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SaaS ERP case study: Asahi Kasei division rips out SAP, deploys NetSuite

Asahi Kasei Spandex America, a wholly owned U.S. operation of the Japanese chemical company Asahi Kasei, ripped out SAP R/3 in favor of NetSuite.

Industry: Manufacturing

Company: Asahi Kasei Spandex America. Based in Charleston, S.C., it is a wholly owned U.S. operation of the $20 billion Japanese chemical company Asahi Kasei. Asahi Kasei Spandex America has 180 employees. It is a division of Asahi Kasei Fibers.

Problem: In 2004, CFO David Stover helped install the SAP R/3 system that the company used for more than three years. His company used SAP because its former parent company was an SAP customer.

The SAP system worked well. The trouble was, it was complicated. Asahi Kasei Spandex America had a separate, homegrown inventory system that acted as the "mother" of its data. Integration between SAP and the inventory system was too difficult.

"What you had with an SAP, it didn't like anything else to be the mother," Stover said. "It did work. It was just an expensive proposition to make it work."

It would take almost a year and a half for one of the financial people to get enough integrated into the system for comfort, he said. When an employee left, it took time for his replacement to be productive on the system. If the company needed a special report, IT had to hire a consultant.

The company was taken over by Asahi Kasei in 2006 and decided to look for another system.

Solution: Asahi Kasei Spandex America decided to rip out the SAP R/3 system and deploy NetSuite.

Implementation timeframe: Asahi Kasei Spandex went live with NetSuite in 2007.

Stover and his controllers completed most of the configuration themselves.

"The best thing about it is it's easily done," he said. "It's literally as easy as mapping data."

Benefits: Whereas with SAP the company had to pass a whole lot of data, NetSuite is more than happy to receive data and give data as needed. NetSuite is very simple for the users: It has basically three transactions -- selling, buying or inventorying something.

Also, it's cheaper, Stover said. A year of NetSuite is equivalent to what they were spending on a month of SAP.

NetSuite has all the big stuff right, he said. When he walks into work in the morning, 25 reports, generated automatically overnight, are waiting for him. But it's the smaller stuff that concerns him.

Challenges: Stover is concerned about NetSuite's technical expertise.

For example, the NetSuite process for invoices is to store them by vendor in folders. Most manufacturing companies prefer to store them by invoice number, which would be better for storage and tax purposes because it catalogs the invoices by date. It's something Asahi Kasei had to change in the NetSuite system.

And since he bought NetSuite, Stover has had four account managers, none of whom had strong knowledge about a manufacturing facility.

"I don't know that they're that thick in terms of technical expertise," he said. "We've had to go through and explain different processes to people who haven't really worked with them."

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