iTWire recently spoke to two retail executives who adopted cloud-based ERP system NetSuite in 2015: Tim Rosenfield, chief executive of Lingerie Company of Australia, and Ben Irving, chief operating officer of Mons Royale. They shared their experiences as to why they needed an ERP system, how they moved to it, and what they would do differently now.
Here are six lessons to help you in your ERP transition.
1. Know your driver for moving to an ERP platform
Lingerie Company of Australia knew it needed to change; its system was proving more difficult to maintain and lacked modern features. The company was moving into an EDI partnership with David Jones, effectively running a "store within a store" and knew it needed a solid ERP system which supported wholesale, retail, e-commerce and EDI.
Irving joined Mons Royale in October 2014 and "almost immediately a distributor in Europe fell over". Irving had to solve that problem and quickly recognised the business requirement for a global multi-currency system which would also facilitate taking control of their manufacturing in China. He spoke to the chief executive and explained the need for an ERP system, though, with only seven employees and low revenue the pair considered whether this was premature at the time.
2. Consider carefully, and consult experts
Once the decision was made for an ERP system it became a matter of identifying which one.
In my personal view, having assisted large organisations in implementing ERP systems, it is very important to commence your search with a list of your own requirements. You must understand what your own business does and what it needs, then grade and rank platforms against this, rather than against each other. Else you miss important requirements and you compare features which may not be relevant.
This was the approach for both Rosenfield and Irving who knew what they needed in their ERP system. Rosenfield required a system which equally supported back office and retail. He found many products were either "full-on back office, or full-on retail" but he needed both systems.
Rosenfield evaluated Pronto and Microsoft Dynamics but was concerned about the capabilities of both products suiting his scenario. He was led by the vendor to resellers who proposed solutions which bundled the core product with additions. For Microsoft Dynamics, the partner had a retail add-on that it claimed would suit Lingerie Company of Australia's requirements, yet Rosenfield felt Microsoft already touted Dynamics was good at retail so the need for a third party add-on seemed a mixed message to him.
Rosenfield selected NetSuite as it was the only ERP which he saw as being equally strong in back office and in retail, and as the core platform rather than supplemented by add-ons.
At Mons Royale, Irving consulted IT executives he knew, soliciting their advice. Already using Xero, Mons Royale appreciated a cloud-based approach rather than on-premises and certainly needed a single system which would support their global operations, able to log any stock change in any currency once, with no requirement for manual processing in multiple systems. He knew he wanted something that could be implemented in a short time.
Irving considered SalesForce but felt it had too many APIs and as they were not a technology company he didn't want to have to deal with API issues every time the platform was upgraded. He also had difficulty finding suitable SalesForce plugins to support his business.
Like Rosenfield, Irvings' search ultimately led him to NetSuite.
3. Select your partner carefully
Lingerie Company of Australia worked with NetSuite directly and did not involve partners in its implementation.
Mons Royale, by contrast, encountered difficulties with two partners before finding a third partner who was able to assist.
While this partner performed a competent job, Irving says on reflection he would have preferred to work with NetSuite directly. His partner company was New Zealand-centric and he felt Mons Royale hit the edge of their capabilities. The partner would turn to NetSuite for advice and hence Irving feels he would have simply been more efficient if he had been given the option to bypass partners and work with NetSuite from the start.
"If we had a partner with all the capability NetSuite has, then we would have been very happy," he says.
NetSuite's vice-president of sales for the Asia Pacific region, Mark Troselj, says NetSuite typically encourages a business to hire someone as a NetSuite administrator. Small companies can't normally support that expense, and so NetSuite invests in the partner ecosystem to provide local and more personalised support than NetSuite may be able to offer, with partners able to act as de-facto administrators for a business.
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4. Hire someone
Lingerie Company of Australia selected NetSuite in March 2015 and went live in November 2015.
Mons Royale selected NetSuite on January 30, 2015 and went live on May 1, 2015.
Both of these timeframes would ordinarily be unrealistic at worst, or aggressive at best, with a traditional on-premises ERP provider. In the case of these companies as they had chosen a cloud-based platform the deployment time was slashed considerably.
This disrupted the business, according to Rosenfield. He made the decision to act as project manager, in conjunction with his role as chief executive. He says he was not prepared for the amount of time he had to give to the project. "I would have employed a full-time person if we knew," he says.
Irving agrees, having supported the implementation in his capacity as chief operating officer. He says the biggest challenge in an ERP employment — be it NetSuite, SAP, Microsoft, Pronto or another product — is the engagement from the customer. Yet, "you're trying to run your business while being asked questions".
If able to do it all again, Irving says he would have hired someone who could find solutions to problems without them sitting on the desk of the chief operating officer or chief financial officer.
As to the type of person, Rosenfield says he would recommend someone with a NetSuite background and with scripting capability.
Irving recommends "a good, smart person," adding they "must be internal. It can't be NetSuite, it can't be a partner, only an internal person can advocate for your business".
Troselj's comments above are relevant; he advocates a company hire a NetSuite administrator. This person will work on all the aspects leading to go-live, then after go-live will administer your ERP, help prepare for new releases, understand the application and generally help businesses get greater capability out of it, as they understand what the software can do.
5. Bring your data over, and use the transition to cleanse it
Lingerie Company of Australia migrated batched monthly transaction data for the prior two years, and all customer and product data.
This process took time, Rosenfield explains, because he wanted to do it right. He was careful to clean the data and segment it. He particularly liked NetSuite's customisable fields, referring to them as "very easy-to-use".
He applied between 15 to 20 attributes to each item across 20,000 unique SKUs. For his product range, these attributes were items like the quality of the lace used, the effect of the push in a push-up bra and other elements that allow him to deeply analyse his data and sell-throughs. By spending this time up-front, Rosenfield now has very granular data on all his SKU sales metrics.
Irving says Mons Royale took a different approach. For this implementation, they ran NetSuite and Xero in parallel for a period. Historic data remains in Xero and has also been exported to Excel.
This works for Mons Royale as the Xero information is historic and unchanging, and will only be referenced by financial staff.
However, in my personal view, all operational data is best transitioned to a new system. I have come into company after company that has grown aggressively by acquisition and told staff to all begin using a single app, or where the business has migrated to another product but only brought across current data. In every situation, without exception,
staff have required access to legacy systems for historic data. This includes old customer records for contracts and rates, old payroll data for pay inquiries or workers' compensation issues, and so on.
These situations are fraught with problems. It means your business needs to maintain the legacy apps, including the hosting and licensing. It means your help desk staff need to know how to support that application, including creating new logins and handling reporting requests. It means your operational staff have a break in their train of thought when seeking old data. This is especially troublesome when the company has high attrition rates and old staff leave and new staff who do not know how to use the old systems, or find them, are hired.
Vendors, in my experience, will typically tell you the benefits of starting fresh and just bringing over a single line item balance. I cannot emphasise enough how much thought must go into this. As easy as it can be to implement something with no baggage — for customer and vendor alike — it's you who has to live with the decision. The vendor isn't affected if you can't easily find your old records, but you are, time and time again.
This raises the issue that much of a company's data is actually bad. If your systems permit free-text entry then undoubtedly your staff have entered poor data – there will be comments in mobile phone number fields, there will be mobile numbers in the fax field, there will be suburbs in the state field, there will be "N/A" and every variation you can think of all over the place. Even if the fields are not free text, you will find birthdates that are in the future or are the day of the transaction or other issues.
Transitioning your data is a good opportunity to cleanse and correct these problems – perhaps ideally in the source system, but if need be, after the export from the old system and before the import into the new system. You could do as Rosenfield did and add far greater information into your data than your systems previously permitted.
However you approach it, you need to recognise you will have bad data and factor the time in to fix it. You also need to be wary if your vendor tells you not to migrate your data. Consider your long-term best interest, not theirs.
6. Consider how your new system can improve or unlock your business processes
There's something to be said for making software suit your business. However, there's also a lot to be said for making your business suit the software.
An ERP offers you automated workflows and approval processes, it offers you discipline around purchase orders and receipting, it offers you checks and balances around your general ledger. It can offer you global facilities, a single platform across your whole business, and more.
Look carefully at how you can leverage the software for the best results, without being afraid to change the way your business operates. Ultimately, the more you can automate and the more you can allow people to self-serve, the more time you can spend on actually transacting business instead of dealing with paper-based administration.
Lingerie Company of Australia, a wholly owned subsidiary of the Simone Pérèle Group, has been in operation for 25 years, and is one of the global brand's largest operations outside its headquarters in France. From its warehouse in Victoria, Australia, the company supplies the Simone Pérèle brand to more than 120 wholesale accounts, Smith & Caughey's in Auckland, New Zealand, Ballantynes in Christchurch, New Zealand, and 13 of its own retail stores across Australia. In addition, Lingerie Company of Australia has a brand-exclusive relationship with one of Australia’s largest department stores, David Jones, which has grown from occupying a single rack to now being the only lingerie brand stocked across all 40 David Jones’ ANZ locations.
Founded in New Zealand in 2009 by a professional skier and his wife looking for a more stylish alternative to the traditional technical merino base layers, Mons Royale began shipping international orders during its first year. Today, Mons Royale is available in stores across North America, Europe, Japan, Australia and New Zealand, as well as direct to consumers online. As a result of its global growth, Mons Royale struggled to capture real-time insights in order to make informed business decisions.