ERP & NetSuite: A Quick Introduction [5 min]

Here We Go Again

It's a warm summer afternoon, where I find myself sitting across from Sam, an old friend from school, sharing our experiences over a cup of coffee. As we reminisce about our past and discuss family life, the conversation naturally shifts towards our careers.

"So, what do you do for work these days?" Sam asks, taking a slow sip from his steaming coffee.

"Well," setting my cup down and leaning back in my chair, "I've recently transitioned into a new role. I'm now a Consultant specialising in NetSuite ERP."

Sam nods curiously, "That sounds interesting." Yet, beneath his polite response, I can sense the unspoken questions forming in his mind: 'Net Sweet? What on earth is ERP? What exactly does a Consultant do?'

This is a familiar scene. Terms like 'ERP' and 'NetSuite' often puzzle those outside the industry. As such, I recognise it's time for me to do my part and attempt to demystify the world of ERP and NetSuite.

Understanding ERP: The Backbone of Modern Business Operations

Enterprise Resource Planning ("ERP") is a term that first emerged in the early 1990s, coined by the Gartner Group. However, its roots date back to the 1960s, with Material Requirements Planning ("MRP") systems designed for inventory management in manufacturing companies.

In essence, ERP is a type of business management software that organisations use to oversee and integrate their core business processes. It acts as a central hub, connecting various departments of the business, such as finance, manufacturing, sales, human resources, customer support, and many others.

The software offers an integrated, bird's eye view of a company's operations, helping decision-makers in making data-driven decisions and boosting overall efficiency. Let's take a simple example of your business: Without an ERP system, if a customer buys the last item in your store, you may only realise during your next inventory checks that you need to order more!

With an ERP system, as soon as your stock is running low, the system can automatically notify the purchasing department to reorder stock. This ensures the item is restocked quickly; minimising delays and improving customer satisfaction.

As you can see, ERP systems rose to prominence due to a clear and pressing need: efficiency. As businesses grew and operations became more complex, managing disparate (separated and different) systems and departments became an overwhelming challenge. The need for a unified platform that could integrate various functions and enable seamless data flow between them became apparent. This is where ERP systems came into the picture.

NetSuite ERP: The Cloud Based Powerhouse

A Journey through Clouds

NetSuite (originally NetLedger), founded in 1998 by Evan Goldberg, entered the scene as one of the pioneers in delivering business applications via the internet or "cloud". Acquired by Oracle in 2016, NetSuite has since grown to be one of the most popular cloud based ERP systems globally.

Fun Fact: NetSuite was the first cloud computing company (1998), along with Salesforce (1999).

During that era, the market for business software was dominated by either basic PC-based solutions like QuickBooks (inadequate for growing businesses) or complex on-premise software that required substantial IT support.

In 1998, a team of former Oracle employees had an ambitious dream: to replace these complicated on-premise systems with a user friendly, cloud based system that simplifies business management.

Starting with just basic accounting and customer record management features, NetSuite gradually evolved into a comprehensive suite, catering for a wide variety of businesses (various industries). This steady growth and future potential led to its acquisition by Oracle itself in 2016, aiding its continued expansion.

NetSuite ERP: A Leading Cloud Based Solution

NetSuite is a unified business management suite - a system designed to handle all major facets of managing a business. It encompasses ERP, Customer Relationship Management (CRM), e-commerce, and other key business capabilities. It is designed to serve as a single system for running a business, catering to a broad range of industries including retail, manufacturing, software, services, non-profit, and more.

Consider the earlier example of managing your inventory. With NetSuite, you'll have the tools to manage your inventory more effectively. The system alerts you to take action when stock is low. Procurement processes can be managed within the platform, to issue Purchase Orders to suppliers, and tracking the delivery of goods. Once the goods arrive, your inventory can be updated accordingly in the system. The payment process can also be handled within NetSuite. Overall, the system streamlines all processes, helping reduce errors and increasing efficiency.

NetSuite offers real-time data visibility, ensuring that every transaction made anywhere in the business, is immediately reflected in your financials, inventory, customer records and other relevant areas. This allows business leaders to make informed decisions based on accurate, real-time data.

Areas Covered by NetSuite ERP

Below is an example of some functions and processes covered by NetSuite:

• Reporting: Gain real-time insight into your operational and financial performance while automating various processes.
• Financial Management: Use strategic tools for planning, budgeting, forecasting, and analysis to manage your business's finances effectively.
• Accounting: Modernise your general ledger, optimise accounts receivable, automate accounts payable, and gain a comprehensive view of cash flow.
• Global Business Management: Manage different currencies, tax rules, and reports across various locations and subsidiaries.
• Inventory Management: Automate your inventory management to lower handling costs and optimise cash flow.
• Order Management: Streamline the order process by removing manual bottlenecks and preventing errors.
• Supply Chain Management: Simplify the movement of goods and materials across your supply chain.
• Warehouse & Fulfillment: Enhance warehouse operations and minimise handling costs by eliminating manual processes.
• Procurement: Centralise and automate purchasing processes to control spending and save time.

Conclusion

So what is ERP and NetSuite? ERP is a type of business management software, and NetSuite is an advanced, cloud based ERP solution, fully equipped to manage all aspects of a business. It benefits businesses due to acting as a single, unified platform, enhancing operational efficiency and providing essential tools for business growth.

This is precisely why, it is a top choice for many businesses worldwide.