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How the On-Premise ERP Model killed itself slowly.

How the On-Premise ERP Model killed itself slowly.

Brief Recent History of Cloud ERP.

Over the past 15 years, most “On-Premise” software vendors have clamoured to come to market with a cloud offering to satisfy the needs of increasingly savvy CFO’s. Interestingly, we now find ourselves in a critical junction where the difference between true-cloud solutions and fake-cloud solutions is starting to become more apparent.

Many customers who have invested in upgrading their existing on-premise ERP solution to their software vendor’s “new and improved cloud solution” are beginning to realise that the differences between hosted cloud and true-cloud are quite significant.

Software developers realised quite a few years back that cloud technology was going to change the industry permanently. When evaluating whether or not they too would look to develop a true-cloud version of their products offering, the reality of such an undertaking became apparent. A number of software companies had multiple failed attempts; they invested millions if not billions of dollars in trying to not only migrate their technology platform to the cloud but also:

1. Re-skill internally to handle a new type of technology.

2. Market their latest offering in parallel to their legacy on-premise offering.

3. Attempt to migrate large portfolios of clients onto largely unproven new “cloud” versions.

4. Continue to try to acquire new customers onto platforms without referenceable customers.

Indeed, it was a tough time for traditional ERP software companies with no easy solutions or answers to the problem.

So, what was the problem?

Simple, their technology suddenly became obsolete and in the long-term could not compete with the features, platform and benefits that the emerging true-cloud technologies, such as Salesforce and NetSuite could offer to their customers.

These true-cloud vendors seized the opportunity to invest the money that other older software companies were spending on moving to the cloud, and instead poured this into R&D for better features and functionality for their users. In addition, the SaaS model of pricing meant that a true-cloud vendor’s focus was and continues to be on new customer acquisition and long-term customer retention.

Benefits of the SaaS Model.

The SaaS model is like an insurance policy for customers. If the software is no longer fit for purpose (either through growth, changes to a company’s operations or some other factor), they can simply leave and select another vendor.

Furthermore, because Cloud ERP takes far less time to implement and go-live (Klugo have had client’s go live on NetSuite in as little as eight weeks), migrating to a new product isn’t the protracted and painful process it has been in the past.

How on-premise Perpetual Pricing turned out to be slow suicide.

You see, the traditional On-Premise module of pricing meant that customers had to pay a higher once off licensing cost. The problem is that they had to pay ongoing “maintenance” and support annually, to continue to have access to the latest updates and necessary support from the vendor.

Here’s the second problem, because on-premise software is a single instance on their server, more likely than not, businesses chose over consecutive years to not upgrade, which meant their yearly maintenance fee was wasted and their version neared a point where it would become unsupported.

A growing business in 2019 needs to understand the difference between True Cloud Technology Model and the Fake Cloud Hosting model used by the majority of legacy applications.

Is your cloud software True-Cloud or Fake-Cloud?

We would suggest if you aren’t using Xero, NetSuite or Salesforce, then probably not (with a few exceptions).

An easy way to tell is to ask yourself the following questions:

Optional Upgrading

Can I choose when my software gets upgraded?

Upgrading Downtime

 Does the vendor need to take the system offline for a period to upgrade?

Customisation Risk

Is there a risk your customisations will break after an upgrade?

If you answered Yes to any of these three questions, then you are using fake cloud technology.

What does that mean?

So, what does this mean as your business grows? Well, it says you’re probably going to face the same challenges as customers with legacy on-premise software.

 

  1. Time-consuming upgrades that impact the businesses day to day operations.
  2. High risk of Customisations, Reports and API’s breaking upon upgrade.
  3. Partial re-implementation to get the system back online.
  4. High costs associated with Professional Services for upgrading projects.

What benefits can true cloud software bring to your company?

The low cost of cloud software has contributed to its widespread adoption. Cloud computing can save a company massive amounts of upfront and ongoing IT expense. Compared to on-premise software, cloud-based software reduces hardware requirements and the need to spend money on an internal IT resource. According to McAfee, cloud usage is now over 90%, suggesting that companies still using on-premise software are falling behind. With its short implementation time and fast deployment rates. Storing data in the cloud allows for flexible working, and this means that company data is accessible to employees anywhere both in the office and remotely, with easy access on mobile devices too.

At Klugo, we help customers understand the real impact of the decisions they make regarding cloud technology. We assist in the evaluation process of moving to a modern cloud platform and can help you understand the long-term impacts of the type of technology you choose to invest in.

We’d love to help.

We have one of the leading Business Consultant teams in APAC ready to help our customers leverage the power of NetSuite. Realise the full benefits of what you can achieve with true-cloud technology. If you are interested in learning more, feel free to reach out for an obligation free discussion with one of our business consultants

All there is to know about NetSuite

Interested in knowing more about NetSuite true-cloud platform? Download our NetSuite Ultimate Buyer’s Guide and find if this ERP is fit for you business and can help you to centralise your CRM, finances, inventory, accounting, human resources and all systems into one centralised powerful solution.

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How the Right Software Implementation Strategy Supports Success in Growing Businesses.

How the Right Software Implementation Strategy Supports Success in Growing Businesses.

The words “IT strategy” are usually enough to make most Business owners roll their eyes. However Smart business owners understand but when it comes to designing an IT strategy the decisions that are made early on in the businesses life-cycle have a far-reaching impact as time goes on and business requirements change.

Most businesses start out with a core need in two main areas.

  1. Accounting and Financial Management
  2. Sales and CRM.

There are literally thousands of software packages on the market that aim to provide cost-effective solutions to specific areas of the business’s needs. In most cases, business owners look at potential IT problems through a very narrow window. More often than not, and quite unintentionally, business owners create a cluster of systems with the goal of solving immediate problems rather than looking at the bigger picture.

Typical symptoms of this approach include:

  • Duplication of data entry, often across three or four different systems.
  • Separate silos of information.
  • Inability to gain access to live data.
  • Multiple spreadsheets being kept to manage information that is not covered by existing software functionality.
  • Increased staff numbers to cope with increased demand.

For a growing business these symptoms not only waste valuable time that could be spent in improving business processes but also cost a lot of money when you consider the amount of time and effort that goes into trying to manage a disparate cluster of software systems.

At Klugo, we help businesses assess the current IT and software strategy and design ways to not only improve this immediately but also plan requirements in the future. More often than not we see businesses that started out small and have either experienced rapid growth or industry changes that have impacted the way they need to capture data and report on information.

“A typical NetSuite customer is either a small to medium-sized business (up to 1000 employees) who has experienced rapid growth or is gearing up for planned growth.”  says Michael Dean, Klugo’s Business Consultant.

Similarly, other businesses that look to make a system upgrade to NetSuite might have some new requirements, such as new reporting for government or administrative bodies, and their current systems cannot support the business’s needs.

In either case, the need to have a holistic software solution to manage the needs of the entire business becomes evident. That’s where NetSuite comes in. For over 20 years, NetSuite has been the leading cloud-based business management platform and has grown to managing over 40,000 businesses worldwide.

NetSuite is different to most traditional or legacy ERP’s as it offers users the ability to start small, with just the modules they need to manage their current business problems, but also gives them piece of mind that they will be able to continue to expand NetSuite’s functionality as the business continues to grow and change.

The Phased Implementation

As a NetSuite partner, Klugo helps customers define which NetSuite edition and module mix is right for their immediate needs as well as putting a continual improvement plan in place to ensure the wider needs but the business has been considered during the evaluation process.

Phase 1. The Sprint to Go Live

Typically, customers will look to “go live” with the core functionality that will allow them to trade and provide a replacement to the legacy systems the business have been using previously. In most cases this phase 1 but implementation will provide a robust and highly automated solution that manages:

  • Core accounting, financial an inventory control.
  • Sales, CRM, and customer support.
  • Procurement and purchasing automation.
  • Dashboards, core reporting and business workflow automation.

Phase 2 – Expanding the Solutions Footprint

After a few months of using NetSuite, we revisit the implemented solution and original goals of the project to identify any areas of core business operation that still needs to be improved.

Phase 2 implementation often provides functionality and automation for:

 

  • Marketing campaigns and lead source management.
  • Warehouse automation including barcoding, scanning and printing solutions.
  • Payroll, including timesheet entry, expense management and employee purchase requests.
  • Work order management and assembly builds.
  • Work centre reporting, WIP and job routing.

Phase 3. Continual Improvement through Managed Services

Once customers have implemented NetSuite across all departments of their business, they now look to undertake continual improvement activities to ensure that their users are improving their use of standard NetSuite features as well as making the most of new features and functionalities that become available at each new release.

At Klugo, our Customer Success Team works closely with our clients’ key NetSuite champions to ensure that there is a clear plan for continual improvement and to guarantee that they are getting the most out of their investment into the world’s leading cloud technology. NetSuite is a very comprehensive management platform, and we encourage our customers to always look for new and better ways to use NetSuite across the different departments of their businesses.

If you’re new or an existing NetSuite customer, we would like to discuss how we might be able to help you improve your current implementation as well as partner-up to continually improve it in the future. Feel free to reach out to one of our business consultants for a confidential and obligation free discussion.

Need a specialist’s free advice?

We’re one a 5-Star NetSuite Solution Provider, and we are dedicated to help our customers leverage the power of NetSuite. Feel free to reach out. We’d love to help.

NetSuite Ultimate Buyer’s Guide

Find in this guide all the modules and technologies integrated into NetSuite, the cloud-based ERP that can support your growth.

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ERP Terminology Demystified

ERP Terminology Demystified

For any business starting the process of evaluating ERP for their companies, one of the biggest challenges is understanding the unique industry terminology that ERP professionals use to explain their products, their industry and their offerings.

Like most industries, the ERP world comes with a lexicon of terminology that we take for granted, and often forget are not commonly used in the day to day running of small to mid-sized enterprise.

In this article we simplify and explain ten terms in the jargon you will come across when evaluating new systems. If you want to demystify the seemingly never-ending supply of acronyms we invite you to download our list with more than 40 useful terms that will help you understand better the common abbreviations and words used by the industry.

HOW MUCH DO YOU KNOW ABOUT ERP?

We dare you to test your knowledge on the most common terms from the ERP industry. Are you a guru or a newbie?

Take the quiz

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Abreviations

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True Cloud

Select only the statements that apply to True Cloud software.

Technology




Hosting




Data




Connections




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Software Models

A model of software licensing which streamlines the total cost of ownership into lower monthly, quarterly or annual payments. The software is owned by the vendor and is accessed by the business through user licences. Access to the software includes hosting, support, maintenance and upgrades.

A model of software licensing that requires a total upfront investment. The business owns in perpetuity that version of the software. Ongoing maintenance and support are not included in the initial fee and must be arranged on the side. New versions and upgrades are not included.


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Results

No matter what your results are, we encourage you to download our "ERP TERMINOLOGY DEMYSTIFIED" guide, it has all the English terms commonly used in the ERP industry. Your final score out of TEN (10) is:

Summary

Description Information Quantity Grade
Grade:

Download the guide.

Searching for “ERP” on the web can be overwhelming, the amount of information that comes up is limitless and confusing. Different websites mention ERP and technical terms that can vary from one implementation to the next. To get a deeper understanding of how ERP solutions can transform your business, it better to have clear what an ERP actually is and the parts that compose it. Here are the first ten terms of our downloadable guide:

ERP

Enterprise Resource Planning software provides a comprehensive suite of functionality to suit the broad requirements of businesses in their areas of specialisation. ERP delivers functionality to look after customers and their orders, vendor details and purchasing and procurement, accounting and financials, warehousing and inventory management, work orders and assemblies, WIP and routing, project management, job costing and more.

Allocation Schedule

An automated way to allocate costs or income based on predefined rules in the system. E.g. Allocating rent expense to each department by headcount. Particularly useful for more granular profit and loss reporting.

CMS

A Content Management System is the software used to build, maintain and display your website.

Business Intelligence (BI)

Usually refers to dashboards and reports that draw data from different modules in the ERP and present this as live information to the user.

Cycle Counting

Functionality of ERP software that allows for singling specific inventory items or categories for frequent stock take counting. This functionality eliminates the need for full warehouse stock take processes and provide more accurate real-time inventory valuations.

MRP

Material Requirements Planning software is designed to provide a systemized approach to turning raw materials into finished goods. MRP will also look after how a work order that is in progress is routed throughout the production floor to ensure optimal use of labour, equipment and storage.

Mobile Data Collection

The ability to collect data on a mobile device through a mobile optimised, usually simplified interface.

Backflush

Backflushing delays the GL impacts of costing work order production until the work order is complete. Once complete, the ERP automatically ‘flushes’ back to assign individual costs to the finished goods. The opposite of this would be “WIP” or Work In Progress costing, where inventory and overhead costs are attributed to a WIP account in real or close to real time as work is in the process of completion on the work order.

RAS. Resource Allocation Scheduling

Functionality that automates resource and materials capacity planning as well as providing suggestions for optimum scheduling and resource allocation, usually in the context of projects.

UX

The User Experience. Elements in a system such as utility, ease of use and efficiency that add value to the customer’s journey and experience of a software.

Download the Complete Guide.

Get your copy of the ERP TERMINOLOGY DEMYSTIFIED. A list with more than 40 English terms commonly used in the ERP Industry.

Need a specialist’s free advice?

Feel free to call an expert in Enterprise Resource Planning Systems today. Find out how cloud-based technology can make your business a real technology beast.

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Connect Your Entire Business With Cloud Technology and Vertical Storage

Connect Your Entire Business With Cloud Technology and Vertical Storage

Connect Your Entire Business 

Using vertical storage and a cloud technology, connect your entire business, from back office to front office processes. NetSuite treats each vertical storage machine as a location in your warehouse/s and immediately depletes stock, driving procurement and demand planning processes.

What’s the value of your warehouse being connected to your ERP?  

If your vertical storage machines are not connected to your core business management platform, then you will have a fragmented, paper-based, inventory management process. When stock is used, it’s not immediately updated within your inventory replenishment or financials.

About NetSuite

NetSuite is a cloud-based, business management platform, enabling you to manage your entire value chain, from marketing & sales, demand planning and procurement, assembly, supplier management, warehouse management, inventory control, pick, pack & ship – all impacting your operational business intelligence and financials in real-time.

Benefits of Having Your Business Fully Connected

Here are some statistics our customers have achieved through implementing NetSuite and connecting to their vertical storage:  

Tech Review

If you’re not sure that your business is ready for NetSuite, a free tech review could be just what you need. We’ll look at your existing infrastructure and provide you with a high-level report with the next steps to take.    

Is the Complexity of Compliance Putting you at Risk?

Is the Complexity of Compliance Putting you at Risk?

A compliance management process is a critical requirement of all businesses, involving every business function and department. Often a manual task with mountains of paperwork, compliance checks often consist of keeping and coordinating multiple data sets – spreadsheets, documents and emails which can be reliable, prone to human error or misplacement, leading to data duplication, information gaps and wasted resources.

The 2016 Dreamworld accident is a strong reminder of what can happen when compliance processes fail. Workplace Health and Safety Australia’s investigation identified seven critical issues that had been missed during compliance and safety checks.

Craig Davidson, CEO, Dreamworld agreed that breaches identified by WHS required system and process changes to address. Businesses need a structured compliance and risk management process that’s embedded in their core technology system. NetSuite is a cloud-based, unified business management system that underpins the entire business operation, and can manage safety and compliance without data duplication and the need for manual additions. Intelligent and proactive workflows, schedules, attendance and the completion of critical tasks in order to ensure their compliance processes are simplified, rigorous and risk free. Is your system up to the task?

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Soaring Above the Clouds | The Strategic CFO Magazine

Soaring Above the Clouds | The Strategic CFO Magazine

 

 

This month, our CEO Annaliese Kloe features in The Strategic CFO Magazine. Check out the article below.

Soaring Above the Clouds | Bernard Hickey for The Strategic CFO Magazine It’s hard to imagine a more unlikely beginning for a cloud computing company. Headland Machinery was founded in in 1949 as an importer and servicer of machine tools. That means lots of heavy equipment being installed and serviced by men in overalls with clipboards and spanners and forms to be signed in triplicate with biros that were usually in shirt pockets or tucked behind the ear. Acquired by the Kloe family in 1979, Headland grew across Australia with its manufacturing sector through the 1980s and 1990s. Annaliese Kloe and her brother Richard came into the business in 2001 and 1993 respectively to help grow the business. It suffered the usual growth pains with a multiplication of accounting, sales, marketing, inventory and invoicing systems that replicated in server rooms and lunch rooms and chewed up reams of paper. Annaliese recalls those pains and explains why the company looked to move to a cloud-based ERP system in 2009 that simplified the company and reduced costs. “We also had people in all parts of Australia, so it was getting very expensive to coordinate and manage the team. Because our systems were not connected, we spent money on the knowledge base to overlay across the top,” Kloe says. “That works to a point, but once you grow and get bigger, then the costs escalate because you have to have a duplication of tasks,” she recalls. So Headland moved to NetSuite. But it then had to work out how to manage all its engineers out on the road across a big continent in multiple time zones. NetSuite didn’t have a module that could be plugged in to allow those men in overalls to service the machines in a seamless way with NetSuite. So Kloe took a brave decision for a manufacturing servicing company. She and her family decided to employ some software engineers to build a field service module that fitted into NetSuite to suit their needs.

“We built a drag and drop schedule board. We linked to a lot of elements of Netsuite and then built a field mobility solution to use on iPads or phones – the thing that actually manages the task down to the engineer,” she says.

Instead of pulling their clipboards out of the dashboards, they pulled out an iPad and managed the maintenance of the machines, the ordering of spare parts, the creation of invoices and the reporting on jobsheets in a way that hooked up seamlessly with Headland’s ERP system. “These engineers would get a list of tasks for the day on their iPhone or iPad, which have geolocation software and mapping so they can see exactly where the site is, which say that they need to fix their equipment,” she says. Headland did the job so well it won a global award from NetSuite in 2013 that is known as the ‘Your NetSuite’ or ‘Suite’ award. “Then we thought other people would like the same sort of solution – people who run Netsuite would need this solution,” Kloe says. Kloe and Headland then decided to set up a completely separate business called Klugo Group that helped businesses integrate NetSuite and used the Headland module for field service teams known as NextService. Surprisingly perhaps, no one globally had invented such a module for NetSuite. Klugo was able to piggyback off the Headland example. “The difference is the story. Because we with our other company were a user, and we also developed on the platform, it really enabled us to communicate to new client the driving demands of why you’d choose a solution like NetSuite,” she says. Klugo was able to demonstrate that Headland saved $375,000 in its first year by implementing NetSuite. “That’s why when we talk to clients we talk to them about our experiences and what you need to do to transform your business and change, especially when you’ve got a lot of price pressures and you need to become a lot more efficient.” Headland has continued to grow into a $30 million a year business in turnover terms with 60 employees. Klugo has grown since its foundation in 2013 into a 40-person company.   To read more from The Strategic CFO, you can subscribe to their digital paper here.