Indeed, there are risks associated with implementations. Fortunately, having conducted numerous NetSuite implementations, we have a solid understanding of how to navigate these challenges!
Implementing NetSuite ERP can be as complex as performing brain surgery for your organization. Hence, risks are inherent in this process.
Fortunately, at Versich, we have considerable experience with NetSuite implementations, equipping us to manage these potential pitfalls. The saying goes that an expert is someone who has made various mistakes in a specific field; we certainly have encountered our share and observed many others along the way. Most issues, as it turns out, can be resolved; few are truly irreversible.
What Risks Are Present in a NetSuite Implementation?
Risks related to NetSuite implementation typically fall into four main categories:
Process risks
Adoption risks
Timeline risks
Budget risks
Process Risks in a NetSuite Implementation
Examples of challenges in this category include:
The software lacks a functionality that you assumed it would possess.
The software requires you to modify your processes in certain areas.
In the first scenario - where the software doesn't inherently provide a feature you believed it would - this usually doesn't lead to a complete halt. Instead, it creates a discussion about budget adjustments and timelines, indicating that additional work is needed to achieve your desired outcomes. There are no truly impossible features to integrate into NetSuite; it merely varies in terms of ease, cost, and advisability.
In the second scenario, where the software necessitates changes to your processes, this isn't as dire as it may initially appear. In many instances, we find that NetSuite corresponds closely with industry best practices, meaning conforming to its structure can significantly enhance your business.
Surprises related to process issues aren't pleasant. Therefore, here's a mitigation strategy: don't accept vague assurances during the software sales process.
If complex revenue recognition is vital for your enterprise, it isn't sufficient to hear, “Yes, NetSuite handles revenue recognition.” Trust but verify. Demand a demonstration of how it functions within a demo account. Involve a knowledgeable process owner from your organization in this demo to ask essential questions.
The aim here isn’t simply to determine if NetSuite fits your business, but also to understand how much customization will be needed to avoid unexpected challenges later on. In some cases, if NetSuite's structure aligns with best practices more effectively than your current processes, you might opt not to customize and instead work on improving your operations to fit the new system. Either way, you’ll be aware of potential tailoring costs or the need for organizational adjustments.
Of course, it isn’t feasible to deeply explore every process and system capability during the sales phase, so prioritization is essential. How can you identify which processes are most critical and should be emphasized in your discussions with NetSuite and your consulting firm during implementation planning?
Next, involve several seasoned employees from various departments to contribute their insights to this overview.
Finally, rank the key activities based on their impact on the primary objectives of the business (for example, “revenue”). The top few workflows should be the focus of early investigations.
Adoption Risks in a NetSuite Implementation
Adoption risks pertain to challenges concerning employee, customer, or vendor acceptance of the new system.
Here are three strategies to help mitigate (or at least lessen) these people-related challenges:
Communicate the upcoming changes far more than you might think is necessary. Typically, by the time you feel you're repeating the message excessively (“I’ve been discussing this change for months!”), a significant portion of your audience may only be hearing it for the first time (“Oh, we’re transitioning to a new system? I hadn’t heard.”). It's nearly impossible to over-communicate. Share information as much as you believe is excessive, then double that effort.
Encourage early adopters of the new system with incentives. Consider offering discounts, rewards, or prizes. The first experience will diminish their apprehension for subsequent uses.
Foster a culture where it's acceptable to feel confused about the new system. Transition periods can lead employees to worry about job security. What may appear as a minor software update to you can feel monumental to them. Address these anxieties openly and reassure them that perfection is not expected on their first or even second attempts. Additionally, ensure that training support is readily available through both your NetSuite consultants and knowledgeable super-users within your organization.
Implementing all three of these strategies will position you far ahead of most organizations tackling the NetSuite ERP transition.
Timeline Risks in a NetSuite Implementation
Whenever a NetSuite implementation fails to meet its scheduled completion date, it’s typically due to ineffective project management.
If individuals aren’t held accountable for their commitments, the entire endeavor can unravel. This accountability is crucial for everyone involved, including your staff, any hired consultants or NetSuite developers, as well as third-party software vendors and NetSuite/Oracle personnel.
Managing a NetSuite implementation involves multiple organizations, necessitating an extra layer of leadership.
Our consultants provide that essential leadership. They oversee not only Versich's responsibilities but also the broader project management, ensuring that all other project managers are coordinated. Given our extensive experience, it usually makes sense for us to take the lead as the primary project owner.
Many of our new clients express immense relief upon learning this. If you're feeling this way too, it’s understandable - it's reassuring to know you're in capable hands.
Each organization needs its own project manager to facilitate communication with the overall project owner. That manager should have the authority to guide their respective team to meet deadlines.
We often witness project management issues when the internal manager at the implementing organization lacks the authority to ensure team cooperation.
Thus, ensure your internal project manager has the backing of company leadership and the capability to enlist busy colleagues in necessary implementation tasks.
If there are any holdouts or resistant team members, especially in crucial roles, engage them in a conversation about how beneficial NetSuite will be for the organization (and especially for their specific departments). Help them understand that the extra effort now will lead to significant long-term gains.
Budget Risks in a NetSuite Implementation
Budget overruns can occur in two primary ways:
The actual costs exceed initial estimates.
There's a desire for something not included in the original project plan. This could be a new request or a feature that was assumed but not explicitly outlined in the budget.
For the first budget concern, we recommend establishing regular discussions to monitor the project budget against its progress. For our clients, we provide at least a monthly summary report that includes budget tracking. Toward the end of an implementation, more frequent check-ins, such as weekly updates, are often beneficial.
To manage the second budget issue, we propose three key strategies:
Employ tracer-bullet programming (previously described as “sketching lightly with a pencil”) to review customizations during the build process, rather than waiting until completion. These interim demos allow stakeholders to identify new inclusions much earlier, offering greater flexibility and more time to respond.
Define clear priorities for the implementation. There will always be more ideas and enhancements than the budget can accommodate.
Understand that while new features may increase costs compared to the initial plan, they might also provide superior value. If a proposed feature promises good ROI - meaning it generates more revenue than its cost - worrying about increased expenses is counterproductive. Instead, focus on ensuring the outcome ultimately benefits your bottom line.
Support for NetSuite Implementation
Now that you have an understanding of some associated risks in a NetSuite implementation and the strategies to mitigate them, the process may feel somewhat less overwhelming.
Additionally, collaborating with an experienced NetSuite implementation partner can significantly ease the journey! If you found this article helpful and are interested in assistance through our team, further details may be found in our resources.
