Every organization has a budget to work with and respect. Every year, your finance and accounting teams go through the painful budgeting process where they align dollars and cents to the overall business strategy. If this includes investing in an ERP, it’s important to understand the ins and outs of Oracle NetSuite pricing.

What Is NetSuite ERP?

The initial reactions could very well be, “What is NetSuite?” and “Do we really need another tool?” There will be lots of feedback on the idea of switching to a new system, but, if you’re a small business that is looking to grow or scale up, a NetSuite ERP implementation is definitely worth considering.

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NetSuite ERP Implementation and Pricing: FAQs

Your sales and marketing teams will likely be the first to get on board with an ERP tool. This would help them streamline their activities to ensure leads are followed up on and marketing campaigns are effective. Your order management teams will have sales orders out faster and more efficiently too.

The more common questions and concerns will probably come from members of your executive team, namely your CEO and CFO.

It’s a pretty safe bet that the first thing your CFO will ask is, “how much will this cost?” Oracle NetSuite pricing uses monthly subscription billing but there’s more to it than simply paying a monthly fee.

You’ll have to consider the solution that your organization needs and the modules this entails. Plus, there are user licenses and NetSuite training to consider for the key members of your teams that will use the ERP platform in their everyday activities.

How NetSuite Helps CFOs

Operational performance improvements: With more collaboration across teams within the organization, this unified system will improve efficiency and productivity.
Insights and visibility: NetSuite ERP will enhance the ways a CFO keeps an eye on current and future cash flows and where your company stands. So informed decisions can be made for future mandates and projects that could promote growth.
Reporting and financial compliance: Standards will be respected across varying regulators, thanks to revenue recognition solutions and more, found within NetSuite.
Motivated teams: An up-to-date ERP solution will motivate and empower teams to work more efficiently and deliver more insights, making them feel that this is a better use of their work hours.

Your company’s CEO will typically look at this investment in an ERP as a way to support your company’s plans for growth. But it may not be clear at first exactly how NetSuite can help them scale operations. It’s important to clarify how NetSuite offers insight and visibility that will allow them to identify opportunities.

How NetSuite Helps CEOs

Focus on financial and operational growth: Reinvesting in current staff by offering them an ERP system that lets them work better together. Maintaining costs will ultimately drive profitability and growth.
Brand image: A unified system improves product service and delivery so your company’s image is strong. Employee pride and motivation will keep them further engaged and efficient in their tasks.
An ERP that grows with your organization: As your business grows, you can add on solutions and functionalities so no processes will ever lag.
Clear insight into financials: Full reporting capabilities ensure financials are ready when needed, whether it’s for an audit or acquisition.

In the end, it often comes down to the numbers.

Building a NetSuite Business Case

As you are building your business case for a NetSuite ERP implementation, you’ll immediately want to answer the “why?”.

Why is it time to switch or add to your systems? Why is this important for your company’s growth and will this implementation support that growth? The right answers tend to be related to reasons around encouraging the business to grow, keep it growing, or scale up.

Typical scenarios where an ERP would help, are:

Current system doesn’t grow with your organization and can’t support further activities
Missing a software integration and data is scattered, making it difficult to get all the data you need to manage your business
Not enough reporting features that would help your business meet different reporting standards and requirements

And several other circumstances where an organization’s growth is dependent on taking this big step.

Why Your Sales Team Matters

It’s important to start by validating the company size and sales figures to draw a comparison with their industry average.

The cost of owning NetSuite depends on your company size and revenue
As an example, for midsize companies with revenue less than $1 billion, owning an ERP would cost around 3-5% of their annual revenue.

A larger company with revenue over the 1$ billion mark would allot 2-3% of their annual revenue to owning NetSuite ERP.

This means that many organizations are unlikely to be able to successfully implement a complex ERP system. Other potential reasons an organization can’t go ahead with an ERP implementation include:
lack of focus or resources
they don’t have the funds to pay for the software and
professional services costs to implement and maintain the new system are too high.

How to Justify NetSuite ERP Costs and Pricing

Return on Investment (ROI) and Total Cost of Ownership (TCO) are common tools you can use to build your case and justify NetSuite ERP costs and pricing.

Return On Investment (ROI)

The ROI calculation is often used to support business cases in the manufacturing industry. For example, a new machine is put in and one can amortize its cost as well as monitor cost savings and productivity that come from it.

The ROI typically measures the potential rise in productivity that the new system offers, the TCO will measure the financial impact it will have on the organization.

Total Cost of Ownership (TCO)

When implementing an ERP or a CRM, the return is harder to measure. The concept of TCO compares your current system with the new one. Be sure to look at what’s fully included in the TCO of your current applications so you can compare it with what vendors are offering.

And don’t forget the salaries of those who manage your systems. Keep track of all the extra work employees are doing to feed your older systems.

The Right ERP Implementation Partner

Learn more about what a successful ERP implementation looks like as well as the importance of a knowledgeable implementation team and partner.

GURUS Solutions has been a premier NetSuite partner for well over 15 years.

Contact us as we have the experience and know-how to support a diverse portfolio of NetSuite projects, within many different industries.