The Great Debate: One Integrated
Business System VS. Siloed Applications
White Paper
R0213© NetSuite 2013. www.NetSuite.com
Table of Contents
How to Avoid the Pitfalls that Restrict Business Growth . . . . . . . . . . . . . . . . . . . . . 3
Inefficiencies of a Standalone System Architecture . . . . . . . . . . . . . . . . . . . . . . . . . 4
Comparing the Suite to a Standalone System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Process Efficiency Across Your Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Real-Time Visibility and a Unified Customer View . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Significant IT Time and Cost Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Accelerated Growth and Expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
To find out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.
© NetSuite 2013. www.NetSuite.com The Great Debate: One Integrated Business System VS . Siloed Applications 3 | 8
White Paper
To find out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.
How to Avoid the Pitfalls that
Restrict Business Growth
As fast-growing companies achieve greater market penetration, gain more
customers and their organization grows, they often run in to a wall where
internal processes struggle to keep up with continued demand.
The key challenge to supporting that growth is laying the groundwork to
scale the business effectively and efficiently while maintaining customer
service and support.
When starting out, most companies solve problems in the quickest, cheapest
ways possible, which over time, leads them toward one of the biggest pitfalls
for growing organizations—using standalone business applications for
varying departmental functions in an ad hoc manner. As the business and
its complexity grow, these disparate systems create operational inefficiencies
that can be detrimental to the bottom line, damage the customer experience,
and impede the company’s ability to reach its full potential.
This white paper covers the types of inefficiencies caused by running
disparate business solutions and systems for different departments and how
a software platform that unifies critical business processes helps companies
grow more rapidly and profitably.
This paper reviews numerous case studies of companies that switched from
disparate software systems to an integrated software suite and also covers
analysis by independent industry expert, Nucleus Research, of customers’
ROI from using an integrated software suite.
© NetSuite 2013. www.NetSuite.com The Great Debate: One Integrated Business System VS . Siloed Applications 4 | 8
White Paper
To find out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.
Inefficiencies of a Standalone System Architecture
Businesses that select their systems over time can find themselves with a poorly planned architecture
that handles short-term tactical needs sub-optimally while holding the company back from scaling
efficiently over the long term. These inefficiencies can become so severe that they cripple growth.
There are four primary issues that hinder growth when running a business with siloed systems:
Wasted Employee Productivity: If your employees are bogged down with inefficient and disjointed
processes, it increases errors and takes time away from their more important core duties. Important
processes such as order processing, invoicing, expense approvals and fulfillment, can take a lot longer
to get completed if too much manual effort is required and are often erroneous. For instance, your
employees may be spending hours re-entering order information into the accounting and invoicing
system, while other employees pull that same information from your CRM system for their order
fulfillment processes and to calculate sales commissions. If any orders are canceled in the meantime,
your employees have to sift through mounds of data to reconcile this information again. Such labor-
intensive and manual tasks steal away time that could be otherwise spent on helping the company
grow and innovate.
Lack of Real-time Visibility: When software systems are unintegrated, you have multiple
overlapping databases and cannot easily get a view of business performance in a timely fashion.
Reports showing performance across your finance, sales, marketing, service and fulfillment
departments are crucial to giving you an integrated view of your company’s operations. Most
companies simply give up on acquiring this information on a regular basis because of the amount of
time it takes to source, extract and analyze this data. For those that do, countless hours are wasted
trying to tie unrelated, error-prone and out-of-date information together. Consequently, businesses
end up making critical decisions slowly based on inaccurate information, or they make hasty and risky
decisions off of gut instinct.
Integration Complexity and Cost: With so many siloed applications, IT wastes an enormous
amount of time and money on integrating, maintaining, upgrading, and acquiring new versions of
these applications. Once new versions are purchased, even more integration and maintenance needs
to be performed for all the different versions of software to work together. Consequently, valuable
IT time that could be used to make the business more productive is wasted, while maintenance costs
skyrocket. With this in mind, its not a surprise that the leading analyst firm, Gartner, reports that
91% of IT staff time is spent on software maintenance rather than on innovation.
Increased Customer Churn: Customer acquisition and revenue growth are key pillars to your company’s
continued success. With fierce competition, it is essential that your company provide an exceptional
customer experience or risk having customers take their business elsewhere. When customers are
unable to quickly get order status information, can’t get issues resolved easily, have poor product
fulfillment experiences, customer satisfaction is damaged, the likelihood of re-purchase decreased,
and the risk of negative word-of-mouth increased. An integrated software system ensures that
customers have the right information and customer experience they demand, by providing customers’
with a real-time self-service portal, and by giving all your customer-facing employees instantaneous
access to all the customer interaction and transaction information they need to service and sell.
Potato chip maker and distributor
Viva La Papa found itself in a
predicament when it wanted
to give managers and staff in
the UK and Peru easy access to
real-time business information.
After deploying NetSuite, Viva La
Papa has a seamless connection
with all business stakeholders,
can instantly support new agents
and partners anywhere in the
world, and is on pace to double
growth from ÂŁ1m to ÂŁ2m in its
first two years of operation.
Sign supplier, Advantage Sign
Supply, was having trouble
keeping up with order volumes
and managing inventory and
wanted to improve profitability
while growing their customer
base. After deploying NetSuite,
a completely integrated cloud
business system, they were able
to cut order processing time by
66%, decrease inventory on hand
by $500,000, automate electronic
invoicing saving $1,000 a month,
and launch an ecommerce sales
channel that now accounts for
11% of revenue.
© NetSuite 2013. www.NetSuite.com The Great Debate: One Integrated Business System VS . Siloed Applications 5 | 8
White Paper
To find out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.
Comparing the Suite to a Standalone System
When companies first start growing, they have several options to implement the front- and back-
office systems needed. From accounting to CRM to order management and beyond, applications can
be implemented in a piecemeal, staged process, or in a process that takes into account how these
various systems will interact with each other and what level of integration they require.
As company and revenue growth accelerates, it becomes increasingly more essential to integrate
their business software applications and standardize across a single database and business process.
The advantages of designing software systems in this manner as opposed to a siloed fashion include
tremendously improved business productivity, improved visibility across the organization, and IT cost
savings. Let us examine some of the key areas in which fast-growing companies can benefit from
implementing a software suite.
Process Efficiency Across Your Organization
The key to avoiding manual, duplicative work is to ensure that your core business processes are
seamlessly integrated from the front office to the back office. Automating such processes enables
you to minimize employee time spent on activities that would otherwise be required to manage these
processes, and redeploy staff to higher-value activities to help your business innovate and grow.
Quantifiable benefits can be realized in critical processes such as quote-to-cash, procure-to-pay,
accounts payable, and payroll, expense and incentive management.
Quote-to-Cash: When a company converts a prospect into an order and converts them in to a customer,
they often do so by re-entering the same customer data from the CRM system into the order management
system and then in to accounting packages, which operate in multiple distinct silos. Without front-to-back-
office integration, valuable time is wasted with manual data entry processes, paper-based processes, and
back and forth communications regarding order status and monthly revenue recognition and the customer
experience suffers because of these delays. Once an order has been placed into the order management
system, companies need to ensure that customers provide payment in time and that the time taken to
fulfill an order doesn’t get to a point where it results in order cancellations or customer dissatisfaction.
Procure-to-Pay: To fuel growth, businesses may need to purchase equipment or raw materials.
The procure-to-pay process that starts with acquiring the raw materials and culminates with
paying the various stakeholders is a complicated one that involves several touch points within your
purchasing, receiving and accounts payables functions. Each of these functions deal with siloed
software that needs to work together to enable the purchasing of equipment or raw materials,
and then eventually pay the vendors providing these deliverables.
An integrated suite ensures that the procure-to-pay process is streamlined. It monitors and automates
the entire process and eliminates manual errors by your employees. When your employees can
track the status of purchase requisitions and orders through self-service functionality that eliminates
paper-based forms and their associated errors, it frees up your staff for higher-value activities while
simultaneously trimming the bottom line.
A further benefit of a suite enabling automation is ensuring that purchase orders are automatically
generated once reorder points have been reached for certain goods or raw materials. This means
that instead of having to pull staff off projects to look up previously completed purchase orders and
order quantities, and to generate a new purchase order, these purchase orders can automatically
be generated. An independent analysis by industry experts, Nucleus Research, of customers using
NetSuite found that they reported inventory carrying cost reductions of an average of 20%.
Customers of Australian wine
retailer, WineMarket, used to wait
an average of 45 seconds before
getting their call answered with
many calls requiring a call back.
With NetSuite, they were able to
reduce wait times to 11 seconds,
achieve a 95% first-call resolution
rate and improve overall customer
satisfaction results.
Before we had to physically
bring a hard copy of a new order
to production and channel to each
department. Now new orders are
entered and we all have instant
visibility. NetSuite provides the
critical tool to see our current sales
demand, direct the orders through
our seven-step assembly process,
and ensure that they go out the
door on time to give our customers
the best delivery performance
possible meeting our quality and
performance objectives.
—Monobind
Monobind, a medical device
manufacturer, was able to cut its
order fulfillment times by 50%
after deploying NetSuite, and its
production planning time from
days to hours.
© NetSuite 2013. www.NetSuite.com The Great Debate: One Integrated Business System VS . Siloed Applications 6 | 8
White Paper
To find out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.
Accounts Payable: Once purchase orders have been generated, vendors that provide goods or
services to the company need to get paid. The finance staff will then need to confirm with the
receivables department whether the services or goods were delivered as promised and only then
authorize accounts payable to release payment to the vendor. All these activities consume valuable
cycles that employees could instead spend on the core business. Integrating receivables with accounts
payables ensures that payment can be promptly delivered to vendors.
Payroll, Expense and Incentive Management: As a company grows, so does its number of
employees. Operating siloed software systems for payroll, expense management and incentive
compensation management can result in a spreadsheet nightmare. Calculating parameters such as
salary, withholdings, deductions, and sick and vacation day accruals can consume several hours each
week and consist of manual, error-prone processes executed primarily on these spreadsheets or
duplicated across these software silos.
A closely related aspect of payroll is incentive compensation for your sales force. Your sales
operations personnel have to spend countless hours on sales incentive plan construction as well as
research and resolve sales disputes on how much commission is due. A software suite that includes
incentive compensation allows sales operations and finance employees to save time by automatically
calculating commissions based on sales order’s processed, taking in to account sophisticated sales
commission rules based on quotas, sales, quantity and profitability. It integrates the incentive
compensation system with your payroll and accounting systems to streamline payment processing.
When it comes to expense management, a suite allows self-service features to be embedded so
that employees can enter expense reports and have them routed automatically to the appropriate
managers, with all approvals being instantly captured in payroll and accounting.
Real-Time Visibility and a Unified Customer View
Getting an accurate view of your company’s operations can be a challenge if you have multiple
disconnected business systems. Data is frequently fragmented and scattered across these systems,
and spreadsheets are often out of date, error-prone and hard to maintain. Efforts to tie together
multiple sources of data together can be time-consuming and incomplete. Traditional add-on
analytics tools for these siloed applications are expensive to purchase and implement, and often lack
the ease of use necessary to make them pervasive.
Financial reporting or revenue recognition can drag on for weeks as employees have to extract and
sift through data from multiple divisions, geographies, subsidiaries and business units, each with its
own set of order management, revenue and accounting packages.
So how does a software suite provide you with the key business intelligence components that you
need in order to have a holistic as well as detailed view of your business operations? Because all
critical functions and processes are in one central database, it can instantly deliver personalized
insights of the company’s performance tailored to each user’s need—be it CFO, controller, CEO,
sales manager, marketing manager or inventory manager. Because all reports and dashboards extract
data from a single, centralized data repository, the multiple versions of the truth that your employees
currently obtain from disparate spreadsheets are eliminated.
NetSuite’s payroll makes it
easy. Other companies will try and
sell you something that doesn’t
connect with your system and
requires separate servers, but with
NetSuite, accounting and CRM are
tied together. Competitors can’t
do that. Now I don’t worry about
IT, software or updates and to me,
that’s priceless!
—I.D. Me Promotions
I can be in a café in Italy and
use my iPhone to see how sales are
going, what shipments are on the
water, which POs have been paid—
and then I can go back to the trade
show and talk about new composites
for bicycle frames. NetSuite is easy
to use, but it also can take us to
a $100 million company without
missing a beat.
—Niner Bikes
Mindwave Research, a
professional services company,
deployed NetSuite and reduced
their time to perform cash
flow analysis by 18 hours per
week, and the time for monthly
financial closings by eight hours
per month. They also gained the
ability to forecast cash flow up
to six months in advance and
saved $50,000 yearly over extra
staffing that would be required
without NetSuite.
© NetSuite 2013. www.NetSuite.com The Great Debate: One Integrated Business System VS . Siloed Applications 7 | 8
White Paper
To find out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.
Continued business growth often requires that companies maintain and enhance customer
relationships. This is particularly challenging as a company employs more and more people, often in
different departments, geographies, and divisions using different processes and systems. By arming
your sales, service, operations, and other customer-facing staff with real-time access to all critical
customer information, the team can more quickly and accurately handle the customer’s requests.
This complete view of each customer’s interaction and transaction history is also powerful for
maximizing upsell, cross-sell and renewal revenue and can be used to identify customer trends
and patterns for strategic planning and marketing efforts.
Significant IT Time and Cost Savings
Companies with disparate software systems have to contend with several types of applications
ranging from accounting to financial planning, order management, CRM, ecommerce, and business
intelligence tools. Multiple applications consume valuable IT time spent planning, deploying,
managing, integrating, maintaining, and upgrading various systems. Capital-intensive hardware
infrastructure and software licenses, combined with expensive, time-consuming upgrades, drive up
your expenses and can get out of control the faster you grow. Nucleus Research found software
companies moving from on-premise applications to NetSuite eliminated an average of $23,000 in
software license maintenance costs per year. IT staff savings for those companies ranged from
50% to 65% of total IT time.
In fact, as business systems age, functionality starts falling short of organizational needs, but the
disruption and expense of upgrading them to the latest version makes it unfeasible to do so. This is
precisely the situation that synthetic motor oils producer, Schaeffer Manufacturing, found itself in.
The company’s growth to $100 million in sales outpaced its 25-year-old fragmented AS/400-based
proprietary system. Its larger customers were demanding automated order and payment methods,
and Schaeffer was faced with buying an expensive ERP system or a collection of applications they
would have to integrate. By choosing NetSuite’s unified business management system, Schaeffer
saved $100,000 annually in programming costs alone.
In a software suite, IT no longer has to procure, install and maintain multiple systems and the various
integrations between them. Operational costs can be significantly reduced while IT time can instead
be spent on growing the business and improving the company’s business operations.
Accelerated Growth and Expansion
Expansion to new geographies, markets, product lines, and additional sales channels can be
accomplished faster with an integrated system because of unified order and accounting management
processes and data. Toy retailer, Outback Toys, deployed NetSuite and experienced a 33% growth in
orders while simultaneously saving $25,000 per year on webstore management staff, and without
having to increase warehouse staff.
With NetSuite, all of our data
is 100% accurate, presented in real
time and available at the click of a
button. It’s made a huge difference
to the way we work.
—Arboricultural Association
NetSuite gives us a single view
of the customer, rather than having
customer data all over the place.
We have strengthened customer
support and customer relations, and
we’ve been able to speed up order
processing while improving system
availability at the same time.
—Lightspeed Technologies
We were becoming a big
company, but we couldn’t afford
a big, integrated ERP system. With
NetSuite, our competitive advantage
is strengthened.
—Schaeffer Manufacturing
With NetSuite, we’re running
a lot more proficiently. We can
see our inventory, see what’s
selling and what’s not, and we can
communicate much better with
customers. Growth isn’t a problem
now—it’s an opportunity and we
can make the most of it.
—Outback Toys
© NetSuite 2013. www.NetSuite.com
To find out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.
White Paper
The Great Debate: One Integrated Business System VS . Siloed Applications 8 | 8
Conclusion
Today, companies in virtually every industry are using sophisticated business software to manage
operations but many are still struggling to keep up with their growth and manage costs effectively
because a hodgepodge of siloed software applications is causing process bottlenecks and employee
productivity issues. Integrated cloud business management software suites such as NetSuite are
transforming how companies run, and enabling them to transcend growing pains that previously
were holding them back from taking their business to the next level of profitable growth.
The Great Debate: One Integrated Business System VS. Siloed Applications
This white paper covers the types of inefficiencies caused by running disparate business solutions and systems for different departments and how a software platform that unifies critical business processes helps companies grow more rapidly and profitably.