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Top 10 Quotes from NetSuite’s SuiteWorld 2016

It has been an extraordinarily busy spring conference season. I personally attended 10 events over the past eight weeks and missed a few more because of scheduling conflicts. Of all those I attended, I think NetSuite’s gets the prize for the best sound bites produced in an event. Here are my top 10 favorite quotes from SuiteWorld 2016.

“I love the smell of GL systems in the morning.”

Not. Of course this was said tongue in cheek by Zach Nelson, CEO, and was actually a veiled reference to the context of the next quote. Zach (somewhat proudly) noted that Gartner’s ranking of NetSuite’s Financial Management System (FMS) had progressed from #8 in 2014 to #6 in 2015.

“We didn’t set out to build a Financial Management System (FMS). Our goal was to build a system to run the business.”

Actually NetSuite originally started with three goals: to build an end-to-end system, deliver it only over the cloud, and include ecommerce natively. Of course, in order to deliver an end-to-end solution, it needed a back office accounting solution, but that was just one piece of the puzzle, not the end game. Through the years they were tempted to put servers on premise, especially in the early days before Software as a Service (SaaS) had come into its own. But they resisted. And they made sure even the early solution had a web store.

“We spent $1 billion so you didn’t have to.”

Continuing on the theme of including eCommerce, Zach touted the speed of Suite Commerce, giving some statistics on how it outperforms other leading sites. In a follow-on to Zach’s opening keynote, CTO Evan Goldberg (also one of the original NetSuite founders) noted they had delivered a 33% faster sales order save and 40% faster Suitecommerce advanced page load time. Obviously there is a cost associated with delivering speed and performance, but not a cost that comes directly out of NetSuite customers’ pockets.

“Security bugs? We find ‘em; we fix ‘em. The next morning, all are running with the appropriate patches.”

The reference to security bugs was in the context of a security bug, purportedly reported to and fixed by rival SAP three years ago. Yet some customers had yet to apply the patch and were therefore still vulnerable. My tweet with this quote sparked a bit of a push back from someone coming to SAP’s defense:

This was an SAP API fix that broke ISV integrations if applied, hence SAP made optional. Cloud companies have similar probs

To which I responded: would venture to say in a #SaaS environment, problems don’t linger 3+ years

His response: API fix is a little different, SAP gave customers option because fix could break ISV integrations – it was a useful defect

“Useful defect?” Is there really such a thing? And have we really become so inured to fixes of any kind “breaking” integrations? I hope not.

But the real point here is the value of a multi-tenant SaaS environment. First of all, the customer is relieved of the burden of applying patches. The SaaS vendor pushes them out in (hopefully) a timely manner. And with only a single line of code to maintain, more innovation should come along faster.

The other implied benefit is the value of a platform that allows partners and customers to customize and extend the code without fear of it breaking when fixes and enhancements are delivered.

“Customization is not a dirty word at NetSuite.”

The caveat to this is obviously… as long as you can upgrade. NetSuite customers are all running the same code, yet all are a little different. One of the unique features of NetSuite’s platform (unique for a SaaS-only solution anyway) is the ability to make even complex changes to the data model with no negative impact. This feature is becoming more and more popular among NetSuite’s customers. Within the last year, the ability to add custom fields went from the 5th most used feature to number 1. This actually comes as no surprise to me. My 2016 Enterprise Solution Study asked survey participants what type of customization they required. Fifty-seven percent (57%) selected user-defined fields. Only custom and ad hoc reporting were more widely selected (63% and 62% respectively).

In fact much of the “customization” that is typically required by NetSuite customers does not require you to muck around in code at all. Much can be done through tailoring and configuring, or personalizing screens. But let’s say you want to develop a whole new function that is either very industry-specific or helps you differentiate your individual business. NetSuite does provide development tools for this, including SuiteScript. Per NetSuite: SuiteScript is a JavaScript-based scripting solution for sophisticated coding and debugging within NetSuite that enables developers to build new applications, processes and business rules.”

In addition, a beta version of SuiteCloud Development Framework has recently been released after a multi-year effort. This framework includes all the tools for coding that you know and love, now with team development collaboration, richer code completion, version control, change and dependence management (i.e. discover what code might break if you make this change).

“SuiteScript allows you to do anything your wife wants you to do.”

This quote came from Evan Goldberg, one of the original NetSuite founders. When not performing his duties as NetSuite’s chief technologist, his alter-ego manages his wife’s ecommerce site, which she happens to run on NetSuite SuiteCommerce. The new release of the NetSuite Development Tools has had a profound impact on all developers, including Evan and his alter-ego as both took the stage. While it was quite hard to decipher everything going on (the font was way too small for my eyes, and I haven’t written code in almost 4 decades), it was clear the new code created for Mrs. Goldberg’s web storefront was a lot shorter and faster..

“Our goal is to stay out of your way [to innovate] in your business.”

While first spoken by Evan, this phrase proved to be thematic, popping up in other keynotes and sessions as well. Revamped developer tools were just the beginning. What the NetSuite development team has accomplished with the tools is equally important, if not more so. Among the new features and enhancements were many in the finance area, a new SuiteBilling module, complete with support for new revenue recognition rules for ACS 606 and IFRS 15, and “intelligent” order management. NetSuite places the dual goals of streamlining the development process and customers’ business processes on equal footing.

Disruption caused by today’s digital economy makes digital transformation compelling and the need for agility crucial. Traditionally ERP solutions were more likely to hold you back than to enable transformation. Can NetSuite be an enabler? They can certainly try. And trying is even more important than ever as business complexity increases.

“In the cloud economy everything gets more complex.”

Actually I would say it is the digital economy that makes things more complex. Perhaps in this quote, “the cloud economy” was meant to be synonymous with “the digital economy.” Indeed, it is hard to have a digital economy without the cloud. But I think there is a subtle difference. Cloud is an enabler in helping us participate in the digital economy, both as consumers as well as enterprises. On the one hand, the cloud has made our personal lives simpler. We can order dinner, entertainment, or a taxi ride online. We can shop online and have goods delivered right to our doors. But we can also still shop in a store. Or we can order online and pick up the goods in a store. This is the very definition of “omnichannel.” As we simplify our personal consumer experience, we complicate matters for the enterprise.

“Hybrid business models are the new black.”

Can one system handle all these different ways of conducting business? Certainly traditional ERP solutions made this difficult. They either catered to a retail/cash sale environment or an order-to-pay environment. But today blended environments are becoming more and more common. Many try to accomplish this with different systems. But when these systems don’t talk to each other the customer experience suffers.

But this isn’t the only example of a hybrid business model. We are rapidly entering a subscription-based economy. The software industry led the charge here. Enterprises and consumers alike used to license software and bring it on premise. While this didn’t really mean they “owned” it, as they might own a pair of shoes, in some ways they did own a copy of it. Today, these same software companies are much more likely to sell a subscription to the software.

Now even companies that sell and ship physical products are likely to sell a subscription either along with the product, or instead of it. Consider the water filter company that ships you a device that filters your water for free and then invoices you monthly based on how much water you filter. After a certain period of time, the filter needs to be changed and they charge you when they ship you a new one. Chances are you don’t own the DVR in your home. Your cable provider does. You simply pay for the cable service as a subscription.

More and more companies must invoice based a hybrid business model, invoicing for some combination of product, services or “as a service.”

“If you can sell it, we can bill it (and recognize it.)”

NetSuite’s SuiteBilling module not only supports all these different invoicing methods, but it can also combine them all on a single invoice. While this sounds simple, trust me, there are many solutions out there today that will struggle with supporting all these different billing methods at all, even without trying to combine them on a single order and then a single invoice. I applaud NetSuite for rejecting the option of trying to optimize for the intersection. Instead NetSuite chose to but have to optimize for each and make it easy to combine them.

And because many of these new ways of billing have a signed or at least implied contract, there won’t be too many companies that are not going to be impacted by the convergence of ACS 606 and IFRS 15 (Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606 and the International Accounting Standards Board (IASB) International Financial Reporting Standards (IFRS) 15, Revenue from Contracts with Customers.)

These converged standards for revenue recognition go into effect the beginning of 2018 for public entities, and in 2019 for privately held organizations, bringing very significant changes to financial statements and reporting for any company doing business under customer contracts. While revenue recognition, including expense and revenue amortization and allocation, has never been simple, with these changes, it is about to get harder – at least for a while.

Why? First of all, while you can prepare for the change, you can’t jump the gun. You can’t recognize revenue based on the new rules until those new rules go into effect in 2018. At that point public entities must report under the new guidance and private companies can, but they have an additional year before they are required to do so. So any public entity better be ready to flip the switch, so to speak. But flipping the switch doesn’t only mean recognizing revenue in a new way. For any contract with outstanding, unfulfilled obligations, you also have to go back and restate the revenue for prior periods under the new rules. And for some period of time, you will need to do dual reporting: old and new. In addition, when contracts change, this can potentially have an impact on revenue previously recognized, including reallocation and amortization of revenue and expenses.

NetSuite has been working on this for quite awhile, starting with the support for multiple sets of books, which is how it will accommodate the dual reporting. It is not too early to be planning for this change and using multiple sets of books, you can be looking at how the revenue will be recognized in the future. I have seen some of these before and after revenue reports and the changes are not particularly intuitive. Best to understand what is coming or your revenue predictions for 2018 are going to way out of whack.

Bonus Quotes

While those were my top 10 favorites coming out of SuiteWorld 2016, there were a couple more that you might find interesting:

“Luck should not be a business strategy”

No further explanation required. Real “luck” is a combination of careful planning and hard work.

“The Cloud is the last computing architecture, the last business architecture.”

Sorry Zach, I just can’t agree with this one. I am sure some will immediately think of the famous quote: “Everything that can be invented has been invented.” While some give credit to Charles H. Duell, the Commissioner of US patent office in 1899, others point to a more contemporary source, a book published in 1981 titled “The Book of Facts and Fallacies” by Chris Morgan and David Langford. Either way, whoever said it, was wrong. Maybe Zach is right, but personally whatever the last computing or business architecture will be, I’m pretty sure nobody has even thought of it yet.

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Epicor Announces It Will Grow Business, Not Software

Epicor has a new tag line: “[We] grow business, not software.” The declaration is not quite as radical as it would first appear. In fact it appears to me to be much more evolutionary than revolutionary.

Epicor’s mantra for years was “Protect, Extend, Converge.” As in:

  • Protect its customers
  • Extend its solutions
  • Converge its product lines

However, in 2014 it appeared Epicor was diverging a bit from the convergence strategy, primarily as a result of the merger of (the original) Epicor and Activant. Both had grown through acquisition, but while Epicor’s ERP solutions were multi-purpose ERP (focused primarily on discrete manufacturing) and therefore ripe for rationalization, each of Activant’s products was purpose-built for distribution, and over time each had become even more focused and fine-tuned to specific segments of wholesale distribution. And then there was the SolarSoft acquisition (2012), which brought along an ERP which focused on more process-oriented industries, and also a “best of breed” manufacturing execution system (MES). And finally there was Epicor’s retail business, which was actually spun off last year.

So while the “Protect” and “Extend” sentiments of the message are still very much alive, convergence gave way to a new message. Last year, Epicor’s (new) CEO, Joe Cowan declared the company would be “totally focused on the customer.” This year’s tag line seems to me to be a simple extension of that customer focus. Software is not the end goal. The goal is to help Epicor customers grow their businesses. It just so happens Epicor will develop software and provide services to make that happen. And a lot of the software will be delivered as a service, as evidenced by the appearance of a fluffy white cloud in the middle of the tag line.

Epicor tag line

Of course in having a tag line like this, Epicor needs to be careful not to make the message itself too fluffy. And in promising to help customers grow, Epicor will have to execute a delicate balancing act, balancing what the customers say they want and what Epicor knows they need. This is particularly true of those customers still running older legacy solutions. Epicor has promised not to sunset those products. And yet if you really understand the demands and opportunities of the new global, digital economy, you know you can’t be competitive without modern, advanced technologies.

Customers running legacy solutions won’t benefit as much from the latest and greatest development, but that’s not to say they won’t benefit at all. Epicor has been a bit quiet on the technology front for the past few years, but that is not the result of lack of attention. In fact it has been doing a lot, sometimes at the expense of new features and functions. Its advanced technology architecture (ICE), visionary at the time of its initial release circa 2009, has undergone a technology refresh of its own, and it also paves the way forward for both strategic products like Epicor 10, Prophet 21 and others, as well as legacy solutions like Vista and Vantage,  etc.

Now that that refresh is complete (for now… after all, technology continues to advance at an ever-accelerating pace), you’ll see more aggressive development of features and functions. Epicor is picking up the cadence of releases, shooting for twice a year (spring and fall) for its strategic products, which of course will garner more of its resources. But even legacy solutions will benefit from the development of external components, which can be used across different product lines. Prime examples include web portals, dashboards, self-service functions, mobile apps and other new features. And developing these components as web-based services (delivered through the cloud) will have the dual purpose of extending solutions and gently pushing those running primarily (or exclusively) on-premise towards the cloud.

I agree with Epicor’s new CTO, Himanshu Palsule, who called the transition to the cloud “inevitable.” But it won’t happen overnight (Figure 1). Part of the reason for this slower, yet steady growth is the fact that there are so many on-premise solutions in production today. And many remain reluctant to simply rip and replace solutions that are essentially getting the job done.

Figure 1: What percentage of your business software is deployed as SaaS?

Fig 1 EpicorSource: Mint Jutras 2016 Enterprise Solution Study

In his main stage keynote, Himanshu also (very astutely) observed that for a topic that is so widely discussed, “cloud” is still misunderstood and means different things to different people. My research supports his observation. While many use the terms cloud and SaaS interchangeably (I find myself guilty of this at times), they are not the same. While all SaaS is cloud, not all cloud is SaaS. While only a small percentage (12%) in 2015 didn’t know how they preferred cloud to be delivered, that percentage didn’t shrink in 2016 (Figure 2). There is still some education to be done. If you count yourself among those that “don’t know,” don’t be afraid to ask. You’re not alone.

Figure 2: How would you prefer cloud to be delivered?

Fig 2 EpicorSource: Mint Jutras 2016 Enterprise Solution Study

I’ve written extensively about the anticipated appeal of SaaS, along with the benefits actually realized. But I wouldn’t disagree with Himanshu’s conclusions about what cloud should stand for:

  • Choice
  • Convenience
  • Cost Control
  • Customization
  • Collaboration

However, I would qualify two of his bullet points. A few years back, my survey participants placed a high value on choice of deployment options. They seemed to like the idea of portability and the ability to move from on-premise to SaaS and from SaaS back to on-premise. Today many are looking for a path that helps them move from on-premise to SaaS, but once they move to SaaS, they almost never go back unless forced to (e.g. they get acquired by a company running a licensed, on-premise solution). So having multiple deployment options available is no longer such a high priority. Prospects simply pre-qualify those solution providers based on the deployment option they prefer.

I agree that choice is important. But it is more important to Epicor as the solution provider than to its customers and prospects. There are still some environments where a real multi-tenant SaaS solution might not be the best choice – at least not right now. These might be heavily regulated industries that require solutions to be certified, and re-certified when they change. Or a heavily customized solution may be required. And customization is the other bullet from Himanshu’s list that needs to be well-qualified.

Not all customizations are created equal. First of all, some simply aren’t needed. They might be left over from an implementation of a solution with far fewer capabilities than available today. Or they might have resulted from a “that’s the way we’ve always done it” mentality. If customization does not differentiate you in your market, I would seriously question whether it is justified.

Furthermore, customizations can be implemented in a variety of ways. Invasive code changes and SaaS don’t make for a good combination. But if customizations can be added as external components and linked back to ERP through Web APIs, or if they can be implemented through configuring the software without mucking around in the code, they may be perfectly compatible.

So Epicor’s announcement this week of its “cloud-first focus to support digital transformation of wholesale distributors is spot on”. The Mint Jutras 2016 Enterprise Solution Study found wholesale distributors lagging behind other industries in preference for and adoption of SaaS solutions. We also found 47% to 73% still relying heavily on paper for their operational and transactional system of record (customer and purchase orders, expense management, payments, etc.). They lag behind other industries in spite of the fact that ecommerce and their proximity to consumers puts them at a higher risk of disruption from the digital economy. Perhaps this “cloud-first” focus will be the gentle push wholesale distributors might need to start down the path of digital transformation.

Indeed, Epicor says it will be “…doubling-down on helping distributors adapt to these shifting dynamics of the marketplace—with an added focus to ushering customers’ journey to leverage the power of cloud-based solutions to drive increased productivity and achieve a differentiated customer experience to grow their business.”

Indeed wholesale distributors aren’t the only Epicor customers that will benefit from this “doubling-down.” I heard similar plans from the Epicor 10 side of the house, including planned features and functionality, along with efforts to improve simplification and usability. Yes, it’s about the overall user experience, but those driving the products seem to understand it’s not just about the “pretty software” you hear so much about today. As business models change, as technology advances and as new innovative products come to market, Epicor’s product must be easy to use, easy to install, easy to manage, and easy to change when the need arises.

Epicor “gets” it. We’ll be watching to see if it delivers.

 

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New Group at Infor Helps Customers Navigate Digital Disruption

Hook & Loop has been part of Infor now for several years. It is the “creative lab” inside of Infor. Notice I didn’t say “creative agency.” That is a term that is typically associated with advertising agencies, full of those creative types like writers and graphic artists, even filmmakers. There are a lot of those creative types at Hook & Loop, but its charter goes way beyond that of the typical agency. In their own words, Hook & Loop’s is “a collaborative team of designers, information architects, developers, project managers, writers, and filmmakers who are redesigning the user experience for Infor’s software products and envisioning the future of the Infor brand itself. Our mission: change the way people work and think about work.”

Back in early 2015, Diginomica’s Jon Reed did a great job of describing what Hook & Loop was setting out to accomplish. If you aren’t up to speed, you might want to take a moment and review Jon’s Inside the Enterprise UX revolution – a day at Infor’s Hook & Loop. But for here and now, it suffices to say that the Hook & Loop charter went beyond a fresh new user interface (UI). It set out to create a whole new “holistic” user experience (UX) using a unified design methodology.

Infor is now taking this a step further and spinning out a new group from Hook & Loop. It’s called H&L Digital and its proclaimed mission is to create “Differentiation through personalized digital experiences at scale that help enterprises outpace digital disruption and unlock digital growth opportunities.” That’s a mouthful that exposes Hook & Loop’s “agency” lineage.

So let’s move beyond the “agency-speak.” The real purpose of the new group is to help customers navigate digital disruption and achieve a competitive advantage. How do they do that? At its recent Innovation Summit (really an industry analyst day held at corporate headquarters in New York City), Infor attempted to answer that question through examples. We heard about some of its biggest, best and most impressive projects.

Among them was Sports City, a large franchise of stores featuring sports apparel and accessories. H&L Digital helped them transform their brand from a big box retailer surviving on promotion-driven transactions to a branded, sporting goods community leader, attracting those with a passion for sports. This was as much of a branding exercise as it was an ecommerce project, but indeed there were many moving parts from store design to custom application development.

Part of the project was developing an app for coaches of clubs, community and school teams. Through this app, coaches can share online all the equipment kids on the team will need, including specific product options and recommendations within different price ranges and even a pre-owned marketplace. Equipment fitting and a fitting room app also help take the guesswork out of shopping for equipment. That results in Sports City brand loyalty and increased sales. Coaches also can set up their own dashboards for player performance and team optimization, making Sports City the “go to” online destination for all their needs – a far cry from a big box retailer.

H&L Digital also helped transform Nutritious Feed Co. from an animal feed supplier to an animal health provider. Several different customer-facing applications emerged from that project, including Connected Cow Tracker, Total Farm Management, Farmer App, and Animal Health – hardly apps that are in the typical enterprise app portfolio. But the project also attacked more universal challenges like employee engagement and operational efficiency.

Through these presentations and others I was struck by how truly innovative this approach is. H&L Digital helped these companies not only with tools to help them run their businesses; they helped them uniquely re-brand themselves in a completely new light within a digital economy. But I also walked away thinking, these are very big, very custom projects. Translation: very expensive.

In a way it felt like déjà vu all over again. These “custom” projects were reminiscent of the homegrown apps of the 70’s and 80’s. Nobody believed you could have pre-packaged apps back then. Companies believed themselves to be unique and therefore built their own applications. And of course only large companies with deep pockets could (can) afford something with this kind of “Wow!” factor. So the big companies got bigger and stronger and smaller companies “made do.”

Of course, we all know what happened after the 70’s and 80’s. Over time vendors were able to package more functionality and more flexibility, at a more affordable price, so the playing field was leveled and virtually everyone began using pre-packaged solutions. But sitting through these presentations I was beginning to feel like the playing field was no longer level. There would definitely be the “haves” and the “have nots.” Somehow I don’t see Connected Cow Trackers and coaching dashboards becoming part of a standard enterprise application portfolio. So is H&L Digital destined to simply be a high-end provider of custom “luxury” apps?

That’s what I thought at first, but a visit to the H&L Garage (where all this stuff is built) made me think differently. The “creative” teams at H&L Digital do indeed start with a pretty blank sheet when they start to strategize and design. But when it comes to delivering new applications, it is very much an assembly process. The teams talk a lot about creating “wizards.” Wizards essentially assemble a series of components – some custom, some standard (re-usable) under a unique, custom-designed skin, so to speak. This is what makes each project look and feel entirely unique and custom. But if you look under the covers, the components of many of these “unique” processes share a lot of common components.

Outfitting a little leaguer is really just a standard configure-price-quote function and Infor has standard products that deliver that functionality. Is managing player performance really all that different from a sales manager monitoring sales rep performance? The metrics used might be different, but the dashboards probably look and behave quite similarly. Couldn’t you use a lot of the capabilities of monitoring movement of a fleet of trucks to help track cows? I bet “maintenance” schedules of equipment and cows share some common components as well, even though the user interface might appear very different.

So far all these projects have a healthy dose of custom development. But the more of these components Infor develops, the more it will have on the shelf. Over time, more and more components will be standard. This is crucial because companies of all sizes face risk of digital disruption.

Our 2016 Mint Jutras Enterprise Solution Study asked survey respondents to identify the level of risk of their industry (and their business) being disrupted, citing examples like Uber, Airbnb, NetFlix, etc. Almost two thirds (63%) face medium to high and imminent risk and the risk level of small companies (those with revenues under $25 million) is only slightly lower.

Figure 1: How much risk do you face in your industry being disrupted?

Infor fig 1Source: 2016 Mint Jutras Enterprise Solution Study

And yet small to mid-size companies are not nearly as well prepared to face these challenges.

Figure 2: How prepared are you for today’s digital economy?

Infor fig 2Source: 2016 Mint Jutras Enterprise Solution Study

So if Infor is able to successfully come down market and satisfy the needs of both large and small companies – even those with small budgets – there is certainly a big market waiting for it. I, for one, am routing for the little guys and hope to see H&L Digital continue to leverage Infor’s vast tool set and product portfolio to become the “go to” vendor for all companies facing the challenges of digital disruption.

 

 

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SAP Anywhere Moves Beyond eCommerce to Provide Complete Front Office

Marketing, Sales and Service for SMBs

At first glance SAP Anywhere might appear to be just another new eCommerce solution for online retailers. But if you dig a little deeper you find much more. Purpose built for the small to medium size business (SMB) with a digital presence, it is a complete front office solution. It is a multi-channel commerce and marketing platform designed to be mobile first, low-touch and easily extensible. It supports SMBs in their efforts to:

  • Design and manage marketing programs and leads
  • Manage inside sales and customer service
  • Have visibility into what’s being sold, through which channel
  • Process online and in-store orders in one place
  • Track and manage inventory

Yes, SAP Anywhere targets retailers, but also recognizes the evolution in the way products are bought and sold today. Not only do retailers sell through multiple channels (online, in store and anything in between), but also more and more manufacturers and distributors have at least one sales channel where they eliminate the middleman and sell directly to the consumer. This places new demands on the business at the point of sale, demands typically not easily addressed by back office solutions such as enterprise resource planning (ERP).

SAP has taken a modular approach to satisfying these needs. Rather than building more complexity into the ERP solution itself, forcing upgrades or replacement, it loosely couples the front office to existing back office solutions. If you are an SAP Business One or SAP Business By Design customer, the integration is out of the box. But the platform approach of SAP Anywhere also allows it to be easily connected to any back office – virtually anywhere.

Supporting Any Model, Anywhere

When it comes to managing the sale of goods, retail and manufacturing/ distribution are typically worlds apart. In retail, at the point of sale you deal with cash, check or debit/credit card; the customer walks away with goods in hand and inventory is depleted. In manufacturing you process your customer’s purchase order, create a sales order and subsequently ship and invoice, relieving inventory and creating accounts receivable. Later you receive cash and apply the cash receipt against accounts receivable either on an open item or a cash balance basis.

Receiving cash in a traditional point of sale system in a retail environment, either in store or online is easy. Managing an open account is more difficult. For a manufacturer or distributor using an Enterprise Resource Planning (ERP) system, managing accounts and accounts receivable is standard practice. Processing a cash sale is more difficult.

In a retail store, the cash in the drawer is reconciled against the sales recorded at the end of the day. In a manufacturing or distribution environment shipments, invoices and cash receipts are reconciled at the end of the month. Yet in all cases, everything must be posted to the general ledger in order to create a balance sheet and profit and loss statement.

So what happens when a manufacturer or distributor sells directly to a consumer? It happens more and more today in showrooms and factory outlets, as well as online. In eliminating the traditional retailer, does the manufacturer need to invest in a retail point of sale (POS) solution, an eCommerce solution, as well as a back office ERP solution… and then interface or integrate them all in the hope they will one day all work seamlessly?

SAP Anywhere supports all these different environments at the point of sale without causing you to jump through hoops, automatically sending the necessary transactions back to ERP, whether you post an order, to be followed by shipment, invoice and payment or whether it all happens at once. And with SAP Anywhere, it’s not just about being able to take cash for a product in hand. Manufacturers or distributors might have a virtual showroom from which you can place a more traditional business-to-business (B2B) order. The manufacturer or distributor might have the goods in stock to be shipped and invoiced, or it might take an order, source the product and have it shipped directly to the customer. SAP Anywhere supports any and all of these different business models.

And these business models, and even prices, may vary by channel. Are you selling direct, through distributors or through online commerce companies like Amazon or Alibaba? Today are they all forced to use the same catalog and pricing? Or are you forced to create (maintain) separate catalogs for each? Can you tie a channel to a specific warehouse or fulfill all orders from a central distribution point or anything in between? If using a central warehouse, can you reserve inventory for a specific channel? All of these options are supported by SAP Anywhere. Perhaps SAP should call it SAP Anywhere Anyhow.

Flexibility in Payment

SAP Anywhere can also accept a variety of payment methods common in a combination of online and physical retail outlets including in store, showroom, warehouse or simply “in person” transactions (think about a service technician selling a spare part). These payment methods include cash, debit card and stripe (payments infrastructure).

In a physical setting, the application itself supports bar code scanning directly from the mobile device on which the sale is captured, without any added hardware. Or you can add an external scanner connected via Bluetooth. In addition to the scanner you might also connect a printer and make use of cash drawer functions that allow the use of any personal computer with a “locked” cash drawer, all while keeping track of total sales for any day broken out by payment method.

Customer Lead Generation

Completing a sale is great, but not necessarily unique to SAP. However, there is more to the front office function than just selling. The front office is also tasked with creating demand and acquiring new customers. These marketing functions are typically supported by separate applications, if at all. Many SMBs today see digital marketing as an affordable alternative to more traditional software to manage marketing campaigns. But they then struggle to tie these digital campaigns back to the transactions for closed loop marketing.

The next area of investment in developing SAP Anywhere is in the realm of digital marketing. Look for instant integration with Constant Contact and Mail Chimp, both of which can track clicks and other campaign statistics. Next on the docket are search (think Google ads) and integration with social media to integrate campaigns into Facebook, Pinterest, Twitter, Instagram and LinkedIn.

Where and When?

SAP Anywhere isn’t available everywhere… yet. It launched in Beijing in October, in partnership with China Telecom. SAP is planning to launch in the United Kingdom soon, to be followed shortly thereafter in North America. But it will need to continue to expand geographically if it wants to achieve its goal of 100,000 customers within five years. Along with that customer count goal comes an annual revenue goal of $200 million. Because this solution is completely cloud-based, all sales will be by subscription.

If you do the math, this means average annual revenue per customer of just $2,000, making it quite affordable and appealing to the SMB market.

In Summary…

SAP seems to have very aggressive plans for SAP Anywhere, targeting growing SMBs interested in having more customers. And today, who isn’t? The Internet levels the playing field for expansion and growth. But growing your customer base today also requires a digital presence – one that is very carefully orchestrated from lead generation to customer acquisition to customer retention. Don’t settle for just one piece of the puzzle. Make sure you start down a path that can take you Anywhere you want to go. Perhaps SAP Anywhere can help.

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NetSuite Takes Omni-Channel Commerce to the Great Outdoors

What do camping gear, nutrition bars, portable ultraviolet water purification systems and surfboards have in common?

  1. All are consumer products, consumed by outdoor enthusiasts
  2. All are sold by national retailers like REI, Bass Pro Shops and Eastern Mountain sports
  3. All are also sold online
  4. All are manufactured by companies that once ran QuickBooks but today use NetSuite to manage their businesses

These companies were among 33 exhibitors at the Outdoor Retailer Summer Market 2013 show in Salt Lake City, Utah that run NetSuite cloud-based solutions. NetSuite of course capitalized on this event to highlight its recent wins in the outdoor industry. Featured prominently in NetSuite’s press release was the concept of omni-channel commerce. Omni-channel is all the rage amongst retailers, but if you don’t follow retail closely, you might be asking, “what’s that?” In short, omni-channel retailing “is a seamless approach to the consumer experience through all available shopping channels.” And what are these different channels? Stores you visit in person, catalogues you get in the mail, 800 numbers you call after seeing an advertisement on television, websites you visit from your computer or your mobile device.

Have you ever bought something online and wanted to expedite delivery by picking it up at a nearby store? Or maybe when it arrived it didn’t fit and you wanted to save the shipping cost and just bring it back to the store? How about when you go to the store to make a purchase and the item is out of stock? Maybe you’d like it shipped directly to you from a regional warehouse or directly from the manufacturer. As a consumer, these all sound like logical alternatives and perhaps you get annoyed when you can’t “mix and match” your channels. If you can’t, then it is probably because manufacturing, distribution and each of those retail outlets are all running separate systems that don’t (or can’t) “talk” to each other.

So if you think omni-channel commerce is just a retail issue, think again. It also impacts wholesale distribution and even manufacturing. While many struggle with this even today, others have made the leap to fully integrated solutions that support the omni-channel experience.

NEMO Equipment, for example, is a designer of innovative tents, sleeping bags and pads and other camping gear. Its products are sold both online through its own custom-built web storefront, as well as through about 300 retailers including REI and Eastern Mountain Sports in North America, and internationally in Europe and Asia. Up until recently (January 2013) it was trying to piece all this together with QuickBooks, but today uses NetSuite for financials, inventory and order management, CRM and PCI-compliant credit-card processing. Consolidated inventory management allows NEMO to also compartmentalize inventory, virtually segmenting direct-to-consumer, B2B and US military sales channels while cutting pick, pack and ship time in half.

Liberty Bottleworks is another example. The company prides itself in making the only metal bottle on the market that is entirely made in America. Therefore it can’t rely on off-shoring or other low-cost country means of reducing costs. It relies instead on operational efficiencies to create a strong bottom line. It uses NetSuite financials, manufacturing, inventory, order management, CRM and eCommerce, with a direct-to-consumer website powered by NetSuite SuiteCommerce to manage its business end-to-end while also expanding its retail network to about 1,400 including REI, Whole Foods and L.L. Bean. But its omni-channel commerce has a bit of a unique twist.

In addition to its B2C online sale of standard metal bottles and its distribution through regular retail outlets, Liberty Bottleworks also offers custom bottles. Want your logo and company name on a bottle? No problem. Liberty Bottleworks can do that for you. In fact it does just that for corporate customers like Coca-Cola, the Seattle Seahawks and even NetSuite itself. While the company expected this to be about 10% of sales, this part of the business has recently exploded, which has added a level of complexity that would be unmanageable without an integrated solution to support it. NetSuite supports Liberty Bottleworks in managing up to one million components (who would have thought?), including recycled materials.

These are just a couple examples of companies manufacturing consumer products that face a level of complexity added to a business that once might have been relatively simple. As consumers expect and demand more choice, merchants, distributors and manufacturers require an added level of seamless integration that is impossible to achieve with spreadsheets and desktop-bound solutions.  In order to manage the relationships between consumers, retailers, distributors and manufacturers, you need seamless integration of financials, ERP, CRM and eCommerce. Yes, it’s a tall order, but consumers demand it. And with the right solutions, the opportunity for companies like Liberty Bottleworks and NEMO Equipment is as big as the great outdoors.

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