Over 50% of IT decision-makers view ERP systems as the top priority for businesses. But this priority goes far beyond just deciding which ERP software to use. Business decision-makers must also include considerations such as the budget, timeline, and training. The deeper you look at the decision to shift to a NetSuite-based ERP ecosystem or make improvements to your existing system, the more questions may arise.
Do you need custom development to bring everything into alignment? How will you manage both daily operations and big transformational projects in the future? Do you want to keep NetSuite management entirely in-house, or are third-party services the smarter bet? How much does either option cost, anyway, and how can you make sure your NetSuite is performing as optimally as possible?
Management is an ongoing cost in your total ERP project, but it’s an essential one. Your organization will need daily administrative tasks completed, an ongoing degree of troubleshooting, and even advanced customization projects in the future.
The plan you devise for NetSuite management will set the stage for how efficient and effective your system is. Keep reading for a brief overview of some of the most common NetSuite management approaches and the different factors you should consider when zeroing in on the right option. Then we’ll give you a simple three-step strategy for implementing your new NetSuite management plan.
4 Different Approaches to Managing Your NetSuite ERP
While every organization with NetSuite needs management staffing and resources, the exact plan will differ between organizations based on your budget, system requirements, and degree of in-house familiarity with NetSuite. Consider these four common approaches to NetSuite management:
Approach #1: Hiring an In-House NetSuite Administrator
Having a single in-house NetSuite administrator who is a full-time employee is a common option, especially for relatively small organizations. You can vet and hire a salaried professional, and they can take on both the day-to-day operational concerns and the customization tasks that will pop up over time. However, there are some significant challenges to this approach:
- There may not be enough work to warrant having a full-time on-staff administrator.
- Alternatively, there may be far too much work for a single employee, which will make projects pile up behind the scenes.
- Your in-house professional will have a limited array of expert skill sets and capabilities.
- Hiring an employee comes at a high price when you consider salary, benefits, additional administrative tasks in your office, and turnover costs.
Approach #2: Hiring a Full Team to Manage Your NetSuite Ecosystem
If you have a large organization, you may be considering hiring an entire NetSuite team. Provided there’s a large enough workload to warrant it, this approach offers some benefits. All of the work can be done in-house, you’ll have multiple employees with different specializations, and you can do custom development without hiring additional personnel.
However, there are some drawbacks. From the start, this approach will cost a lot of money—even reaching into the millions if you have a team of several experienced developers. You may also have either an overabundance or deficiency of availability during lag times or incredibly busy months.
Approach #3: Outsourcing Management of Your ERP
Instead of hiring internal employees, you can hire a qualified third-party service that manages the entirety of your ERP. Depending on the organization you select, you may receive services such as day-to-day administration, tech integrations, proactive maintenance services, and full custom development. When you outsource professional services, you can access variable degrees of service based on what you need from month to month.
You can also have the right-fit experts from the third-party service work on your projects. For example, you may have one contractor available for custom development of your warehousing and fulfillment systems, another contractor for advanced financial report generation, and a different expert altogether for administrative tasks, even if you only need a few hours of work in each area. This access to specialization without paying full salaries is critical.
Of course, there are some challenges in this approach, as well. It may take some searching until you find a NetSuite company that offers all the specialized services you need. You may also have poor experiences with some companies, which may require more custom fixes down the line or a complete repair and recovery project.
Approach #4: An In-House Administration That Uses Third-Party Services as a Standard Practice
Many organizations see a lot of value in all of these approaches, so they create a combination of the different styles. SMBs and quickly growing organizations that aren’t large enough for an in-house department of developers can have a single on-staff administrator who manages many tasks themselves but coordinates with a third-party service as needed for custom projects or big tasks with strict deadlines. This dual approach ensures there’s always someone in the company involved in the fundamental structure of the ERP, but your organization stays versatile and lean.
5 Things to Consider While Selecting Your Company’s NetSuite Management Style
Different decision-makers will use different pros and cons with each of the approaches above. The CFO may strongly prefer the outsourcing or combination approach because of the cost-effectiveness and scalability. But your CIO may have security concerns about outsourcing development, especially if they’ve been burned before.
There are ways to address all of the concerns your C-suite team may have about both hiring full-time staff and outsourcing the work, but before you do that, it’s important to look at the factors that drive most companies’ decisions. Those five factors will be:
The Size of Your Business
How many employees you have and how much revenue your company brings in every year is a key part of the framework whenever a company is deciding when, who, and how many people to hire. If you have a very small organization of 15 or fewer people, it may not make sense to have a full-time NetSuite coordinator or administrator on staff. There simply may not be enough work to do, and you may not have the salary or benefits package to attract a NetSuite developer who can wear multiple hats.
As your organization becomes larger, you may have more IT professionals on staff. But even these professionals will be managing and troubleshooting all of the systems your company relies on, not just NetSuite. Once your company crosses a certain threshold of employees and revenue, only then would it make financial sense to have an in-house NetSuite administrator. Then you can start considering having them operate as a dedicated point of contact between your organization and a NetSuite management service.
Your Available Budget
Your company size and revenue will have a direct impact on your available budget for NetSuite management, but it’s still a separate factor to consider. Depending on your total NetSuite package, you may be paying something close to $5,000 a month for the core system and an additional $150-$200 per user. From there, you can allocate the remainder of your technology and operations budget to see how much money is left for NetSuite management.
As a general rule, growing companies need to prioritize predictable and consistent costs more than almost anything else. If you don’t have plenty of budget to afford turbulent salary, training, and turnover costs to accommodate an in-house team, shop around to learn more about the costs of outsourcing. Whenever possible, ask for price sheets that lay out standard and expedited rates for administrative services, monitoring and troubleshooting, custom development, and other key aspects of management.
Your Team’s Experience With NetSuite
Some companies can get by with a bit of a disorganized approach, especially if they have a NetSuite expert on staff and everyone has experience working with NetSuite. This in-house knowledge is an invaluable resource, as your team can then help you forecast budgets, anticipate likely development projects, and understand the costs and benefits of outsourcing more clearly.
On the other hand, if you know your team is unfamiliar with NetSuite, has only ever worked with QuickBooks-style operations, or is familiar with NetSuite but only as a finished project, it’s important to hire outside consultants immediately. A reputable NetSuite-certified team can create a robust implementation project plan, guide you through different integration, module, and custom coding options, and help you understand all the requirements for NetSuite management.
Your Business Plan and Forecast for the Next Year
Before you make final decisions about hiring professionals, or even a single in-house NetSuite employee, you need to have a clear idea of your business plan and financial forecasts for the year ahead. One of the key strengths of outsourcing your NetSuite management is that the costs are much easier to control and predict. For example, you can:
- Get an overview of the costs and timeline for implementation
- Hire additional support on an hourly or project basis as needed
- Not worry about how turnover or poor employee performance might affect your operations
The Status of Your Current NetSuite Ecosystem
It’s just as important to know the details of your NetSuite ecosystem’s current status quo. Did implementation go smoothly, or do you know there are invisible problems—or has implementation not yet started? Have you managed your NetSuite in-house for a while, but your IT employee is getting overwhelmed?
Consider the current state and challenges your organization is experiencing with your system. This information can help you find the right-fit NetSuite management service with the areas of focus that matter.
How to Make Your Decision
Once you’ve considered those five factors, you may already know what decision makes the most sense for your organization. However, going from the realization that you want to start recruiting employees or start shopping around for a NetSuite management service to actually doing so is a tricky process. Get the ball rolling with these three quick steps:
1. Speak with the Stakeholders: Your IT Team and C-Suite
Unless you have sole authority over the problem, the next step is a series of conversations. Ask your IT team and the people who do (or will) interact with NetSuite most what challenges they foresee and what solutions make the most sense to them. Then bring their answers and your recommendations to the executive team. Ultimately, you’ll need their buy-in to move forward.
2. Assess the Scope of NetSuite Development and Management Services You Anticipate Needing
If you’re learning the direction of outsourcing NetSuite management, write out what that looks like. Include the services you need, how much you need them, and what supplemental services you need. Conversely, to hire an in-house employee, start writing out what their job role and responsibilities will need to be.
3. Search for High-Quality Third-Party NetSuite Management Services
This step applies solely to outsourcing. Now is the time to start looking more critically at different services. Look for companies that meet at least these criteria:
- NetSuite certification and a clear record of experience
- Years of experience in your industry or niche
- Multiple different service verticals, including administration, custom development, implementation management, etc.
Outsource Your NetSuite Management to Meet Your Changing Needs
NetSuite management is an essential component of having an ERP that your company can rely on. Outsourcing NetSuite management is the most efficient and reliable solution for many organizations, especially if your business is constantly transforming or growing. At Limebox, we provide versatile, customizable NetSuite management services, ranging from day-to-day management to full-scale implementation. Reach out today to see how the numbers for outsourcing NetSuite management fit into your financial forecasts and IT processes.