Case Study: How Flawless Inbound’s Principal NetSuite Solutions Architect Achieved Success During a Merger and Acquisition Process
Flawless Inbound is now proud to have in-house Oracle NetSuite expertise. We’re happy to introduce our Principal NetSuite Solutions Architect by sharing his experience so that you can get an inside scoop on how NetSuite can transform your day-to-day business operations.
To begin, let’s set the context. A large Wholesale and Distribution company with $2B in annual revenue realized that a core part of their strategic growth would be achieved through Mergers and Acquisitions. They were looking to grow by buying smaller shops and wanted to ensure that those small operations would integrate seamlessly with their current Enterprise Resource Planning system.
Owning 400+ locations, they had an established merging procedure in place. However, with one specific shop, they faced the following challenges:
- The small Shop (with $3M annual revenue) worked on a pen and paper system, following a traditional model of business operation.
- This Shop needed a particular financial setup that was different from any other acquisition: the goal was to maintain a separate entity and brand, yet still work with the same list of clients as the parent organization.
- The NetSuite team needed to ensure seamless integration of the Shop to the Parent company and a flawless go-live with minimal risk of disruptions.
- Dealing with the change and acquiring new skills was demanding for the Shop team because of their age group (55-80), and the transition required special attention to their needs.
Apart from these overarching challenges, the project presented seven problems that needed reliable solutions quickly.
1. The Inventory System
From the digital perspective, the shop had no inventory at all. When starting the business more than 30 years ago, the owners didn’t have technology tools to choose from, so they had to rely on their memory capacity and paper notes to store all product data. At the time of the merger, it was still a family business with ten team members in total. With the warehouse being 20 000 square feet big, the chances of losing track of something were extremely high, and the Parent Company wanted to avoid that risk as best as possible.
The solution offered by our NetSuite Principal Architect included two steps. First, he suggested doing an inventory count to check accurate quantities in stock – 15000 SKUs were counted. Secondly, for a smooth merging process, he had to cross-reference the inventory with that of the Parent company (that had more than 500 000 SKUs) to make sure that the system would consolidate all necessary information after the merger was over, and no duplicate data issues would arise.
2. Bar Coding and Bin Management
All major shop processes like receiving, packing, and shipping, were entirely manual. One step of building the new digital inventory from scratch was introducing a barcoding system and labelling each warehouse item. To keep everything in order, our Principal Architect utilized NetSuite native Bin Management features and processes.
Note: The requirements for this project didn’t include implementing Total Warehouse Logistics (TWL), but it can be easily integrated with NetSuite.
3. Mapping business processes
In a small, family-run business, the only way to keep the mill running is for each team member to wear different hats. This unclear task distribution caused a lot of confusion inside the team, let alone anyone from the outside. Our NetSuite Solutions Architect decided to interview each team member to figure out their job responsibilities and then configure a map of all business processes to offer the most functional NetSuite solutions. This map included:
- Procure to Pay
- Order to Cash
- Return to Credit
- Return to Debit
- Inventory Management (Creating item records, serialization, bin location management)
- Lead to Quote Process
That way, he ensured that the Shop business structure would match with the technology tools used by the Parent company.
4. Integration with existing locations
The Parent company owned 400+ locations, each operating as a separate entity, following the decentralized business model. They aimed at keeping the shop as a partially independent business with its own Profit and Loss statement. The shop kept its original name but needed to integrate with the central Parent system for tracking and reporting purposes, which is not possible with several different ERP software systems. Our Principal NetSuite Architect’s solution was to create a different subsidiary for the Shop to build the required segmentation and maintain the desired reporting structure. He was aware that Oracle NetSuite had the necessary features to accommodate the client’s needs and knew how to apply them.
5. Master Data Management
Since the companies were operating in the same industry, their vendor and customer data was overlapping, just like the SKUs. The first thing that needed to be done was sorting the client data into B2B and B2C because the Shop was selling to both businesses and households. Then, things grew complicated: the Parent company needed to keep transactional data for each Shop hidden from each other internally but unified on the outside so that customers could receive consolidated billing. What made implementation complex was that all the transactional data had to go directly to the Parent company’s financial department, and our NetSuite Solutions Architect was able to meet these requirements.
6. Building Customer Pricing Model
The shop adhered to contract pricing for its clients. Since it didn’t fit the Parent company’s structure, our Principal Architect had to design a system of pricing levels and price breaks. For example, he introduced three levels of pricing tiers: A, B, and C. For an A-level customer, a product cost 150$, for a B-level customer – 175$, and for a C-level – 200$. The level assigned to a client depended on the sales volume, how well they paid bills, and future selling opportunities estimated by the team.
When a new client entered the database, price breaks were to define the level. For example, if a client made a first-time purchase for 200 units and over, they immediately got to level A pricing; for a 150 units purchase, they went to level B, and for 100 units to level C. NetSuite allows to build various matrices for customer pricing, or vendor preferences (e.g., if there is an issue with a vendor, you can make a note and the system will remind you next time you’re ordering).
7. Change management
As stated in the beginning, the shop team was not ready for such rapid changes due to several reasons. To make the transition process smoother for them and provide the necessary support, more training resources were allocated. Firstly, trainer to trainee ratio was doubled to make sure that each team member had an opportunity to learn at their own pace and ask questions. Secondly, the training period and post-conversion support were extended, and lastly, more training materials were developed to ensure that the team had enough time and assistance to hit the ground running.
For our NetSuite Solutions Architect, the most memorable part about rolling out this implementation project was training the Shop owner, who was 80 at the time of merging and transitioning. She was the role model for her team and was the first to employ the digital tools to the fullest.
How to Go Live Flawlessly
For any digital transformation project, the moment of truth is the day when you go live. After resolving all the challenges our Principal Solutions Architect faced – building the inventory from scratch, introducing barcoding and bin management, data cleansing, mapping out main business processes, developing pricing models, and managing the change – he came up with a “Flawless Go-Live Day Checklist”. Here are five things to remember for an only-good-surprises, smooth, and flawless go live:
- Create User Acceptance Testing documents beforehand.
- Set proper expectations with key stakeholders.
- Clean data before migration (for example, if you’re moving from QuickBooks to NetSuite) to avoid junk data issues.
- Be ready for surprises. To reduce their number, prepare your clients and vendors in advance by reminding them that things are going to change and test invoice systems.
- Rely on post-conversion support. Although you put in a great deal of effort to master the new system, new questions and doubts will come. Feel free to refer to the support team for assistance.
As you can see, each NetSuite implementation is different, and it heavily depends on the starting point. Flawless Inbound Team is now fully equipped to provide you with the solution tailored for your case. We ask the right questions to build a strategy that will deliver growth-driven results and then, step by step, guide you through the full implementation process. Talk to us today to learn more.