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Cold medicine maker chooses cloud ERP over legacy system upgrade

Despite a bumpy implementation, one CFO said cloud ERP software from NetSuite has helped shorten the financial close and boosted data visibility.

Cold medicine Zicam has long been a remedy for those feeling under the weather, but when the product's maker, Bridgewater, N.J.-based Matrixx Initiatives, was faced with upgrading the company's outdated JD Edwards (JDE) enterprise resource planning system (ERP), business leaders sought a remedy of their own. Despite a bumpy implementation, the company ultimately found one with cloud ERP vendor NetSuite.

Although Matrixx had to contend with personnel and data upload snags during the installation, Sam Kamdar, chief financial officer and chief operating officer, said they were minor problems in the grand scheme. "I would really be cautious around the implementation, but you go through that once," he said. "Of the product ongoing, I'm a fan."

Benefits of the cloud ERP system that Kamdar attested to included its ease of use and greater data visibility, but he admitted that he was initially hesitant about cloud financials.

Cloud ERP optimizes financial consolidation

Matrixx was acquired by H.I.G. Capital in early 2011, and Kamdar joined the company shortly after. Post-acquisition, Kamdar said company leaders contemplated upgrading the organization's JD Edwards system, but decided to consider other options -- Microsoft Dynamics Great Plains, Sage ACCPAC and NetSuite -- after assessing the cost. Kamdar, Matrixx's controller, a consultant and the finance organization from the previous administration comprised the decision team that selected NetSuite for the "small but mighty" company.

Kamdar said the idea of using a cloud ERP system initially gave him pause due to security fears and worries about data retention. While his security concerns were mollified by the consultant involved in the decision process, he eventually came to terms with the latter issue -- to him, the more pressing one -- as well. "[For] almost everything I load, I have the source data to begin with, so if the vendor were to go away, I don't lose the information I've loaded," he explained.

Since going live with NetSuite in April 2012, Kamdar said the monthly financial consolidation process has been significantly enhanced and shortened, which he attributed in part to increased data visibility. "It's not only that we close the books earlier, but also the level of data [makes] it easier to look at it analytically -- I could easily say our total marketing expense was X dollars; let me drill down and see why," he said. "When we close the books, it's closing with appropriate commentary and an understanding of what happened."

He also commended the cloud ERP system's intuitiveness, differentiating it from the company's previous system by saying users don't "need a PhD in JDE to understand it."

Slow data upload a hurdle in implementation

But getting to the benefits wasn't a simple process. "The implementation took much longer than expected; it was a great deal of frustration for me," Kamdar said.

The first point of contention concerned NetSuite's implementation consultants. Kamdar said NetSuite originally assigned two people to the project, but, in the end, neither saw the implementation the entire way through.

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"When they got [to the] configuration stage, they moved someone else onto the project," Kamdar said. "I went from what I felt was an A team to a B team." Although the vendor assured Kamdar that the new team member was informed of what had previously taken place, Kamdar said he still had to be caught up to speed. If he had to go through the process again, Kamdar said he "would have insisted that we kept the same people."

He also said the company had to deal with slowness during the initial upload of historical data into the system. "It took a lot longer because you're loading everything up onto the cloud, [but] I wanted three years of historical data, so it's not like there were terabytes of data," he said.

He added that the upload was not completed until after the go-live date, which caused additional stress. "I wish they would've come and said, 'Give us all your data; it's going to take two weeks to upload,' not a couple days before we're about to go live saying the data's still not available," he said. "Once we got through it, it was fine, but it was frustrating."

Based on his experience, he relayed some advice for clients preparing for a cloud ERP implementation. "Spend extra time making sure [historical data] goes through," he said. "Once it's up and going, it's a great tool."

Cloud ERP system enables financial analysis

Despite a somewhat rocky start, Kamdar said he has been impressed with NetSuite's level of customer service. Once Kamdar started using the cloud ERP system, he gained a clearer picture of what customized reports he wanted and began bouncing ideas off of NetSuite. Although the vendor hasn't been able to address all of the functions that he has asked for immediately, he said it's satisfying to know that his concerns have been vetted, and sometimes the desired functions are scheduled to be included in an upcoming release. "The customer service in terms of 'I want to do X, Y, Z' -- they were exemplary," he said.

Internally, Kamdar said his team can now spend more time on data analysis, which is a key advantage to him.

"The data's the same, but it allows me to spend my time in a more analytical fashion," he said. "I'd very much rather have the people in my group be analytically oriented than managing the data. Now we have more time to do analysis much faster."

Emma Snider is the associate site editor for SearchFinancialApplications.com. Follow her on Twitter: @emmajs24.

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