Unlocking Supply Chain Efficiency: Vertical Communications’ Transition to NetSuite’s Cloud Solution

Yet the legacy ERP systems in place at many telecom equipment manufacturers and distributors present an obstacle to flexibility. Outdated software is notoriously difficult to customize, requiring teams of developers weeks if not months to implement a business process change. Flexibility is further hindered by disparate applications, so that modifying one system can unleash disruptions across others.

Vertical Communications, a provider of unified communications and IP telephony solutions and services to businesses across North America and Europe, has broken the chains of its legacy ERP environment to drive new efficiency across end-to-end supply chain processes, from sourcing components and managing contract manufacturers to customer fulfillment and support.

The company, based in Santa Clara, Calif., with more than 250 channel partners and over 1,000 dealers, faced worsening problems with ERP inflexibility and data silos with strong business growth, led by its flagship Wave IP product. The company also markets its MBX and SBX IP telephony systems and a lineup of digital and VoIP phones, backed by service and support for customers in retail, healthcare, government and other customer-facing verticals.

An on-premise Sage MAS 200 ERP application forced Vertical Communications to run its business within the constraints of the Sage software, rather than adapting the software to its business needs, while struggling with inconsistencies in inventory management data. Atop that, a separate Oracle Siebel CRM system left Vertical with two data silos of ERP and CRM information, meaning inordinate manual work and the risk of contradictory data that could impact customer satisfaction.

“Managing customer data in both accounting and CRM systems was quite challenging,” said Ryan Smith, Director of IT. “Someone simply changing an address in one system could cause problems, so keeping data replicated and synchronized was difficult to manage.”

Unified Cloud Platform

Ready to make a change, Vertical Communications sized up in-house SAP, Oracle and Microsoft Dynamics GP applications. After a thorough evaluation, it selected NetSuite’s integrated cloud solution for ERP and CRM, which would eliminate its previous problems with Sage/Siebel data silos and provide the flexibility that was sorely lacking in the Sage MAS 200 application.

“One big reason for going with NetSuite was the platform’s capabilities to be customized,” said Smith. “It wasn’t so much what was in NetSuite that sold us—it was that we could customize the system in ways that we couldn’t with any other platform. NetSuite provides a very robust platform to build the business processes we needed.”

Going live on NetSuite in July 2012, Vertical Communications has significantly streamlined its supply chain processes in large part by taking advantage of NetSuite’s inherent customizability. With NetSuite’s cloud solution supporting materials requirements planning (MRP), inventory management, purchase orders, shipping, global financials, CRM and customer support, the company has gained new supply chain efficiency and greater agility to compete in global markets.

A key customization was creation of MRP reporting directly in NetSuite for the purchasing department. With it, Vertical Communications can better forecast demand by multiple variables and coordinate sourcing and production, minimizing the risk of costly overstock while helping ensure adequate supply.

“Its allows purchasing to use all sales history and current purchase orders for forecasting that’s concise, quick and works very well,” Smith said. “Having all those numbers available to refine and drill into for answers has been valuable.”

Better Accuracy

In inventory management, Vertical Communications has dramatically reduced mismatches between recorded and actual inventory at its warehouse in Phoenix, Ariz., storing over 1,300 SKUs. Previously, Vertical’s attempt to run a custom-built mobile scanning system along with its Sage ERP application generated inventory contradictions that were very time-consuming for IT to solve.

Since implementing NetSuite, the incidence of inventory mismatches plummeted from one a week to one or two a year. “We’ve had a huge reduction in the number of IT-related calls on why the ERP system doesn’t match what’s in our warehouse,” Smith said. “Those problems were not easy to solve. It took a lot of man-hours.”

Vertical Communications has also improved accuracy with a portal that enables more than 20 contract manufacturers to allocate serial numbers to products while they are being built. With that data recorded in NetSuite, Vertical Communication can readily assign product numbers to equipment, and validate both serial and product numbers in a given sales order.

On the customer support side, Vertical Communications now provides personnel with a unified view of all interactions and case management workflow, with information on issues shared to product management to help guide product development. The company integrated its Wave telephony solution with NetSuite to better route calls, while building on NetSuite a new cloud-based service called CRMLink, now commercially available, that incorporates call records into CRM and ERP solutions.

Vertical Communications also gained new global flexibility in using the NetSuite OneWorld solution to manage a German subsidiary and transact in about four currencies, including the Euro and British pound, while the finance team reduced its monthly close time from a month to about a week.

“NetSuite allows us to customize processes related to supply chain, purchasing, finance and customers and bring them together in one solution, which helps better manage complexity,” Smith said. “Our visibility to track and see things increased, and customers get products in a more timely manner.”