Lessons Learned on the Journey to Cloud ERP from Los Angeles Accounting Leaders

Earlier this summer, FloQast hosted a panel discussion with our partner Tactical Cloud at the Culver Hotel. We invited three accounting leaders of fast growing, Los Angeles based companies to share what they learned moving from accounting software to NetSuite’s cloud ERP system, including how to avoid ERP implementation failure — which is tragically common.

There were so many great takeaways that we had to divide this article into two parts! In our previous post, our panelists discussed the limitations of on-premises technology that led them to switch to NetSuite. They also shared the many benefits of a cloud ERP system for their companies and themselves. But it wasn’t an easy journey getting there. Here in part two in our two part series, we present the (sometimes painful) lessons our panelists learned along the way:

What You Need to Know Before Making the Leap to Cloud ERP

For those who are considering moving to NetSuite, Blake Hacker has some advice on what to do before you get started: “Do your homework. Understand your requirements. Really know what you need and what you don’t need. If you’re picking out software, know its strengths and its limitations, and really understand the all-in costs. Figure out if there’s additional software that you need, if there are additional integrations that you need, if there’s training you need. How much can your team handle and how much will you need to outsource to consultants? Get referrals. Talk to other customers and users, and learn from them. That’s really important.”

Blake Hacker, SmartLabs 
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Regarding configuring the selected applications, Blake says, “I like to start from the end goal in mind. In other words, think about reporting and then work backwards from there. At the end of the day, the goal is to get the users whatever reports they need.

“This is especially important with a highly customizable ERP like NetSuite. If you don’t think about your end goal, you’re going to build everything and then you’re not going to be able to get what you ultimately wanted anyway.

“This means you need to include everyone down to your lowest level employees in the process, so that you can find out what they need out of the system. Have champions in every department. People who are going to learn the software and teach their people. If you don’t have champions, you’re going to struggle when you go live or have to hire outside help that’s going to eat up your budget.”

Regarding training, Blake says, “The most often neglected and overlooked piece of a software implementation is training. Keep it simple to start. You don’t need everything under the sun right away. Get the core stuff rolled out and then optimize later. That’s important to make sure your implementation doesn’t take years. Do lots of UAT (User Acceptance Training).”

Amy Pool, Thrive Market 
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Amy Pool agrees that user testing is critical. “Test, test, test, anytime you’re adding software,” she says. “If you’re in NetSuite, use the Sandbox. Make sure it works. Every single time.”

Amy also stresses the importance of getting referrals from current users of the software you’re considering: “Reach out to your network and ask for real opinions about the software you want to implement. Don’t just listen to sales guys’ opinions, because those aren’t real opinions. You need to talk to someone who’s actually using the system. Understand what they struggled with or what they didn’t struggle with, what they like, and why they want to use it. That will really help you make your decision.”

How to Avoid Failed ERP Implementations

Shockingly — or perhaps not, given the difficulty of putting in cloud ERP systems — every single one of our panelists had previously experienced a failed or troubled implementation.

Blake Hacker remembers, “The original scope of our NetSuite implementation was to bring over the detailed transaction history of the company from inception. Every item on every order, every transaction — ever. What’s beautiful about NetSuite is that it’s fully integrated. The problem with NetSuite is that it’s fully integrated. You can’t simply import the history and have it work properly. We didn’t realize until far too late that it wasn’t possible.”

Danny Coorsh, Sugarfina 
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Regarding implementation partners, Danny Coorsh says, “I can’t stress this enough — get somebody with experience. Nobody in our company had experience in NetSuite. We also went the cheapest route available for implementation — the full outsourced route using overseas resources. There was nobody onsite. We could have avoided a lot of mistakes if we had better invested in our implementation.”

Amy Pool also had a tough implementation.“We started in August 2015 and wanted to go live in January 2016,” she says. “That didn’t happen and we finally went live in August 2016. We were advised to bring in all of our old transactions from QuickBooks, which was a mistake.

“Every time we pushed out our go live date, we had to do another import and fix the data. Our ERP administrator led us down the completely wrong path, and we spent a ton of money on consultants to get us back on track. We could have avoided that by getting the right person that knew what they were doing before moving forward with the implementation.”

Danny Coorsh experienced the pain of a rough implementation as well. He says, “Not only were we implementing a software tool; we were deciding the business process at the same time with a purely overseas implementation team. Questions such as, ‘How do we handle expenses,’ and, ‘How do we handle vendor payments?’ The implementation team could help us configure the ERP, but they couldn’t help us define our process.

“It’s important to have somebody guiding you who can actually recommend best practices, not just tell you what is possible. That’s super important.”

On Transitioning from QuickBooks

Amy Pool says that her first month on a cloud ERP system was difficult. “We did a hard cut-over and went from a 10 day close in QuickBooks to our first close in NetSuite that took 25 days. It was really rough. It wasn’t perfect, but from there on we got hold of it and worked on gradually shortening the close. There were a lot of kinks that we worked out in that first month, but we needed to make sure we got it right because we weren’t running QuickBooks in parallel.

“It took us about two or three months to get back to a 10 day close. After about 20 months it’s now down to 7 days.”

All-in-One versus Best-of-Breed

Danny Coorsh likes that NetSuite “does everything reasonably well.” He continues, “It might not be best-in-class at a specific function, but that’s why we use Adaptive Insights. It might not be best-in-class at eCommerce — that’s why we use Magento. But it does everything well enough to the point where you can get to that MVP (Minimum Viable Product) and actually start seeing value out of your systems.

“Then you can add more applications to fill in the gaps. The integration capabilities are incredibly robust and we’ve never had a third-party system we couldn’t connect to.”

For more takeaways from this event, read our previous article, “Los Angeles Accounting Leaders On The Benefits Of Moving To Cloud Accounting.” Interested in joining us at a future event or webinar? View our Events page.

Curious how NetSuite paired with FloQast can help streamline your month-end close? Watch our recorded webinar, Best Practices for the Month-End Close on Oracle NetSuite.