124996 Resource 102363 102466 102466 1146095935454 1146622047764 Controlled NetSuite for Geniuses, Chapter 1: The Value Proposition

Introduction: The Network Is The Business

I was recently reminded of a conversation that I had with the owner of a large local firm during an ERP/CRM implementation several years ago. His company hauls slag out of blast furnaces, mines gravel, manufactures asphalt and concrete and does some road building for good measure. That's what they do, the owner pointed out. But what are they? He was quick to reply that his company is a Capital Asset Management company. I was surprised, too. But he had a point and in time I started to realize how great a point he had. Everything they did and every decision they made, strategic and tactical, was about the effective use and management of their physical assets, from real estate to the incredibly expensive machines required to move pots of molten slag from a furnace. The only way to run the business profitably was to manage these assets for maximum return.Now consider a start-up company determined to sell a laboratory instrument. What do they do? Well, having purchased the rights to new technology from a research university, they now work on forming a company that brings the technology to market. The design is outsourced to a team formed by the technology originator. When they finish the prototype the company contracts the manufacturing and distribution of both the product and related materials. They outsource the software engineering that makes the product run. They then turn their full time focus to sales and marketing.  Ok, that's what they do. But what are they? Like the industrial company in the example above, the answer might surprise you: They are a Network Management company, focused on sales and marketing of their product line. They manage the network of activity around the product including sales and service to customers, contracts with multiple vendors and manufacturers, the design team, distributors, etc.. They are really neither a product company nor a service company in the strict sense of those terms. They are part of the new design economy in which firms bring to market new products, new product designs, and new distribution and manufacturing alliances; above all they are collaborationist.Like the Capital Asset Management company, the Network Management company's only path to profitability is to manage the network that is their extended business. As I have argued elsewhere, <a href="http://sightlog.sightlinesconsulting.com/#117801">the network is the business</a> for this company. And therein lies NetSuite's value proposition. For a company that wants to manage extensive relationships with manufacturers, distributors, other vendors, selling partners or dealers, and, most importantly, with a large contingent of customers, NetSuite is the perfect fit. NetSuite's native Internet presence enables its users to collaborate hand in hand with a complete universe of other businesses and their customers, from order management through fulfillment and billing, and to work electronically and seamlessly. Now the skeptic stops here and says "Wait a minute, you're not describing anything new. All companies have to manage relationships with vendors and customers. What's so special about the Network Company, and what's so special about NetSuite?" Good question. The skeptic is right to some extent but think about how much effort is involved to manage a relationship with a contract manufacturer when you don't really understand the sales pipeline, meaning they don't understand the pipeline at all. Think about the efficiencies you can create when you and your network partners - manufacturers, distributors and other vendors - with a simple sign-on to NetSuite, can both view the same appropriate subset of data without having to email reports or spreadsheets back and forth. How about the customer being able to pay or re-order, pick up new literature, log an issue, all from the Internet? Giving the customer a level of control in their experience is fast becoming a requirement for many businesses, and it has long been a requirement for most buyers.There are other companies outside of the Network Management company example who will still find plenty of good buying points in NetSuite, like the huge decrease in IT spend, or business continuity in the face of local disaster, but I have highlighted the Network Management example to put the reader in the right frame of mind for subsequent posts in this series. And after all, in today's economy all companies are trying to move closer to their networks. 10 application/xml false business organization netsuite network management network organization outsource manufacturing and distribution Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.0; T312461; YPC 3.0.1; (R1 1.5); .NET CLR 1.1.4322) 127.0.0.1 127.0.0.1 tfoydel false true false false true 205861 false false true false false false true 102363 blog blogsite/SightLines/web