Last year, we had the opportunity to work with the CEO of a growing distribution company as they evaluated multiple ERP systems. Let’s look at the top issues they needed to work through to select NetSuite as their cloud based ERP solution. Since we pride ourselves on maintaining the privacy of both clients and prospects, I’ll refer to the CEO as “Jill” and the company as “Daytona Auto Parts” to tell you Jill’s story.
Daytona Auto Parts (DAP for short) is an auto parts distribution company that sells directly to customers through their on-line channel and through Amazon. They also sell directly to service stations through a direct sales channel. They buy inventory from multiple manufacturers. Jill views the company as a sales, marketing and logistics company.
First, DAP has been and still is a successful company. They’ve grown at a steady 15% plus rate for the past five years and on the surface, things seem to be going well for the company. But Jill went to bed each night feeling like a proverbial duck. Calm on the surface but paddling like mad just below the water to keep things going. Put on top of that the pressure from customers, investors, and bankers to do more with less and she was concerned how she would survive the year, never mind where the company would be in five or ten years down the road.
When she came to us she seemed to understand that a cloud based ERP system could really help her company to do more with less, to scale easily and to make the process of telling her financial story simpler every month (and quarter, and year). But while she knew marketing and distribution and her controller knew accounting and finance, together they knew that evaluating and implementing a new system was just fraught with danger. All the ERP salespeople told them it would be simple, told them their system could do everything they needed, but they knew it wasn’t that simple.
There’s a reason Jill is the CEO of a successful and growing company. She’s smart and was looking for both a system and a partner to make that system work for DAP.
As you’ve probably guessed by now, they chose NetSuite for their ERP system and Horizon Associates as their consultant. Let’s look at what they evaluated, why they made the choice they made, and what it means for Jill and DAP today.
To start, DAP utilized a mix of systems to get them to where they are today, but those systems were now holding them back as they looked to grow. They were using:
- HubSpot for marketing automation and CRM
- A 3 rd party program for order management
- QuickBooks for finance and general ledger activities
- A series of electronic data exchanges (EDI) to move data for reports to excel spreadsheets for management reporting purposes
Jill recognized that multiple data entry for most activities was required and often led to mistakes or inaccuracies that needed manual processing to clean up. To grow more, she needed to hire more people to handle the multiple systems and recognized that that was inefficient, if not downright silly.
Her charge was simple, do things better.
What is better?
Faster? Cheaper? Less errors? Simpler? All the above?
We think it is “all of the above”. For a company like DAP, an ERP system should bring together:
- E-commerce Ordering
- Sales Process
- 3 rd Party Logistics
- Demand Forecasting
- Financial statement production
- Financial analytics
- Subsidiary roll-ups
Leverage growth opportunities don’t hamper growth
For DAP, the prism for evaluating ERP systems was how does it help us grow. The best part of a cloud based ERP system is growth is seamless. Open operations in a new market, add a new product line globally, acquire a new brand. From the systems standpoint, it is just a matter of adding new users and updating databases.
Jill put together a multi-disciplinary team that included sales, marketing, purchasing, accounting, and logistics to evaluate ERP systems. After comparing benefits and features, they quickly concluded that NetSuite was the right solution for their business. It seamlessly handled all the transactions and data flow, was a true cloud based system, and made the data easy to access for both business analytics and for financial reporting.
Deciding to work with Horizon was the second step in the process and here Jill took the lead in making the decision. She knew the success or failure of implementing NetSuite would determine her fate at DAP. A successful implementation and she would be able to accelerate growth. A poor implementation and she would be out looking for work. Why did she choose Horizon? We’ll never know for sure, but they seemed to appreciate the fact that the project team was led by a former CFO and that the consultants were all senior with experience on the client side managing implementations. The other consultants, while technically strong, seemed to be a bunch of smart MBAs who had not actually walked in her shoes.
Where is Jill today?
It’s August and we hear she is on a beach for the entire month. How cool is that! She has access to all the company data at her fingertips when she needs to check on what’s happening back home.