MUFI Rating & Risk – NetSuite OneWorld

MUFI Rating & Risk – NetSuite OneWorld

MUFI: Maintainability, Usability, Functionality, Implement ability

Vendor: NetSuite (Select For Vendor Profile)

Introduction

NetSuite OneWorld has over 10,000 customers. NetSuite OneWorld has one of the better user satisfaction levels in the ERP software category.

Application Detail

While often marketed as such and known as such (which is why we have included it in this software category), NetSuite is not an ERP system. Its most accurate designation is a stand-alone financial system, which has very basic inventory management and warehouse management functionality. NetSuite has used the ERP moniker for marketing reasons. NetSuite has recently grown its footprint through acquisition into HR, CRM and eCommerce. But the strength of the application is finance and reporting on finance.

The fact that NetSuite is not a full ERP system can be confusing because NetSuite is one of the major proponents of something called two-tiered ERP. This is where a tier 1 ERP system is used – both at the parent company level as well as a master ERP system (that integrates other ERP systems) and then ERP systems of lower tiers are used for subsidiaries, etc.…

NetSuite has been putting themselves forward as an alternative for the second tier, but they can primarily handle the financial side of the equation, with other companies necessary — such as a Rootstock, to complete the ERP footprint. NetSuite is a SaaS-based solution and is well regarded for its financial functionality. In fact, it is considered the best system for consolidating multiple companies.

Netsuite Browser

NetSuite OneWorld has a browser user interface, with easy an easy to navigate menu bar along the top. Reporting is a strong point of the application.

NetSuite OneWorld can be leveraged for what it is, but it is also a bit difficult to classify. After evaluating NetSuite, we have categorized it as a stand-alone financial application, although it is a bit more than that – but it is nowhere near broad enough in the scope of functionality to be called and ERP system.

NetSuite OneWorld’s strength is its ability to be brought up quickly, and its ease of use. However, in which direction will NetSuite grow? Will it use its newfound market muscle to make more acquisitions? If so will that reduce software quality and delivery as this usually does? NetSuite’s CRM and eCommerce applications are not competitive offerings, so NetSuite’s growth outside of OneWorld has not been encouraging. Typically, we don’t make a big deal about “vision.” We leave that more esoteric analysis to Gartner. However, NetSuite is one of the few vendors whose vision is a concern to us, because we can’t understand NetSuite’s strategy – it seems built on wishful thinking. The following paragraph will explain why.

NetSuite offers its product primarily through SaaS, which is one reason it can be brought up so quickly. However, NetSuite’s pricing has dramatically increased over the past several years, which makes it far more expensive than any of the stand-alone financial systems, even though it is not an ERP system, it is priced as if it is an ERP system which is towards the expensive end of the spectrum. NetSuite is in our view killing its value proposition. NetSuite OneWorld is a basic system; it should not be priced towards the upper end of a software category that it does not even belong in. Considering that one of NetSuite’s main marketing programs is to pitch themselves as a tier 3 ERP solution to complement tier 1 ERP applications like SAP ECC and Oracle JD Edwards Enterprise One, NetSuite’s pricing seems really out of sorts.

NetSuite is considered a go-to application for some types of financial functionalities – in particular, multi entity and multi-currency that is better than any other application. NetSuite strongly markets this functionality as is shown in the following quotation from their website.

NetSuite OneWorld can populate a single charts-of-accounts across subsidiaries, or use separate charts-of-accounts for each company with postings between subsidiaries such as expense allocation managed via inter-company journals. Local taxes are readily handled across subsidiaries with an embedded tax engine that allows for multiple tax schedules for everything from GST, to VAT, to consumption tax or general sales tax. Revenue recognition, local financial reporting and compliance are also built-in components. – NetSuite

For some of these functionalities, there are not good alternatives. However to engage those functionalities is quite expensive. Outside of these specialized functionalities, we do not consider NetSuite a compelling value.

MUFI Scores

All scores out of a possible 10.

Vendor and Application Risk

Software Decisions Risk Defined: (See This Link for Our Categorization of Risk)

NetSuite OneWorld is an application with reasonable implementation risk. OneWorld has a high implement ability and a decent functionality level. Some of the things that OneWorld can do on the financial side can exceed expectations.

Likelihood of Implementation Success

This accounts for both the application and vendor-specific risk. In our formula, the total implementation risk is application + vendor + buyer risk. The buyer specific risk could increase or decrease this overall likelihood and adjust the values that you see below.

Risk Definition

See this link for more on our categorizations of risk. We also offer a Buyer Specific Risk Estimation as a service for those that want a comprehensive analysis.

Risk Management Approach

Problems can arise when OneWorld is implemented as if it is a true ERP system, instead of considering it a best of breed financial system with a few other areas of functionality – therefore the largest challenge we see regarding managing the risks of a OneWorld implementation is the scope of the implementation.

Finished With Your Analysis?

To go back to the Software Selection Package page for the Finance & Accounting software category. Or go to this link to see other analytical products for NetSuite OneWorld.

References

http://www.investopedia.com/terms/c/conglomerate.asp

http://www.netsuite.com/portal/products/oneworld/global-erp.shtml