NetSuite CEO talks omni-channel challenge, CRM re-imagination and services

Cloud ERP player NetSuite is holding its annual conference in San Jose this week, where thousands of attendees took to the keynote theatre this morning to listen to what announcements, predictions and competition bashing quips CEO Zach Nelson had in store for them this year. Although things got off to a rocky start thanks to a 45 minute or so delay due to a power outage (which prompted one humorous Twitter user to ask: “Has Zach taken up sailing this year?”), Nelson eventually took to the stage and delivered his take on the cloud-based ERP market and revealed NetSuite's plans for the coming year.

As is proving popular with cloud CEOs, Nelson started off the session reeling off a number of stats about the company's healthy cash-flow in a bid to allay any profitability concerns. But I'm no accountant, so I'll leave that one to Dennis and move on. He then took his usual, and somewhat entertaining, jibes at the traditional on-premise players, citing NetSuite's impressive growth figures in the cloud ERP market (up 41% in the last year, according to his Gartner stats) – but I won't go into this here either, as we all know what choices there are in the market and nothing is clean cut in enterprise software.

However, Nelson did make a number of announcements, which I'll firstly summarise here, and then go into a bit more detail later on for a couple of the more interesting points:

• NetSuite has revealed its 'next generation' user interface for its core platform, which is based on a flat design, takes advantage of HMTL5 and has an improved experience for tablet users.
• A new B2B Customer Centre, built on NetSuite’s SuiteCommerce platform. The new B2B Customer Center aims to help B2B merchants deliver a B2C-like online shopping experience and extends functionality for B2B buyers to view order status, details and history, track shipments, reorder goods, approve quotes, make payments, manage account information, request refunds and returns, and more, in a secure, password-protected environment.
• Nelson also revealed the company's new services resource planning (SRP) solution. A product he claims is “the first and only cloud suite that brings together the strengths of ERP and professional services automation”, which allows product AND project focused business to run their entire life-cycle all in one unified platform.

We've all got omni-channel and CRM problems

Nelson's main sell during the keynote and the following press Q&A focused on three key points – 1) that all businesses now have an omni-channel problem, it's not just retail, 2) companies can no longer see CRM and ERP as two separate entities, they need a single view of their data to really excel, and 3) businesses will no longer be just a product company or just a services company, the two will merge and they will need a single platform for this too. Let's deal with points 1) and 2) first...

Nelson said that because of the the diversification of points of sale, via the web, via mobile etc, customers are going to be coming at businesses from all different angles, through different user interfaces, through different channels, and through different touch points – regardless of whether they are B2B or B2C.

NetSuite's SuiteCommerce platform (announced 2 years ago) aims to solve this omni-channel problem, but he said that companies need to re-imagine their CRM, and can't view CRM and ERP as two separate entities anymore. He said:

“The only way to get a single view of the customer, is to have a single view of the customer. The problem with omni-channel commerce

today is that at minimum there are three views of the customer – you have a retail view of the customer, you have a e-commerce view of the customer, and you have a call centre view of the customer. You can't put Humpty Dumpty back together again. So frankly the only way to implement an omni-channel strategy is to have a single system of record

“We began rethinking this problem very early by including traditional CRM seamlessly with the data that actually supported use cases where you're engaged with the customer, you actually know what they bought, you actually know if it got there, you actually know if the service was delivered. 

“I believe e-commerce and omni-channel commerce is the future of CRM – your most pleasant CRM experience has nothing to do with a sales system or a sales person, it has to do with a great interaction with a machine. I went to iTunes, I bought a cool product, I didn't have to call support – that's an incredible CRM experience. These are not what CRM systems are designed to do, this is a business problem.  The only way to solve this problem is to have everybody looking at the same data.”

The internet of things creates a problem for products...and services

Following on from his discussion about how companies are going wrong on the CRM/ERP front, but still very much along the same lines, Nelson then went on to talk about his SRP product announcement – a tool that aims to bring together all data for both product and service-based companies. His argument is that software and the internet of things are changing how people buy goods, meaning that almost everything will be both a product and a service. NetSuite hopes that its SRP platform will now cater for that challenge.

He said:

“There are no clear lines between what your company is and what some other company is. The simplest way to say it is that product companies are becoming services companies, and services companies are becoming product companies. This has incredible repercussions for how you manage your company, it has incredible repercussions for how you account for all of this data – that's a big challenge. 

“It's a much larger challenge from a business model standpoint, how do you transform your services into products and how do you transform products into services? When you hear people talking about the internet of things, that's really what they're talking about e.g. selling a jet engine with built in service attached to it. This is the next disruption happening in the world and this is a battle you are going to have to fight and win. 

“What does this all mean? You have to figure out a strategy about how to future-proof your business and we think an important piece of that is having a flexible, future-proof business system that you can experiment with, try new things with and not take a year to do it."

Nelson said that NetSuite has been able to integrate the services capabilities into the native environment thanks to its 2008 acquisition of OpenAir, from which it has learnt how complex service processes work. However, he was also keen to highlight that this doesn't mean that OpenAir is going anywhere and that the product will still operate independently of SRP. He said that OpenAir is still successful in its own right, particularly with large enterprises that aren't looking to get rid of their on-premise applications, and are just looking for an add on. Nelson reiterated this by highlighting that NetSuite has doubled OpenAir's development organisation in the past 18 months. He said:

“Today we are announcing a new version of NetSuite to transform the services industry. Again in services, CRM definitely doesn't look like lead, opportunity forecast. If you run services organisations, CRM looks like getting the bid right, managing the statement of work, hitting project milestones, change management, billing the customer properly, managing utilisation.

“We call it SRP, give them the tool to automate the processes. We've used all of our learnings with OpenAir as an integrated product, to really change the game for all of the native functionality that we have put inside NetSuite. This is the first system where you can manage a services based company and a product based company in the same system, and I really think that this is the future of all organisations. Typically that's been in two different systems, but now you can deliver incredible customer experience, incredible efficiency in your business, within a single platform."

Myself and Phil will be picking up further content tomorrow at the second day of the conference, so keep your eyes peeled for updates....