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RedBuilt is 'Largest Customer to Date' to Migrate from SAP to NetSuite
February 04, 2010
 
By Patrick Barnard, Group Managing Editor, TMCnet
RedBuilt LLC, a supplier of engineered wood products for the commercial and multi-family construction industry, has reportedly switched from SAP (News - Alert) to NetSuite to better meet its ERP financial management needs.

NetSuite (News - Alert) claims RedBuilt “is the largest company to date” to make the switch from SAP to NetSuite’s cloud-based business software.

According to a press release, RedBuilt made the transition in less than three months (86 days, to be exact), thanks mostly to the fact that NetSuite’s cloud-based software is fast and easy to deploy, requiring no upfront investment in software licenses, new hardware or network infrastructure. Also speeding implementation time is the fact that NetSuite offers out-of-the-box integration with other leading business software and systems.
 
What’s more, first-year costs with NetSuite, including licensing and professional services, are just half of what the company would have paid to stay with SAP. Ongoing costs will also be lower: NetSuite estimates that the company will save about $300,000 a year by making the switch – about $275,000 of which would go to service and maintenance of an SAP on-premises system.

Because NetSuite’s business software is delivered via the cloud model that means NetSuite takes on responsibility for application performance, including monitoring, troubleshooting and maintenance. In turn, this relieves the strain on internal IT departments. What’s more, the cloud model of delivery means all software updates and new releases are delivered automatically to end users – thus customers always have access to the most up to date features and functionality.
 
RedBuilt uses NetSuite to manage its corporate office and four production plants, including all accounting, inventory management, sales, marketing and reporting and analysis and payroll activities. More than 200 employees made the transition. The company, which had been using NetSuite CRM since 2005, was formerly the Commercial Division of Trus Joist – but when it went independent in August 2009, it had to switch to its own enterprise system. Knowing that the SAP solution was never really a good fit for the business, RedBuilt management shopped for a new system that would better meet its industrial client’s needs.

Having to make the transition so quickly, ease of use and employee training was also an important consideration: The NetSuite system, with its clean and intuitive user interface, was among the easiest to use out of all the systems RedBuilt investigated – which in turn helped reduce employee training time.

'We share the vision NetSuite has that the cloud is the future of information systems, particularly those who don't have endless resources to hire and retain top-tier IT talent,' said Kurt Liebich, RedBuilt CEO, in the release. 'At just a fraction of the cost of keeping SAP, we have a solution that is much more flexible and dynamic.'
 
In addition to eliminating SAP, RedBuilt also replaced its PeopleSoft solution for payroll and expense reporting with NetSuite's payroll and expense management modules.

SAP recently announced that maintenance for its R/3 V4.6 solution will end as of March 2010 -- and that 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 response to this, NetSuite announced an 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.

What’s more, in April NetSuite announced a new version of NetSuite OneWorld for SAP, enabling SAP customers to use NetSuite 'at the divisional level,' while retaining their current on-premises 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.

It now appears that both initiatives are paying off, as RedBuilt joins a growing throng of SAP customers who have adopted NetSuite’s cloud-based solutions – many of them washing their hands clean of SAP completely.

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

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