In an effort to modernize its business operations and eliminate the high cost of maintaining and upgrading SAP's (News
) complex, on-premise software, Kansas City-based distribution and light manufacturing company COMMCO has reportedly switched its business software from SAP R/3 to NetSuite OneWorld
Previously COMMCO, which distributes moulding to the home improvement market, including high-profile nationwide retailers such as Lowe's, was owned by another company which ran its business on SAP R/3. After being sold to new owners some years back, COMMCO was grandfathered in to its former parent's instance of the SAP operating system.
But with its prior parent company considering new options, COMMCO had to choose between continuing with SAP and managing it with a smaller staff, or selecting a next-generation enterprise solution.
The company ended up selecting NetSuite's (News
) cloud computing platform for its core operational needs, including Enterprise Resource Planning (ERP) functionality such as inventory management, ordering, fulfillment, EDI communications, corporate financials, and reporting; and Customer Relationship Management (CRM) functionality such as sales and customer service management.
In a press release, Franklin Christopher, President and CEO of COMMCO, said SAP's offerings fell far short of the NetSuite cloud solution. He calculated it had only 30 percent the functionality of NetSuite
"NetSuite Professional Services provided us with a smooth transition that included teaching us how to create our own reporting so that the average employee could customize their own role-based dashboards and reports going forward," Christopher said. "SAP wanted our business, but our knowing that NetSuite's entire focus is on SaaS (News
) and the depth of functionality they offered compared to SAP Business ByDesign made the choice easy."
In April, NetSuite announced
a new version of NetSuite OneWorld for SAP customers, enabling them to use NetSuite "at the divisional level," while retaining their current SAP on-premise systems at the corporate level. Through the integration of the two platforms, made possible through NetSuite’s “SuiteCloud Connect for SAP
,” large SAP legacy accounts can use NetSuite's on-demand application to manage business operations and roll up division-level transaction and summary data.
More recently, in September, NetSuite announced
a new incentive program, the “NetSuite Crossroads Initiative,” as part of its ongoing effort to lure more SAP customers over to its NetSuite OneWorld cloud-based offering. The new program targets SAP customers facing “end-of-life scenarios” with their SAP R/3 software.
SAP has announced that maintenance for R/3 V4.6 will end as of March 2010; and maintenance for SAP R/3 4.7 will be extended, but at a higher cost. These changes will affect approximately 70 percent of SAP users who now face the difficult decision of whether to pay increased costs for maintenance, or upgrade to SAP ERP 6.0.
In the case of COMMCO, the company could not justify the cost of continuing to use SAP R/3 which would have been in excess of $1 million. So it looked for SaaS options which could be implemented quickly, allowing a prompt transition from its former ERP system.
COMMCO considered SAP's SaaS product Business ByDesign, but decided NetSuite OneWorld was a “superior solution,” partly because it is better-tailored for a remotely located, growing business.
With NetSuite OneWorld, COMMCO management now has instant access to customizable analytics, with no need for consulting fees to prepare new
reports. What’s more, because the solution is cloud-based, COMMCO does not need to manage and maintain complex software on desktops and laptops, nor does it need to build a server room with all the associated costs and resources.
Patrick Barnard is a senior Web editor for TMCnet, covering call and contact center technologies. He also compiles and regularly contributes to TMCnet e-Newsletters in the areas of robotics, IT, M2M, OCS and customer interaction solutions. To read more of Patrick's articles, please visit his columnist page.
Edited by Patrick Barnard