Anchor Group Podcast, Ep. 1
Listen on Spotify: Anchor Group Podcast, Episode 1: What is ERP, and When Do You Need It?
Podcast Episode Transcript
Caleb [00:00] :
Welcome, Michael. This is our first podcast. We still have yet to find a name for this podcast, but that's okay. We'll, we'll kind of vet through that. I was on a separate team's channel. We were thinking of some pretty funny ideas, but we'll see what it ends up being at the end. Probably something more formal.
We'll see if we can find something a little playful, but I know that what we're really wanting to do is just cover all of the expertise that we've gained here at Anchor Group. So really covering ERP as well as ecommerce as a whole, and more specifically, NetSuite as an ERP, SuiteCommerce, or even BigCommerce and other e-commerce solutions.
And between the roughly 50 employees and so much knowledge that has been gained over the years, we figured that it's probably time to start just giving a lot of that knowledge away on these conversations. So, it'll be nice because we've got both, you know, myself, who's a little bit cross-functional across many areas, and you're really focused on e-commerce, and you don't have as much knowledge on the ERP.
I know that we're thinking today because you have less knowledge on the ERP in comparison to our ERP team, it might be good just to start on that topic to just introduce people in general to NetSuite as an ERP and ERP in general because it can be complicated for people who've never been in the space to wrap their head around.
Michael [02:00] :
And I think Caleb, even before we dive into ERP, let's just start about software in general because, you mentioned here at Anchor Group, we do have, just years of experience, a lot of knowledge between our team. So my first question for you, in a sense, is, what is the importance of software within a business?
Maybe as we think like a B2B manufacturing business. Why is software going to be so important for that business?
Caleb [03:00] :
I love the B2B manufacturing space. Actually, that's where I started first was in the manufacturing space. I started in ERP right there and I've grown to really love the B2B space, especially around wholesale distribution and manufacturing. My very first role was to do an ERP implementation, and learned a lot from just that as, like an end user going through it.
Sometimes, I'm embarrassed by how little I knew back then and compared to now, but my perspective has changed on how powerful the ERP can be for these businesses and software in general. I was speaking with some other team members about just the value that software can provide to our clients. Helping them to be able to see the value in and what I can do it, and many, many people do already see it. But the way I see it is one of the most expensive things to running a business is time — consuming people's time, and That's what software is supposed to do is to speed up your efficiency. To be able to do things at a greater scale than that you weren't able to do before.
And no matter if you're an entry-level employee or an executive, no matter what, time is very expensive, even on the entry-level side. So, being able to leverage software to reduce the amount of time it takes to do tasks is pretty much everything. And companies that are not adopting software faster are really faster and faster falling behind. That's really what it comes down to is just efficiency.
Michael [04:00] :
Now, Caleb, in your experience, what are some things you've seen in your time with companies gaining efficiencies through using software? What are some examples of what that has looked like for you?
Caleb:
Let's start on the sales side because that's where a lot of the processes start for most companies is you got to have the sales to be able to fulfill orders or fulfill the product or service on the sales side. If you're taking a lot of phone call orders, if you're taking email orders, especially in that B2B side, that consumes time.
And I would argue that most of the time, those orders don't have to go through a phone, don't have to go through an email. It becomes more change management by the customer as well as the sales rep. And the sales rep leads that charge and helps coach a different generation of customers to use e-commerce more.
So, I find that e-commerce by itself helps with that. But there's also some other automations; part of the process for a lot of B2B is that they're receiving purchase orders from their customers. And then they've got to enter those as sales orders into their system and their sales order automation. There's several good options that I'll often refer clients to that will, extract that purchase order that exists in a PDF through an email and get it onto a sales order.
Otherwise, what's happening is sales reps are getting this email, looking at it, opening up their order management system - in our case, we're often using NetSuite - and they're just typing in all that data manually. And some of these orders are pretty quick, but some of them might take 20, 30 minutes and that really quickly eats at your margins.
And I guarantee you, even if you're charging a per transaction fee, I guarantee you that the time, that 30 minutes, 20 minutes, 10 minutes is probably way more expensive than being able to just have an automation. Those are a couple of examples off the top of my head.
And then the same thing happens on the vendor side. You're, you're sending someone a purchase order and they're sending an acknowledgment automation through EDI, just fields that you have to enter that drive everything that maybe you can populate from and source from other data. It's endless.
Michael [07:00]:
Yeah. It's, it sounds endless. And especially if you look at just the headcount within a company, essentially, right? Software is going to help you be more efficient and you can potentially reduce headcount or restructure the headcount that you currently have at your business.
And software also, it's always going to be on for you, right? 24/7. And, so, your customers, right? If we think about the world of e-commerce, your customers can always place orders. They don't need to have somebody else on the other end of the phone. Now, thinking about specifically ERP software, can you explain what ERP software is and how does it fit into the overall landscape of software that businesses need?
Caleb:
Yeah, because not everybody may know the acronym. It's Enterprise Resource Planning. It is a catch-all term to say basically the software that runs the entire brain of your business. From end to end, from the point of a sales order to receiving cash, procurement, paying vendors, accounting, everything.
So it's, really, the software that runs every piece of your business, warehouses, inventory management, work orders, and assemblies, everything.
Michael [08:00]:
I like how you say the brain of your business. I like how that paints a picture of how critical the software is for, for many businesses.
But Caleb, at what point does a business need to really start considering an ERP software system? How big does this business need to be in order for that to happen?
Caleb [09:00]:
It needs to be on the radar. As soon as you're making half a million in sales, you should start learning about it. Many people starting businesses have so much to think through that they’re not even considering it yet.
That’s understandable. You have to make business decisions early on and decide where to focus your mental energy. But if you can think far enough ahead, knowing from day one that you’ll need it and understanding what ERPs do and when to introduce them, you’ll be better prepared.
Although you could implement one before $5 million in annual revenue, for most businesses, ERPs don’t make much sense at that stage. They’re the next step when you're evolving as a business. QuickBooks is no longer sufficient for accounting, and you’re likely using disparate systems—multiple platforms that aren’t connected, requiring manual data entry. Moving to an integrated, all-in-one system or a well-integrated solution is costly, and it's hard for businesses under $5 million in revenue to justify the investment.
Even in the $5–10 million range, it’s still a challenge. It starts getting easier in the $10–20 million range, but delaying it means missing out on automation opportunities, which can ultimately slow down growth.
Michael [10:00]:
And when we think about growth, the analogy that comes to mind is, in a sense, what comes first—the chicken or the egg? Companies need their employees to have time in order to scale, and at some point, an ERP can win back specific employees' time so they can focus on different tasks to grow the business.
I think that's an important consideration for companies thinking about making the jump to a legitimate ERP. It's something they need to keep in mind because it will win back time for their employees—and for themselves, quite honestly.
Caleb [11:00]:
Over time, the hard business decision is acknowledging that a proper ERP implementation does consume your time. You can't hand off everything to a consultant—it requires internal resources, which takes them away from other tasks as well. I'd say an ERP implementation is something to think about at least a year out. Sometimes, businesses aren’t in a position to think more than three to six months ahead because they’re in a critical situation. When that happens, there’s some scrambling. But when you can plan properly, at least 12 months ahead, an ERP always makes sense if you don't have one and you're in that revenue range with stable cash flow—assuming you're managing the business well.
It’s true, though—it’s the chicken or the egg dilemma. Many companies don’t have the financial modeling or the system integrity to make good business decisions until they have an ERP that’s not just live but also stable. There’s always a period of stabilization after go-live.
Michael [12:00]:
So with that idea of stability—and you mentioned the role of consultants earlier—talk to me about that. We know a successful ERP needs to be stable, and that’s really where you’re going to get the most value from it. But how is a consultant going to help a merchant who’s implementing an ERP for the first time?
What roles does that consultant have?
Caleb:
Yeah, I think it’s equally important to know what consultants aren’t going to do or what you shouldn’t always rely on them for. Your full-time employees are going to know your business inside and out—how you do things today. Consultants will help you see how the ERP can accomplish your objectives.
They perform that gap analysis: How do you do things today, and how can we get your processes to work within the ERP natively as much as possible? Then, they provide an estimated level of effort for any customizations. Customizations aren’t always a bad thing—they mean you’re doing something unique in your industry compared to others. The native way is what everyone else is doing, so in some cases, customizations make sense.
Consultants help take your processes and either guide you on how to adjust them or educate you on how NetSuite handles them. They’ll explain, If you decide to do things the way you do today, here are the downstream implications you might face, based on their experience. But ultimately, it’s up to the customer to make business decisions throughout the process. They also need to take responsibility and accountability if they decide not to adapt to the native functionality. That’s a business decision—and sometimes it makes sense, but other times, you’ll have to change.
So, one thing to keep in mind is not expecting consultants to know every detail of your business. They’re more of a coach than someone who’s fully hands-on. Yes, they’ll handle a lot of the configuration work, but the brain of your business is complex. I’ve had people tell me, “We’re pretty normal.” But every time someone says that they’re totally underestimating how many processes exist in their business.
Michael:
Yeah, everything feels normal to the person, it's normal too, right?
Caleb:
Yeah, when the processes are stable and you don't have to think about them. Yeah. Of course, they're normal.
Michael [15:00]:
So, I guess what I hear you saying is that a consultant acts like a coach who’s played the game before. I’m into sports, and when we think about the analogy of football, some of the best coaches have been the ones who actually played the game. In a sense, it sounds like that’s what you’re saying about consultants—they’ve helped other merchants set up ERPs before, and they can help you understand both the functionality and limitations of an ERP and even challenge the idea of those limitations.
You mentioned native versus custom features. For someone just starting to explore what an ERP really is, talk to us—what are some of the native functions that ERPs have, and what might need to be custom-built?
Caleb [16:00]:
Well, it’s definitely going to vary from software to software, but I’m most knowledgeable about NetSuite as an ERP. I’ve had some exposure to SAP and others, but NetSuite is where I have the most expertise. So, I’ll speak to some of NetSuite’s native functionalities to give you a sense of the territory that ERP covers.
First, there’s a full CRM—Customer Relationship Management—where your sales reps can track communications. Since a customer is tied to many things, like sales orders, having a CRM as part of the ERP is essential. Then there’s order management, which covers everything from creating a sales order and capturing transactions, like a cash sale, to fulfillment processes like pick, pack, and ship. It also handles sending invoices, receiving payments, and automating invoices, including follow-ups like dunning. That entire process is known as order to cash.
On the procure-to-pay side, you’ve got the creation of purchase orders. When you create a purchase order, you’re telling a vendor you need to purchase products from them. They, in turn, create a sales order in their system to fulfill your request. When the product arrives, you record an item receipt, meaning you’ve received the inventory, and it’s now on your books. That inventory exists in your general ledger. What’s powerful about NetSuite is that much of this happens automatically—when your inventory increases, your accounting, and general ledger are updated through that transaction.
There are additional features like purchase requisition, which allows you to request a purchase before it reaches the purchase order stage. Then, of course, you have paying the vendor, receiving an invoice, and processing that payment. So, you’ve got both sides of those processes covered.
The last thing I described—procure to pay—flows into the accounting functionality. NetSuite allows you to close your books and handle all of your accounting with robust reporting and customization capabilities. This makes it very powerful, but it also means you need stability in how your transactions and data flow. Everything needs to be set up correctly, or your books can get messy. It usually takes some fine-tuning in the first few months after go-live for companies to feel like their books are stable.
Lastly, there’s inventory management, warehouse management, demand planning, and manufacturing processes—tracking work orders, assemblies, and the build process on the shop floor.
Michael:
That's a lot of native features.
Caleb [19:00]:
There's still several dozen other things, but that gets you the gist of things.
Michael:
I mean, the brain of a company isn’t going to be small—nor should it be. It’s going to be large, robust, and capable of handling a lot of native functions. But let’s talk about some of these customizations.
How can you take those native functions and extend them to meet the unique needs of a merchant’s specific situation?
Caleb:
Well, NetSuite has a workflow engine, and on top of that, there’s something called SuiteScript, which is its coding language. It’s a JavaScript-based language that allows you to script automations.
Workflows are great up to a certain point, but when something isn’t possible within the workflow engine, you can always accomplish it through scripting. It’s very common to tap into that functionality, and there’s a lot of support across the entire NetSuite ecosystem for both workflows and scripts.
It’s easy to find people—including us—who can help with those types of tasks.
Michael: [20:00]
Caleb, give us your most exciting example. Like, when was a unique situation that you and your team was legitimately excited to work on and built out some cool functionality for a merchant?
Caleb:
Recently, one of the customizations we did was the sales order automation I alluded to earlier. We took an email coming into NetSuite and set it up so that the customer could create a forwarding rule. When they received a purchase order from their customer, it would automatically forward to a designated NetSuite email.
There are two ways that data can exist in an email: either in the body of the email or as an attachment. In this case, all the purchase order information was in the body of the email. What we did was extract that text since it was coming in consistently.
This client was receiving hundreds of these orders per day from a single customer, and they needed to create sales orders and fulfill them quickly because they were in the food industry. They had to get orders delivered the next day to maintain freshness.
We applied techniques to extract the relevant information from the email body and parse it. For example, parsing takes the text and breaks it down—like taking the word “the” and parsing it into T-H-E. In this case, the email body contained details like the item SKU and the quantity being ordered. We extracted that information, created a sales order, inserted each line item, and processed it.
It was a unique scenario. In other cases, you could leverage EDI, but this particular customer’s client wasn’t sophisticated enough to support EDI or simply didn’t allow it. So, we had to think outside the box, identify the pain point, and find a solution.
We provided an estimated level of effort to determine whether solving this pain point was worthwhile—and in this case, it certainly was. It saved hours and hours of work every day.
Michael [23:00]:
And so it sounds like there's an example of where when you're optimizing your software for your needs, there's a way that you can alleviate that pain and save your time, save your team time.
Caleb:
I'm going to make a bold statement.
Michael:
Yeah, let's hear it.
Caleb:
As far as I know, we've never not been able to solve something.
Michael:
Yeah, because that was going to be a follow-up question. I'm like, okay, so you work with NetSuite. How far can you actually extend the limits of NetSuite?
Caleb:
Like, crazy far.
I think there are definitely discussions to be had where you’d say, Well, the ROI might not make sense. In some cases, it’s more of a budget question. That’s really what it comes down to—a discussion on budget and then prioritizing that expense at that specific moment in time.
I like to walk through our managed services onboarding flow, and part of that process is identifying various pain points and prioritizing which ones to tackle first. Then we just go through and start knocking them out.
Michael [24:00]:
Question for you. At this point, it sounds like the ERP is focused on the operational side of the business.
Now, being here at Anchor Group, I’m more on the e-commerce side of things. So I’m thinking about the front end—what customers interact with, how a company captures sales, and how they engage an audience through their website.
So, talk to us: what’s the relationship between an ERP, specifically NetSuite, and an e-commerce store?
Caleb:
Well, the ERP is the back office. The customer is never going to be logged into the ERP—it’s the software running the business behind the scenes. That’s how you can think about it. E-commerce, on the other hand, is your digital storefront. It’s how you allow customers to walk around, explore, shop, and learn about your business, even if you’re not in the traditional retail space.
E-commerce is more marketing-focused. It ties into sales, of course, but it’s definitely more front-end and marketing-driven, while the ERP handles everything in the back office from the point an order is created.
I also think about e-commerce differently than most people because we work heavily in the B2B e-commerce space in addition to B2C. In B2B, e-commerce can often be relabeled as a customer portal. In some cases, a customer portal is the same as traditional e-commerce, but in other cases, it means giving customers access to more data through their My Account section—data that’s being surfaced directly from the ERP.
This is why I like platforms like BigCommerce and SuiteCommerce. I love analyzing customer support calls to see the common issues people are asking about—because most of the time, the customer support rep is just looking into the ERP to figure out what happened with an order or how to support the customer. Many of those use cases can be solved with a good customer portal.
It could be reordering, processing returns, or surfacing data through saved searches in NetSuite that can be displayed in My Account in SuiteCommerce. It’s all about changing your perspective—e-commerce isn’t just e-commerce anymore. It’s a customer portal, and all the data driving it comes from the ERP.
Michael [27:00]:
Yeah, I think it’s important to recognize that all the information is in the ERP, but it’s surfaced through the e-commerce platform. If you have more of a marketing mindset, you might truly think of it as an e-commerce website. If you're more on the sales side, you might think of it as a customer portal.
I see what you’re saying. Ultimately, it comes down to semantics—whether we’re calling it a customer portal or an e-commerce website. Regardless, customers are logging in, finding the information they need about your products, and purchasing them through that platform.
One thing that’s important to note is that the relationship between the two is critical. The ERP is the brain of your company, and you need it to connect seamlessly with your front end—whether that’s a customer portal or an e-commerce website. Within the world of NetSuite and ERPs in general, there are integrations you can use to connect the two. You can literally say, Hey ERP, I need you to take this data point—for example, some piece of product data—and carry it over via the integration into the e-commerce storefront.
When I speak with people, this piece often gets swept under the rug or pushed to the back burner. But it’s something you need to keep in mind when considering an ERP system or an ecommerce system because, ultimately, the two need to marry together really well.
Caleb [28:00]:
Yeah, integrations are really critical to any business because there will always be systems you don’t want to customize. There are point solutions out there that provide a lot of value to businesses by solving very specific problems in a high-quality manner. In those cases, it makes a lot of sense to integrate those solutions rather than trying to replace or modify them.
Michael:
Yeah, it’s so important—it’s critical. I guess one last question I think is important to get your perspective on, Caleb, is this: You’ve mentioned your experience with NetSuite and Anchor Group’s expertise in it. So, what type of merchants does NetSuite work really well for?
If someone is exploring their options, how do they know if NetSuite is the right fit for them?
Caleb [00:29:00]:
Well, NetSuite is the oldest cloud-based ERP, founded in the late '90s. With that history, it’s evolved into one of the most mature cloud-based ERPs out there, specifically designed for the mid-market space. That maturity means they’ve developed solutions, native functionalities, and modules tailored for virtually every vertical.
There are different sets of modules designed for specific industries. For example, if you’re a software company that sells subscriptions, you’ll need modules focused on revenue recognition rules and subscription management—something like SuiteBilling. There are also third-party subscription solutions available in the marketplace.
In the wholesale distribution space, you’ll find modules focused on product management, advanced inventory management, and demand planning. If you’re a manufacturing company, NetSuite offers features like WIP (work in progress), routing, work orders, and assemblies to support your processes.
NetSuite covers a wide range of verticals—retail, high-tech, general business, and more. They create different editions of their product offerings, pairing modules together based on the specific needs of each industry.
So, hopefully, that gives a clear idea of how NetSuite fits different types of businesses.
Michael:
Yeah, Caleb, when you sign up for NetSuite and start working with them, do they pick out those different modules specifically for you? Or, say you’re a B2C retailer selling apparel, will they already have a preset group of modules where you can say, Hey, here’s my company, here’s what we do, and they’ve got something pre-packaged?
Or are you working with their team to build out the specific functionality you need?
Caleb:
Yeah, oftentimes, when clients come to us, they’re looking to get a demo of NetSuite. They’ll reach out, and we’ll start by understanding their business a bit, giving them a lay of the land. We’ll provide a heads-up on what the sales cycle looks like and what the next steps are. Then, we’ll walk through the demos with them to help scope out the project. At the same time, we’re gathering requirements—they’ll explain their business, and we’ll explain how NetSuite can solve their specific challenges.
Whenever I say, Yeah, we can solve that with NetSuite, and it involves a particular module, I make a note of it. So, when we present the final pricing and solution recommendation, I’ve already selected the right editions and add-on modules, mapping them out on their behalf.
It would be really difficult to self-shop for the right number of modules and sift through them all on your own. Earlier, when you asked me to explain ERP as a whole, I only scratched the surface—and even that was a lot. Now, imagine trying to sift through dozens of modules by yourself—that’d be really tough.
That’s why we exist in the sales cycle—not only to scope the implementation but also to make sure clients select the right modules for their needs.
Michael [33:00]:
Amazing. Yeah. Well, thank you, Caleb, for sharing your knowledge and understanding of ERP systems, why they are important for businesses and also specifically about NetSuite.
That's some interesting stuff. And I'm sure some people out there are going to benefit from that knowledge.
Caleb:
Yeah, this was a first. Since it’s our first podcast, it was fun to go back and forth, starting from a foundational level. I anticipate we’ll dive much deeper into e-commerce strategies—B2B, B2C—and ERP as a whole because there’s just so much to learn.
The more I learn, the more I realize how much I don’t know. It’s a journey, and I fully expect to spend my whole career learning about ERP. There’s just so much information to slowly accumulate. This podcast is really just me brain-dumping wherever possible and interviewing others who know more about specific areas of NetSuite so we can share that knowledge across the ecosystem and help people expedite their own learning.
Michael:
That's right.
Caleb:
Great. Well, we'll see you on the next one, Michael!
Oracle NetSuite Alliance Partner, BigCommerce Certified Partner
As both a BigCommerce Certified Partner and an Oracle NetSuite Alliance Partner, Anchor Group is ready to handle BigCommerce and NetSuite projects alike! Whether you already have one platform and are looking to integrate the other, are considering a full-scale implementation of both platforms, or simply need support with ongoing customizations, our team is ready to help answer any questions you might have! Get in touch!
