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SAP ERP customer launches NetSuite SaaS CRM despite holding SAP CRM licenses

Fusion UV Systems launched NetSuite CRM even though it planned an on-premise SAP CRM implementation. The company discusses how things have panned out.

When Fusion UV Systems Inc. decided to implement an SAP ERP system, the intention was to follow it up with SAP CRM. The company purchased the CRM licenses as part of a package deal.

With just 150 employees, Fusion UV didn't have enough manpower to conduct the two projects at one time. But when it went live with its SAP ERP system -- a preconfigured partner product called Fast Track from N2 Consulting LLC, which runs on the SAP R/3 backbone -- in January 2004, there wasn't enough money left to hire the consultants needed to implement CRM, according to Susan Mitchell, marketing manager for the company. The ERP implementation cost the company, which manufactures industrial processing equipment, several million dollars.

Still in need of a CRM system, but with an implementation budget of $20,000, Fusion UV ditched SAP CRM in favor of NetSuite because of its lower cost, ease of use, and quick and easy customization, Mitchell said. Fusion UV has about 50 NetSuite CRM users.

"I think our thought initially was [that we'd do the SAP CRM implementation] in a year or two," she said. "After we saw what was really necessary for the ERP, that wasn't even on the table."

Industry: Manufacturer of industrial processing equipment Company: Fusion UV Systems Inc., headquarters in Gaithersburg, Md.
Problem: Needed to conduct marketing campaigns with CRM software
Solution: Implement NetSuite CRM alongside SAP ERP Challenges: Tough implementation, trouble with support, CRM not integrated with ERP
Positives: Affordable, easy to use, easy to customize without hiring consultants

The number of companies piloting or using Software as a Service (SaaS) products jumped from 18% to 21% in 2008, according to a recent Forrester Research report. It's against that backdrop of growing interest that NetSuite has been trying to court SAP customers -- luring them with discounts that promise to cut their SAP support costs in half. NetSuite offers SaaS CRM, ERP and e-commerce.

Analysts interviewed agree that it's unlikely that SAP ERP customers will rip out their SAP deployments in favor of NetSuite and that big ERP vendors like SAP and Oracle aren't likely to lose many customers to SaaS vendors.

But Fusion UV's scenario of running a SaaS application alongside an on-premise ERP, particularly a CRM deployment, is one way SaaS vendors like NetSuite are picking off seats from Tier 1 companies.

Given the budget Mitchell had, SaaS seemed to be her only option for new software, she said. After a search on the Internet, she compiled a list of companies, started to do some phone interviews and sent out RFPs.

SAP's on-demand CRM product was part of Fusion UV's CRM decision process, but it was too expensive, Mitchell said.

Fusion UV settled on NetSuite and completed the CRM implementation in February 2006.

For one, NetSuite is very user-friendly, Mitchell said, and it was very easy for sales representatives to get up to speed on the software.

It's also easily customizable. It's easy to create a new field and even change a business process without hiring a consultant to do the programming, she said. It takes a little less than an hour to do so.

"For me, the big point is I'm able to do my marketing campaigns. I'm able to make a lot of changes and reconfigure," she said. "It's very flexible that way."

Mitchell also likes the way NetSuite decides on what updates to provide to customers. The vendor has an online enhancement request system through which all the users can request the enhancements they'd like to see. That helps NetSuite prioritize what to do in the next release, she said.

Over the two years and more that Fusion UV has subscribed to the software, Mitchell has seen NetSuite win more CRM customers. That has helped put more emphasis on delivering some of the CRM enhancements.

But NetSuite doesn't come without its drawbacks, Mitchell said.

For instance, for the most part, Fusion UV's NetSuite implementation didn't go well, she said. NetSuite outsourced it to a partner, and that partner outsourced the data migration, and the data wasn't pulled in correctly.

Also, the lack of integration between NetSuite's SaaS CRM and their SAP ERP system presents its own problems. They use NetSuite just to the point of a sales representative requesting a quote -- but the actual quote is done in SAP.

"It causes a lot of double entry for our sales support group," she said. "I really wish that they were integrated."

For more on SaaS CRM
Read more about SAP's CRM strategy

Read why SaaS CRM services are in greater demand

Fusion UV has also had problems with NetSuite customer support. While response time has improved dramatically -- she's gone from sitting on the phone for 45 minutes to virtually no time at all -- the issue now is that the support staff often don't understand the problem, she said.

Mitchell said she now turns to the online user group, where other NetSuite users often provide quicker and better input because they've typically experienced the problem before in the context of their own businesses.

But overall, Mitchell said, Fusion UV is satisfied with NetSuite.

"I think it's a very good value," she said. "No software is going to be perfect. Everybody's business is a little different."

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