News today that NetSuite and Informatica are partnering in an effort to provide what they’re calling a “two teir approach” to delivering subsidiary ERP solutions for large businesses. A tacit acceptance of the fact that for these largest of businesses at least, an on-premise ERP solution will, for the foreseeable future, be the solution of choice, the companies say that;
Combining Informatica’s world-class enterprise data integration with NetSuite’s leading cloud ERP suites, global companies can extend and enhance their on-premise enterprise systems with cloud-based ERP solutions for their regional subsidiaries and divisions. Informatica’s Cloud integrates data processed by NetSuite OneWorld at the division or department level with on-premise systems, such as SAP R/3 and Oracle Applications at the enterprise level. This new solution is particularly well suited for multinational companies with multiple subsidiaries operating across diverse markets, and offering products and services through many different channels.
NetSuite is pushing the flexibility of this approach, talking about the real-time visibility, local flexibility and cost savings to be gained by using a cloud solution at the subsidiary level. All arguments that SAP was sure to begin making as it rolls out ByD beyond the initial handful of launch companies in which it is available.
In terms of functional breadth, this integration enables the exchange of transactional and master data from NetSuite, including invoices, purchase orders, item fulfillments (shipments), journal entries, inventory adjustments, time entries and expense reports, and customer, employee, product and accounting structure information.
What it all means
As I have said previously – on-premise ERP will remain in large organizations for the foreseeable future – this integration achieves two strategic aims for NetSuite;
- It is a strategic pre-emptive strike at the heart of SAPs go to market for ByD
- It opens up an entire new pipeline of subsidiary businesses
SAP will, of course, attempt to rely on the power they have as an existing provider to these large organizations, so at the heart of the matter here we have a tacit acceptance by NetSuite that, despite being the more mature player in the market, they need to be thinking early about answers to SAP’s “One vendor, one approach” story. This integration is part of hat answer.