Does omnichannel really work for SMBs?

NetSuite wants to shake up retail with its omnichannel solutions but what works in theory doesn't always work out in real life.

NetSuite wants to shake up the industry with its “omnichannel” solutions, claiming it’s a burden for businesses to be using multiple programs that are costly and fail to communicate with each other.

In fact at its SuiteWorld conference held in San Jose this month, the enterprise software company went so far as to say that any company that still chooses to go down the multiple software solutions route is pretty much doomed to fail.

But how realistic is an omni-channel solution (whether from NetSuite or any other company) for small-to-medium businesses (SMBs).

The SMB-enterprise gap

Industry analyst and commentator Ben Kepes told Business Spectator that he had first hand experience with NetSuite's partner ecosystem in ANZ. Alongside his technology work, Kepes is a major shareholder in a small boutique manufacturing business which designs and makes backpacks and heavy-duty work-wear. According to Kepes, NetSuite is trying to be “everything to all people” but in reality there's a “huge gap” between small business and enterprise."

“NetSuite is used to selling big boxy solutions, but there isn’t really an understanding of the realities of running a small business, how much money there is to spend,” Kepes said.

While SMBs deal with the same level of complexity as a big enterprise, they have to do it on shoestring budgets. To make things worse there’s also a lack of clarity from channel partners about what’s available to the Australian and New Zealand market.

Kepes approached a channel partner about implementing NetSuite and was told that its point of sales system - Retail Anywhere - wasn’t even available in the ANZ region.

In truth, the product had been available in the region since at least 2012. Netsuite’s channel partner was either misinformed, didn’t understand the product or was simply ill-equipped to deal with the needs of its client.

Kepes added that even with NetSuite offering a cut-price deal the omni-channel solution was still too expensive.

“From a small business perspective, where you’re used to implementing MYOB yourself and making it work, we had the situation with NetSuite where there was a 60 day implementation plan, a two week full-time consulting visitation thing, it’s like it shouldn’t be that hard,” he said.

Cloud software is meant to be the antithesis of that.

NetSuite's managing director and VP of sales in Asia Pacific and Japan, Mark Troselj, told Business Spectator that every business, whether it’s a small or large enterprise, needs to have a seamless, consistent and single view of their customers, partners and suppliers.

"Consumers expect this, regardless of the size of the retailer. They want to browse, buy, compare and review products online via any device or in-store, and they want to know if it’s in stock and when it will be delivered."

“Today, cloud computing offers small businesses access to business management systems that have in the past only been in the realms of enterprise companies with millions of dollars to spend on an omni-channel solution. Delivering a seamless, end-to-end customer experience  is complex for any business, no matter the size. Piecing together the various elements of the puzzle can be costly and time consuming. NetSuite reduces cost and time to market by providing a single application that is hosted, maintained, upgraded and supported.

"At NetSuite, we run more than 20,000 organisations and subsidiaries – ranging from small to medium and large enterprise - on a single application, in real time, on the most current version of our software. These companies are very diverse, from services based companies to manufacturers to retailers to technology and financial services companies, and many other industries. NetSuite in ANZ has customers from all of these industries and many of them are small retailers.”

Too expensive upfront

IT manager Lachlan Simpson told Business Spectator that NetSuite “is too expensive upfront”.

As much as NetSuite is designed in a way that it’s easy to reconfigure to suite specific business needs, the requirements of moving systems over is complex and expensive.

“It requires time to learn NetSuite, to rethink processes and workflows and to develop the result OR,” Mr Simpson said. “Then you’ve got to get in an expert to do discovery, implement time for changeover - this will cost,” Simpson says.

He adds that the reality is small-to-medium businesses often “run on empty, with only just enough money to pay the bills month-to-month, or maybe just a little bit more”.

“Having an extra cost burden up front isn’t always easy to justify or arrange the capital for,” he said.

“And you need it to be successful otherwise there will be loss and waste.  Without an immediate return on investment, putting on more staff to implement the software can be hard”.

Simpson's company is in the process of building its own omnichannel solution in-house instead.

“Is this a smart idea? Probably not, but we are going in with eyes open. Is it a cheaper option? Absolutely,” Simpson said.

Keeping it consistent with customers

That being said, there are plenty of other SMBs that have had success with NetSuite.

Both Springfree Trampolines and beauty brand Aesop implemented NetSuite as their business management suites and both companies say they are more than satisfied with the software.

“Real-time stock information from NetSuite is a major benefit to us," said Leanne Fretwell, managing director of Springfree Trampolines Australia.

“SuiteCommerce has a separate fulfilment process from invoicing, which wasn’t the case with our previous systems. When a customer ordered online, a tax invoice was generated immediately, however, our old systems would think that the stock was also gone from our warehouse. It didn’t factor in customers picking up a trampoline at a later date or if they chose to lay-by. If the system was out, our stock was out,” Fretwell said.

“At the end of the day we all sell the same product, so we want to be able to treat our customers in a consistent manner.”

Troy Smith, Global Head of ICT, Aesop said the key motivation for the switch was the company’s rapid international growth “as well as the need for flexible scalability”.

“Our legacy systems spread across multiple markets were ill-equipped to deal with our international expansion plans and cracks soon began to show. NetSuite offers us the requisite speed, agility, flexibility and scalability to seamlessly support our future needs, particularly expansion into new markets.”

Claire Porter attended SuiteWorld 2014 as a guest of NetSuite

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