SuiteWorld 17 - NetSuite's secret weapon - the stairway to SuiteSuccess

One of the criticisms leveled in the early days against enterprise cloud applications was that they were 'cookie-cutter' solutions — that every customer had to take the exact same package, with no scope for customization to individual requirements.

As time went on, it became clear that, to the extent this criticism held true, it was a feature not a failing. Having everyone running on the same codebase meant that everyone could benefit from frequent and largely hassle-free upgrades in functionality. And for most businesses, adopting cookie-cutter back-office processes is more efficient anyway than devising your own custom way of raising purchase orders or recording a sale.

In any case, cloud providers gradually developed ways to provide configuration choices that meant their customers can tailor the way the application works to suit the specific requirements of their industry, geography, or other individual factors. In fact, these choices became so varied and flexible that cloud solutions eventually became vulnerable to over-configuration.

What would happen is that customers — often advised by old-school IT consultants — would try to configure the application to conform to the way their existing business processes worked. Whereas the vanilla configuration, for example, might allow for data entry on a mobile phone, or automated posting of online sales directly to the accounting system, the custom configuration would seek to replicate a more long-winded existing business process that had been designed before the advent of mobile phones and integrated digital business systems.

High stakes undertaking

The result of these misguided initiatives was that implementations took longer and were more costly than they needed to be. Even worse, they generally failed to deliver the improved performance the customer had hoped to achieve from adopting a cloud solution, leading to dissatisfaction and complaints.

This is why enterprise cloud application vendors today are increasingly investing in pre-configured, packaged implementations. They want customers to get started faster, for less cost, and realize the full benefit of operating in the cloud as early as possible.

This is particularly important in the small and medium-size business market, where budgets are restricted, patience is short, and replacing core business systems is a high-stakes undertaking. Being able to offer rapid implementation of a system that's ready to run makes for an attractive proposition.

Launch of a services offering

That's why NetSuite last week gave equal billing in its annual conference not to a product launch but to what is effectively a services offering — a methodology for implementing and optimizing your NetSuite instance. SuiteSuccess is a growing library of pre-built solutions, currently offered across eight different industries and 12 micro verticals within those industries, localized for different geographies, and continually updated to provide what the vendor describes as "leading practices for each industry and role including workflows, KPIs, reports, dashboards and metrics."

SuiteSuccess is also an agile implementation methodology that takes customers through a tailored 4- or 5-stage 'stairway', beginning with a baseline implementation completed within 100 days, and providing continuous engagement to further optimize adoption according to business needs and new feature releases.

Results from 300 customers signed up over the past year under an early release program have shown the impact of SuiteSuccess, says Executive Vice President Jim McGeever. Customers are going live 60% faster, with implementation costs 18% lower. There have been just 4 change orders out of that number, and 90% are immediately referenceable. Equally striking is the performance impact of staying with a configuration that NetSuite's own engineers have built:

Average pageload time in a SuiteSuccess account is 66% faster — when you standardize, you can optimize.

Why it's strategic for NetSuite

SuiteSuccess grew out of work initially done more than a year ago in the fashion & apparel subvertical, before being rolled out more widely. It's now become strategic for NetSuite, says McGeever, particularly in the wake of the company's acquisition by Oracle.

It is the most important initiative, it's the biggest change management inside of NetSuite that we've had for many years.

Whereas services were an important part of NetSuite's revenue numbers as a public company, Oracle's emphasis on building up recurring revenue means that NetSuite no longer has any incentive to book sales of services. Instead, the company will double down on using SuiteSuccess as a lever to help grow its subscription license revenues, says McGeever:

[Oracle CEO] Mark Hurd has only ever asked me one question. He's only ever asked me what the sales are of recurring revenues. When we were a public company, services were growing much faster than recurring.

Within two months [of the Oracle acquisition] we stopped paying our services teams on revenue. Our sales teams only get paid on selling recurring revenue.

Capturing market share

Partners will also be encouraged to promote and adopt SuiteSuccess, with the same margins of up to 30% that NetSuite offers on its other subscription services, says McGeever:

We're not viewing this as a competitive advantage for our services team. We're giving this free to partners — [but] you have to do the training.

NetSuite will use SuiteSuccess to help it capture entire micro verticals by offering a tailored solution, says McGeever. For example, he sees no reason why NetSuite's solution for university campus bookstores shouldn't capture the entire US market:

There's a market of 300 we're going after. It's not an industry where we expect to get 5 or 10%. We expect to get every single one of those.

It will also help the company reach smaller companies that previously had found the product too complex a proposition, he believes.

You've got to make easy for them to consume your sophisticated features ...

SuiteSuccess is now allowing us to sell to a higher number of smaller companies and support it. If you've got a method where you can sell it quickly and implement it quickly, you can do it.

Existing customers will also be encouraged to refactor their existing implementations along SuiteSuccess lines where this is likely to bring improvements, he added.

My take

Cloud application vendors are increasingly realizing that they're not selling a technology solution per se, but a means to a business outcome — and that therefore they must focus on the outcome, not just the technology. NetSuite's new investment in customer success is in line with this trend and will stand it in good stead as it seeks to build market share across multiple industries and micro verticals.