Posted by Tony Kontzer, Guest Blogger
If there's one message NetSuite CEO Zach Nelson wanted to get across during his keynote address at SuiteWorld 2014, it was that today's organizations need to be able to redefine themselves on the fly, and that there's no better platform than the cloud to make that possible.
"The clean lines between what a company used to be and what it's becoming are blurring," Nelson said to 6,500 attendees packing the San Jose Convention Center hall. "Product companies are becoming service companies and service companies are becoming product companies. And this is causing a fundamental change in how you need to run your business."
Every company, Nelson said, is becoming a cloud company whether it intends to or not, and thus each one must determine how to best use the cloud to connect with customers, employees, partners, and even competitors.
Along those lines, NetSuite has launched a B2B Customer Center, built on its successful SuiteCommerce platform, that's designed to give companies an Amazon.com-like environment for conducting B2B transactions.
The new service already has had a transformative effect on VHA Corp., which, as the largest master agent for Sprint Prepaid Group, shipped 1.3 million prepaid phones during 2013 to independent Boost Mobile and Virgin Mobile retail locations. The company, which had a disconnected B2B ecommerce portal that supported just five percent of its business, knew it needed to entice more retailers to place orders via the portal. But it would have to make a change, as investigation revealed that the obstacle was retailers' desire to be able to access more data, and be able to do more with it once they had it.
To enable that change, VHA turned to NetSuite with a simply stated yet ambitious goal: move 50 percent of its transactions to the B2B portal within 90 days.
"We missed it by two weeks, but we hit the 50 percent," said an obviously pleased John Martinez, director of information systems for VHA, making a cameo appearance during Nelson's keynote.
Nelson also announced NetSuite’s ability to support government-to-government, or G2G, services through a marketplace for agency-to-agency transactions. That solution has already streamlined procurement in the state of Texas.
Vijay George, CTO of the Texas Office of the Comptroller, which manages procurement for state agencies, told SuiteWorld attendees that his staff had identified the need for a centralized purchasing portal as early as 2009. The goal was to enable agencies to pick the items they need, put them in an online shopping cart, and purchase them, as if they were ordering Christmas gifts. In other words, he wanted to turn his agency into a sort of statewide clearing house.
Unfortunately, George said, the vision was ahead of the technology, and a multi-year implementation that glued together an array of on-premise technologies resulted in a portal, TxSmartBuy, that achieved significant adoption, but which was clunky and hard to maintain.
"The vision was correct," said George, "but we kind of peaked out" due to technology limitations and a poor user experience.
The comptroller's office opted to NetSuite's portal. It even had to get state legislators to pass a bill expanding the definition of enterprise resource planning in the state's accounting codes in order to make the switch possible.
That bill appears to have been a good decision, as the NetSuite portal has proven to be three times as fast as its on-premise predecessor, with greatly reduced maintenance needs and improved usability.
Today, 220 state agencies are using the cloud-based TxSmartBuy to pick from among 2.4 million items ranging from pencils to road aggregate to food, and George says some 3,500 local agencies have also signed up to take advantage of the state's pricing deals. So far, the portal has supported more than $1 billion in purchases.
More to the point, TxSmartBuy, not to mention VHA's retailer portal, represents precisely the kind of business model tweaking Nelson insisted organizations must embrace.
"New ideas are forcing you to rethink how you do business," he said.
If companies can respond as creatively as VHA and the Texas Office of the Comptroller did, they'll be one step ahead of the game.