Hong Kong based baby products distributor Bloom & Grow Asia was an early cloud ERP user. But when the cloud provider could not keep up with its regional expansion, Peter Deacon, director at Bloom & Grow Asia decided to switch to an on-premise software more than four years ago.
“I can honestly say in hindsight that it was a big mistake for Bloom & Grow!” he said.
Deacon said the company spent hundreds of thousands of dollars to build implement an on-premise ERP project, but it ended with “dreadful data integrity”.
Speaking at a forum organized by CPA Australia, Deacon recalled the reason Bloom & Grow moved away from cloud was because its provider was not able to meet its rapid regional expansion. With more 10 years in the industry, the company has grown rapidly in the past four and now operates across three different time zones, in five languages, handles 10 different currencies, manages five warehouse locations and distributes 35+ brands to hundreds of retailers across the region. The company is also expanding into the e-commerce and retail space in some countries.
The company’s original cloud ERP provider, NetSuite, could not meet the multi-currencies and tax environments requirement previously, thus Bloom & Grow decided to build their own platform. But the painful experience drove Deacon to reconsider NetSuite a few years later. “We effectively got divorced [from Netsuite] and then we remarried a few years later when we’d both grown up a bit, all over again,” he said.
Although the company operates its ERP on NetSuite, the data ownership firmly remains with Bloom & Grow, thus making the migration between cloud and an on-premise environment easier. Currently the company is moving back to NetSuite and in the middle of migrating its historical data into the cloud system.
One major reason that Bloom and Grow went back to cloud computing, according to Deacon, is NetSuite’s enhanced capability to bring data integrity to its multi-geographical operations. “Being able to view all our subsidiaries across at least five different tax environments through a single dashboard is very exciting,” he said.
Transform cost structure and supplier relationship
On top of providing a single view of data, he said the cloud-based ERP application also provides the flexibility and cost control that is critical for this high growth business.
“[With cloud computing] I can switch a significant fixed capital cost into a variable cost. It allows me to turn the cost down and turn the cost up as my business demands,” he said.
He added running his business on a cloud-based environment has also changed the way the company works with suppliers and partners. He quoted an example of choosing the company’s warehouse provider.
“If that supplier doesn’t work with the cloud and I can’t seamlessly integrate their warehouse management system into NetSuite, we probably won’t work with them,” he said. “That’s one of our key criteria when choosing new service providers.”
He added that cloud computing also provides the accountability of system uptime, which is critical to ensure business reliability.
“We basically now run our company on two cloud based systems and that’s it,” he said. “NetSuite for ERP, Finance and CRM, and Google Apps for everything else.”