetSuite Cloud Fuels SMB Growth

Beyond The Rack is a great example of aligning systems for growth. They were officially in the SMB zone when they first started out as a small NetSuite customer in 2009, with just 18 employees. Now they are North America's premier online shopping club, offering their members the most sought-after designer brand apparel, accessories, beauty products and home decor at up to 70% off retail. Beyond the Rack has risen to a preeminent position in the flash-sales space and a top ecommerce destination in Canada, serving nearly 5 million members across North America. They sell their products in the context of two-day, first-come, first-served, limited-quantity events, with 15 new events each day, starting at 11AM ET.

Beyond The Rack knew that starting out, while they were a small business, they needed room for growth. The challenge was that their QuickBooks deployment was creating process delays, and they were seeing tremendous inventory turnover producing hundreds of new SKUs every day. In short, they had SMB oriented systems that weren’t aligned with their trajectory.

But key for every SMB, they wanted to avoid hiring administrative IT and systems administration resources, so the NetSuite cloud was perfect for them.

As Kevin Murphy at Beyond the Rack puts it, "If we had selected a lighter-weight system, we would never have been able to scale, and if we had paid for a conventional on-premise ERP system, a year and a half later, we would still be implementing it."

Fast-forward a year later, and their staffing level is about 8 times the size, sales volumes are about 1,100%, and they’ve added millions of customers since they first launched their SMB success story with NetSuite. By becoming a NetSuite SMB, they’ve, simplified the process of adding hundreds of new products daily, freed up resources for further growth and expansion,  and gained worry-free cloud availability to operate smoothly - even during 100-fold traffic spikes caused by sales demand.

NetSuite Stopped Selling Small Business Accounting in 1998!
(We’ve Since Been Selling Small Business Success)

As Ron Gill, NetSuite CFO pointed out at the recent Pacific Crest conference, 40% of NetSuite customers are small businesses. In face NetSuite has been working with small businesses for over 12 years, gaining a Better Business Bureau A+ rating in the process. Net-net, thousands of small businesses run soup to nuts on NetSuite, and we love to hear the success stories!

Now we are bringing the power of the NetSuite cloud to SMB’s in a whole different way, based on that wealth of experience we’ve learned over the years.

Using our SuiteCloud platform, and partnering with innovators like JCurve, we’re able to make implementing cloud business management easier than ever before for small businesses. NetSuite partner, JCurve enables cost conscious small businesses to self-implement on NetSuite, using pre-built wizards, reports, and workflows. In short, combining the self-deployment of QuickBooks with the same powerful NetSuite cloud that Beyond The Rack is using to fuel their growth.

In addition, we’ve also been busy building a channel of small business solution providers that partner closely for success, providing a wealth of experience that small businesses can quickly and locally tap to get off QuickBooks and onto the growth ramp of the cloud.

As Kevin Murphy at Beyond the Rack puts it, "NetSuite made the technical aspects of our implementation ridiculously easy, and were valuable partners in helping us understand our requirements and processes.”

Taking the Next Step

If you’re curious to find out where NetSuite can take your small business, then download our Success Kit: Moving Beyond QuickBooks . You’ll hear the common challenges facing business starting out, and reach customer success stories from businesses like yours that made the move.

The State of Manufacturing in 2011

During the first quarter of 2011, NetSuite conducted a benchmark survey on the state of business within the mid-market North American manufacturing industry.

The exciting news is that the majority of respondents reported significant optimism for growth in the future. More than 75% believe their business will improve in the near term, and almost 98% reported that they believe their business will either improve or remain steady—a dramatic and significant improvement over results NetSuite saw in its earlier survey of manufacturers in the first half of 2010.

For key objectives, 60% are focused on both revenue growth and cost savings, with about 30% focused primarily on revenue growth only. Maintaining and increasing revenue growth while watching costs and delighting customers are key priorities for manufacturers in 2011.

The optimism among manufacturers has increased significantly from 2009, when companies were focused on cost reductions above all else. The results of this survey indicate that manufacturers are once again focused on investing to create new products and get revenue growing among both new and existing customers.

The survey also reveals a strong focus on improving customer satisfaction, retention and profitability, with CRM and ecommerce systems among the technologies to help achieve these strategic business goals. At the same time, manufacturing leaders are looking to improve employee productivity, automate and streamline business processes and reduce overhead to boost overall efficiency.

Some findings from the NetSuite survey report, The State of Manufacturing, include:

• 71% are focusing on improving employee productivity to reduce costs
• 58% are looking to grow revenue by deepening relationships with existing customers
• Only 3% are considering layoffs, indicating a robust and growing business climate.

To achieve their objectives, manufacturing companies want a system that supports all business processes and gives a complete view of what is going on within the business. For that reason, many manufacturing businesses are looking at web-based SaaS (or cloud computing) applications, specifically SaaS manufacturing,  as an effective technology for getting visibility into the business, reducing costs and improving business efficiency.

NetSuite’s survey was designed to better understand the manufacturing industry’s economic health, business objectives, focus areas, key challenges and its use of software to support key business processes. Over 85,000 contacts received an invitation to participate. With more than 800,000 manufacturing businesses in North America, the survey was a significant undertaking and builds upon similar industry assessments from the National Association of Manufacturers and the Manufacturing Institute, as well as NetSuite’s 2010 survey.

If you’d like to learn more, I’d encourage you to download the results of the survey.

Ranga Bodla, Industry Marketing

SuiteWorld 2011 PSA and SRP Recap

A big thank you to all of our customers, partners, staff, press, analysts and other guests who attended the SuiteWorld conference in San Francisco. It was a fantastic event, with nearly 2,000 attendees from all over the world!

NetSuite’s Services Vertical team spent the months leading up to the event preparing professional services automation (PSA) and services resource planning (SRP) sessions to cover hot topics such as project management, resource management and skills tracking, project accounting and more.

We realized that all the hard work paid off in spades when we kicked off the PSA track…and it was standing room only! Thanks to all attendees who stuck around to learn more about NetSuite products for professional services…especially those who had to stand. We promise we’ll reserve a larger room next year.

We highlight our customers’ successes whenever we can, and SuiteWorld was a great opportunity. Special thanks go out to FatWire, TECO Natural Resource Group, MetricStream, RIIS and Emergo Group and their representatives who stepped onto the stage and shared their successes and expertise with everyone. Along with additional presentations, customers shared some really amazing and impactful business results directly derived from NetSuite SRP and NetSuite OpenAir, including:

• FatWire escaped “Excel hell” for resource management, expense management and financial forecasting with NetSuite OpenAir, and drives a global, multi-currency financial organization with NetSuite Financials.
• MetricStream was able to grow rapidly over four years and has an ROI of hundreds of thousands of dollars with NetSuite OpenAir.
• Emergo Group leverages NetSuite OpenAir to help stop revenue leaks, streamline the management of subcontractor invoices and manage revenue recognition.
• POSitive Technology decreased project administration by 90%, accounts receivable lead time by 50%, and increased expense and billing by 35% with NetSuite SRP.
• TECO Natural Resource Group realized 100% ROI on NetSuite OpenAir in just three months
• RIIS seamlessly manages a distributed workforce thanks to NetSuite OpenAir, empowering the company to hire the right resources for the job, despite geographical locations.

Thanks again to all who attended. We couldn’t have done it without our fantastic customers. We are already planning for and looking forward to the SuiteWorld 2012 conference, taking place May 13-17, 2012 in San Francisco. We hope to see you there!

NetSuite SuiteWorld Insight From Epiphany CEO

It’s my first time blogging and it feels like public speaking but in silence. All–in–all a bit unnerving, but rather exciting.

Another exciting first is the opportunity to attend SuiteWorld, NetSuite’s global user and partner conference.  As the CEO of Epiphany, a long standing NetSuite partner and developer, I know this will be a great event.  I can’t wait to see our customers and meet new NetSuite users. I am particularly looking forward to networking and sharing experiences, tips-and-tricks, best practices and more with fellow partners and users.  It is really great to see the NetSuite ecosystem growing and becoming stronger.  

As a Platinum sponsor, Epiphany will host a breakout session at SuiteWorld on May 11, 2011 at 11:00am to discuss how you can be a NetSuite customization hero and make NetSuite YOUR Cloud. Our session at SuiteWorld will feature customers just like you. 

For example, Brian Dougherty from SolarWinds will present.  Brian’s three-person team manages a public company with hundreds of employees and many customizations for a unique software business.  He will illustrate the flexibility of utilizing NetSuite’s scripting and custom records to apply complex business rules associated with re-aligning sales rep territories and all associated customers, opportunities and quotes. For SolarWinds, automation turned a two-day task into a two-hour operation since managers now just “set it and forget it.”

Another NetSuite user is Tom Heideman who manages MasterGraphics’ NetSuite account with 100s of users and a very active web presence.  Tom will share how MasterGraphics is using Epiphany’s e-Contracts module for NetSuite to reduce the workload of what was a month-long process for managing their monthly contracts down to about a week and a half, saving approximately 105 hours and $31,500 per year.

Epiphany’s customers and NetSuite users like Brian and Tom provide us with our best ideas and help us create very robust modules to make NetSuite YOUR Cloud.  We have already started with our various modules like e-Service, e-XL, e-Human Resources, e-Contracts, e-Service, e-Job Costing and our tailored support options. Epiphany customers range from 10-person privately held organizations to public corporations with several hundred employees.  There is something for everyone – come by our session at SuiteWorld or visit us at the SuiteWorld Expo and see how to use workflow, suitelets, tailored dashboards and more. We’ll help you be the NetSuite customization hero your business requires!

See you at SuiteWorld 2011!

Brenda P. Brinkley, CEO
Epiphany, Inc.

 

NetSuite Programme Offers UK VARs Fast-Track to the Cloud

Cloud computing offers a huge opportunity for the UK’s channel community. As adoption of cloud services grows and grows in all kinds of businesses around the globe, the cloud can be a remedy to concerns about the economy (including factors such as the rise in VAT) and dwindling demand for on-premise software. By moving into the cloud, resellers can build valuable recurring revenue streams and capitalise on development platforms, like our own SuiteCloud, which can specialise and differentiate them from their competitors. However, the problem for some resellers has been getting into the cloud in the first place. That’s why we’re so happy to bring our SP100 channel programme to the UK.

The SP100 programme arrives in the UK following great success on the other side of the Atlantic over the last year. It’s designed to get UK channel businesses up and in the cloud as quickly and painlessly as possible, with some revenue incentives that are pretty tough to beat. With SP100, we give resellers a 100% margin payment offer on first year license subscriptions, plus training, go-to-market resources and lead generation support through our SuiteStart service. The 100% margin offer in particular lets channel businesses cover any investment they need to up-skill and prepare their staff for selling cloud services, meaning they can move to the cloud with minimal effort and risk. The press release, which you can read here, explains how UK resellers including Suprasoft have already benefitted from the scheme.

New research just released by IDG predicts huge growth in demand for cloud this year while on-premise continues to stagnate. So for any channel businesses yet to make the jump, the time to do so is now – and SP100 can help them to achieve it.

-Merrill Kindred, EMEA Channel Director

The Decline of Single Instance Big ERP. Why Two-Tier ERP is on the CIO Agenda

Remember back in the middle of last decade, when a single enterprise Oracle or SAP instance from corporate to every sub was all the rage? It was touted as the solution to an enterprise’s visibility and consolidation ills. It was meant to be simple: Just take your corporate SAP or Oracle instance, roll it out to your geos and subsidiaries, and wham, your organization is running like clockwork.

Well, it sounded great on paper, but unfortunately reality bites. The stories started to leak out – multi-million dollar never-ending ERP projects, high profile ERP project failures, inability to tailor the deployment to local subsidiary needs, and over-tapped local IT resources overwhelmed by a monolithic on-premise ERP deployment. And if a division is run as a profit-center, these kinds of deployments can quickly paint red all over the P&L.

Suddenly, the shouts for single enterprise ERP instance across corporate, subsidiaries, and geos dwindled.

But in the vacuum left by single instance ERP failure, the initial need for businesses to tame ERP proliferation hasn’t gone away. Enterprises, stuck with years of subsidiaries using their own choice of ERP has led to a myriad of accounting and ERP packages scattered through the business, all hampering financial consolidation and making subsidiaries performance opaque to corporate. And as businesses expand their businesses into Asia, getting managed, cost effective ERP in place for those subsidiaries is critical. So how do global CIO’s fill the void?

The Advent Two-Tier ERP

Enter cloud computing, and two-tier ERP. A two-tier ERP approach is now front and center for enterprise CIO’s as a method to rationalize their ERP deployments, without the eye-popping bill, or snail’s pace deployment. According to Ray Wang, from Constellation Research Group, interest in two-tier ERP has gone from about 20% in Q3 2009, to nearly 50% in Q1 2011.

So what is two-tier ERP? And how can cloud-based ERP enhance it further? In short, two-tier ERP means running one ERP system for corporate – such as SAP or Oracle, and another, lighter weight, easier to deploy and customize solution throughout an enterprise’s subsidiaries and divisions. It means enabling the sub’s to tailor the ERP to their own industry needs, support their own local accounting requirements. But it also means ensuring that remote subsidiary doesn’t end up with a burdensome, hard to maintain ERP deployment.

NetSuite has pioneered the two-tier model, and coupled it with cloud computing.

As the old ERP vendors jump on the bandwagon, it’s important to recognize that all ERP systems aren’t equal when it comes to two-tier ERP. Some vendors like Microsoft are touting their on-premise solutions like Great Plains or NAV for two-tier. Really? The result is that with GP, you’ll end up with tens, or even hundreds of separate GP instances, and you’ll still have to hire local IT resources to manage each one – and your financial consolidation will be a nightmare. Others, like SAP offer SAP Business One which has the same instance proliferation and on-premise issues or SAP Business ByDesign which lacks any actual real life two-tier ERP deployments (are you ready for SAP to practice its two-tier approach with your budget?).

At NetSuite, we’ve taken two-tier ERP much further. NetSuite OneWorld is cloud based – which completely eliminates the need for local IT resources. We’ve coupled that with enabling businesses to run all subsidiaries in a single cloud ERP instance that can be integrated with the corporate ERP – ensuring smooth financial consolidation. It’s customizable to each subsidiary’s needs – whether their local accounting or specific go-to-market requirements.

And finally this is the biggie, real enterprises like Jollibee, NBTY and many more are using it today in a two-tier model. Cloud two-tier ERP has arrived.

And just a few weeks ago we took it a step further, with a strategic partnership with Informatica – enabling businesses to tightly integrate reference data, financial reporting, and transactional information between NetSuite OneWorld, with their corporate ERP, using the enterprise integration tool of choice – Informatica. The result is the best of all worlds, fewer ERP instances, IT resource reduction, streamlined consolidation, and tight yet flexible integration between the divisions and corporate.

It’s no coincidence that two-tier ERP and cloud ERP have arrived at the same time - the combination delivers on the promise broken by SAP and Oracle years ago.

Paul Turner

@pauljturner99

In Manufacturing, Momentum Swings Toward the Cloud

What a difference a couple of years makes in the manufacturing industry.

It wasn’t that long ago that cloud computing was considered to be some faraway future vision for manufacturing. Meanwhile, many manufacturers were offshoring production to reduce costs, and the sector seemed to be in decline.

Fast forward to today. Now experts are debating the finer points of cloud-based manufacturing as more small and mid-sized manufacturers abandon on-premise software in favor of an integrated Software-as-a-Service (SaaS) manufacturing solution. A recent post called "The Cloud ERP Shortlist for Manufacturers" at Software Advice summed up the trend.

“The buzz around the cloud has manufacturers asking if a cloud solution is right for them,” wrote Derek Singleton, Software Advice ERP market analyst. “The market for SaaS manufacturing software solutions will expand considerably in the coming years.”

And for the first time since 1997, U.S. manufacturers added domestic jobs in 2010—a net increase of 136,000 positions. NetSuite has been observing some of these trends in our business, and a recent review of news headlines corroborated what we’re seeing: Manufacturing is in a rebound, and momentum is swinging towards the cloud.

A recent NPR report called "As Manufacturing Demand Grows, So Do Jobs" noted that U.S. manufacturing added 33,000 jobs in February 2011 alone, contributing to a recent improvement in the unemployment rate. Those jobs are on top of the 136,000 manufacturing positions added in 2010, as reported by Wired magazine.

In its story, Wired focused on a trend of U.S.-based manufacturers re-evaluating their offshoring and onshoring strategies, with some returning production to the states from China and elsewhere. Meanwhile, BusinessWeek profiled SeaMicro, a Silicon Valley computer manufacturer that has bucked industry trends by manufacturing its products in Santa Clara. For SeaMicro, shrinking the supply chain between design and manufacturing allows the company to be faster, more dynamic and more responsive. 

These headlines underscore the ceaseless quest for efficiency and price/performance in mid-market manufacturing. They illustrate that manufacturers are looking to streamline their overall supply chain, optimize information flows to speed business processes, and eliminate points of friction.

Given these objectives, it’s no wonder manufacturing is turning to cloud computing, which gives them data that’s immediately available, consistent and complete without the cost and inefficiencies of on-premise software. Would love to hear your thoughts.

-Roman Bukary, Industries Solution Marketing

Two-Tier ERP - Stories From the Front Line

Recently, Netsuite announced a strategic partnership with Informatica that will enable the development of a two-tier ERP solution for global enterprises.  This development will enable larger companies running legacy on-premise applications (such as SAP R/3) to tightly integrate with Netsuite’s leading cloud ERP solution.  The benefits of such a solution will, without doubt, lead to a significantly faster and more cost effective ERP deployment in new markets.

As someone who has spent much of the last 6 years working with those organisations deploying ERP systems in emerging markets, this development provides further validation of a growing trend that I have personally witnessed from the beginning.   Working closely with customers such as Jollibee and NBTY, both of whom have adopted and executed on such IT strategies, it is easy to see how this development makes so much sense on so many levels.

Since the recent global economic slowdown, developing markets such as Asia/Pacific have been gaining interest from those fortune 500 companies that are finding it harder than ever to make a dime in their traditional North American and European markets. There is a shift towards these potentially lucrative new world economies, and with that shift they are looking to IT systems that can both move quickly and provide future-proof scale.

Until the advent of cloud technology, and products such as NetSuite OneWorld, it was impossible to find business management systems that could offer the best of both worlds.   Taking SAP R/3 as an example, when opening up a new market you could quite easily spend millions of dollars on the software and a further 3 years deploying it.   Then you have to pay people to keep the servers running and an army of consultants to manage the upgrade for you, quite often before you even get the system live.  Economically this simply doesn’t stack up if you are deploying to an office of 200 people in Vietnam.

Jollibee, the Philippines’ leading fast food chain  (www.jollibee.com.ph) faced a similar problem and, with NetSuite OneWorld, were able to deploy a live ERP solution to their Vietnam operation in 3 months.  They then took this same model and applied it to other new markets.  The result is that their legacy ERP investment is protected, whilst giving them an elegant, agile and efficient solution for their emerging Tier-Two markets.  They can now look at acquisition targets in new markets without the threat of IT costs spiralling out of control.

With 36% of large organisations (greater than 1000 employees) now looking at cloud software solutions¹ we should expect to see many more companies recognising the benefits of a two-tier ERP strategy using Cloud ERP such as NetSuite OneWorld and this latest partnership of NetSuite and Informatica will only add fuel to that fire.

¹Springboard Research. August 2010