10 Tips To Save On NetSuite Cost
NetSuite is a cloud-based ERP (Enterprise Resource Planning) software that helps businesses manage their operations. It is one of the most popular Cloud ERP solutions in the market today, with over 240,000 customers worldwide. If you are looking to implement an ERP solution for your business, NetSuite may be a good fit for you. However, it can cost a lot of money to get started.
The price tag for NetSuite license subscription is around $25,000 to $50,000 per year. On top of NetSuite license subscription, implementing the software ranges between $25,000 and $50,000 for a 100 employee company size.
The good news is that there are ways to reduce this cost. Here are ten tips your company can save on NetSuite license and implementation costs:
Tip1: Choose the right Add-On Modules And Edition For Your Needs
NetSuite subscription is modular which means that NetSuite provides you with options to select the necessary functionality as add-on modules. The NetSuite basic subscription provides you with core functionality and platform for managing your financials and basic inventory management, but each add-on module provides you with additional functionality needed to meet your business needs. Each of these module is priced separately and you can buy these modules only if you need them.
For example: Based on your business processes you would want Advanced revenue management which is more relevant to service based companies or Inventory management which has features to cater the distribution or manufacturing industry.
While you buy NetSuite subscription and the relevant modules ensure that you have throughly understood what each add-on module does which you plan to purchase.
I would recommend not to subscribe to modules which you thing are not relevant now but might require in the future. Any module of NetSuite can be subscribed later on whenever the need for that module arise.
NetSuite also provides industry specific editions which can be utilized for saving on cost. Selecting the right edition for your industry can give you all the necessary features you need at a cheaper cost.
Tip 2: Buy NetSuite From A Solution Provider Partner
NetSuite partners are a great resource for companies looking to leverage the power of NetSuite. They can help you with everything from implementation and training, to ongoing support and maintenance.
There are specific type of partners called “Solution Provider Partners” who resells NetSuite license subscription. Although your contract remains directly with Oracle NetSuite, these partners get rewarded with a commission to bring new customers onboard.
The advantage you get here is that these partners are sometimes cheaper considering they also get revenue from license and provide better service compared to “Alliance partners” who only provides NetSuite services and are not involved in the sales cycle.
Another advantage you get with Solution Provider partners is that you do not have to deal with multiple parties during your selection process which helps a lot while selecting the right modules which you would need while you subscribe to NetSuite.
Tip 3: Buy NetSuite License From Emerging Country
Oracle sells NetSuite ERP across the globe and the list price of its modules and user licenses is same across. But in order to penetrate the emerging markets, Oracle NetSuite offers steep discounts in these regions. This empowers even small business to purchase NetSuite for their business operations.
It is always preferred you buy your NetSuite subscription form an emerging country so you can take advantage of these additional discounts. You will find better discounts in India, Pakistan, Bangladesh and in the African region.
Unfortunately you will be able to subscribe to NetSuite from these regions only if you have a legal entity there.
Tip 4: Negotiate Hard For Discounts
If you are buying NetSuite subscription from an emerging market then it is important that you negotiate hard on the discount offered by Oracle NetSuite. If you don’t ask for any discount, chances are you won’t get one.
It is very important that the discounts are negotiated as these discounts are also automatically applied on your renewals.
If you negotiate hard enough, you can save up to 50% off the list price of NetSuite subscription in a developed market like US and Europe and upto 70% in an emerging economy like India, Pakistan, Bangladesh and in the African region.
Tip 5: Do Not Subscribe to All The Users And Add-On Modules On Day One
One mistake that most of the companies do is they subscribe to all the modules and user licenses on day one. This costs them a lot of money as the licenses might not be utilized until the implementation is done and you keep paying for the licenses from day one.
NetSuite implementation might take 4 to 8 months depending on the scope of the project. While the user count might be 50, these licenses are not needed on day one. Initially, you should be good with 5 to 10 user licenses which will be utilized by the partner team for implementing the Oracle NetSuite ERP application. You always have the option to add user later when the system is ready as per your business processes.
Tip 6: Negotiate The Uplift On Renewal
NetSuite will increase your subscription cost every year based on the agreed terms in the SSA (Software subscription agreement) you sign. This agreement also has an uplift clause which defines how much increment in cost would be there for the next renewal.
Generally NetSuite sets the uplift to 10% by default but this can be easily negotiated to 3% in emerging markets and 5% in developed markets.
Tip 7: Choose Multi-Year Subscription Contract
One way to tackle the uplift on NetSuite license cost every year is to have a multi-year contract with NetSuite. Doing so proves to be a very effective cost saving approach.
In some scenarios NetSuite provides a multi-year contract. Which means that the uplift is not applicable until your contract expires.
Going with a multi-year contract locks in your discounts for multiple years and you are sure what your cash flows would be for the period the contract exist.
Unfortunately NetSuite would not provide multi year contract for smaller deals but sometimes a special approval is granted for larger deal size.
Tip 8: Use the Right Implementation Methodology
When choosing an implementation methodology, make sure you choose one that fits your needs.
NetSuite famously used its implementation methodology “NetSuite One” for all its implementations. Recently NetSuite formulated a new methodology called ” SuiteSuccess” to reduce the overall cost of implementation.
In the “SuiteSuccess” methodology recommends taking a stairway approach for implementing NetSuite that is you only implement the basics first and later slowly implement the advanced modules.
NetSuite also launched its industry specific SuiteSuccess editions with predefined dashboards and processes. This approach reduces the implementation efforts as well as time reducing the overall NetSuite cost of implementation and giving a faster return of investment.
This methodology is proves good for startups who does not have many processes defined.
Tip 9: Choose Remote NetSuite Implementation
NetSuite is a cloud based ERP system and can be accessed from any part of the globe with only a laptop and internet connection. There are no specific hardware requirements to implementing NetSuite. This means that a person sitting anywhere in this world can implement NetSuite without any constraints.
Bringing resources onsite increases the cost of deployment and adds to the overall project cost. Almost all NetSuite partners provide remote implementation services which is really a cost saving methodology.
There are plenty of partners in India who can provide the same quality of services at a reduced cost as the resource cost is much lower. In fact most of the companies in North America, Canada and Europe use resources from India to maintain higher profitability on the project.
Tip 10: Hire An Expert In-house
Hiring an expert can be a big help. They can provide guidance throughout the entire implementation process. Experts can also help you with further enhancing the functionality of the system by providing recommendations based on their experience.
Although, hiring an expert adds to the cost of the system but it ensures the the right project management practices are followed, and the implementation partner is reviewed on an ongoing basis, increasing the chances of successful project implementation .
It is not necessary for the expert to have knowledge of NetSuite but the expert should have good experience in ERP implementation.
I like how you mentioned that you could access NetSuite support using a device and an internet connection. A friend of mine told me a couple of days ago that he was looking for NetSuite support that could provide implementation experience for the investment goals he was aiming for. He asked if I had any idea what would be the best option to consider. Thanks to this informative article, I’ll tell him he can consult a well-known NetSuite support company as they can help provide resourceful information.