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Nucleus refers NetSuite Cloud solution

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15th Apr 2011
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Cloud-based e-commerce solutions from firms such as NetSuite can slash the costs of integration with standalone accounting packages, according to a new study by Nucleus Research.

Nucleus notes that companies wanting to build an e-commerce presence typically have two choices:

  1. a significant investment in software, hardware, integration, and support resources
  2. building a website and manually processing orders and making accounting and inventory updates

This latter option is not scalable.

The analysis concluded that there was a twin benefit to be derived from NetSuite's Cloud solution:

“Retailers automate previously-manual processes and grow without adding staff. Customers found NetSuite helped them to gain better visibility into their operations and improve customer service.”

Customers signing up for NetSuite did so for two main reasons, according to Nucleus:

“Cloud Computing's economies of scale provide functionality and capabilities they needed to be competitive at a much lower price than traditional on-premise applications.

“Integration. Companies using different applications for their Web sites, credit card processing, accounting, inventory management, and shipping no longer spend time manually re-entering information into applications or supporting point-to-point integrations between applications.”

There is also a cost consideration here:

“NetSuite customers that considered buying standalone applications estimated that the cost of integrating an accounting package with an e-commerce application would be at least $50,000.”

Nucleus analysts also estimated that e-commerce vendors using NetSuite will see a business user productivity increase of an average of 20% through reduced time searching for information and building and verifying reports as well as having all the data in one system of record.

With NetSuite’s back-end accounting system tightly integrated with its e- commerce engine, manual data entry and reconciliation can be reduced as can inaccuracies, while accountant productivity is increased: “Nucleus estimates companies moving from standalone accounting and e-commerce systems to NetSuite can reduce time devoted to accounting by at least 50%.”

There are also customer service implications with customer services reps reporting a 20% increase in productivity which means they can provide “customers with faster, more accurate responses to inquiries because they have better visibility into information. Additionally, providing customers with self- service access to order information can enable them to track their orders and returns while reducing customer-service-related phone traffic.”

Nucleus concludes: “By taking advantage of the NetSuite Cloud to support both ongoing upgrades and enhancements and greater capacity during peak times...integration and the economies of scale of the Cloud enabled NetSuite e-commerce customers to increase sales while being more efficient and professional in their transactions with web consumers and partners.”

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