Posted by Ranga Bodla, Wholesale Distribution Industry Lead, NetSuite
People are turning to the great outdoors for sports and recreation in ever greater numbers. A 2015 survey by the Outdoor Foundation found that approximately 141.4 million Americans—nearly half the population—have participated in at least one outdoor activity, be it camping, white water rafting, Alpine skiing, surfing, or just jogging through the park. Whatever the activity, there is an industry of retailers, distributors and manufacturers that cater to it, selling gear, equipment, clothing and anything else a consumer might need. Outdoor sports and recreation has become a booming industry.
According to the Outdoor Industry Association, outdoor recreation generates $646 billion annually in consumer spending and 6.1 million direct jobs. The popularity of outdoor activities is evidenced by the emergence of trade shows dedicated to one or more outdoor sports. A good example is the week-long SnowSports Industry’s Snow Show taking place in Denver from January 27 to February 2. This seven-day event features seminars, demos, keynotes and social events, 18,000 attendees, and an exhibit hall showcasing over 1,000 brands. That’s just for the winter sports. Dozens of other shows cater to warm weather recreation such as the Outdoor Retailer Summer Show in Salt Lake City.
This burgeoning outdoor market has brought many growth opportunities, and it’s also created some difficult challenges. Just keeping pace with the rate of growth is a major issue for many companies. A company with a hot product may find its existing ERP system inadequate for the spike in production and sales. Legacy ERP applications also may not exchange data easily with partners’ systems or other third-party applications. They may lack the features needed for things like ecommerce and mobile access.
Photo courtesy of Hestra USA
Hestra USA, the US branch of Swedish glove maker Hestra-Handsken, found itself paying higher and higher maintenance costs for its on-premise ERP, which required constant updating and trouble shooting, and it lacked the end-to-end integration and real-time data access that Hestra needed. Like other outdoor retailers and manufacturers, its server-based, legacy ERP was severely limiting its growth.
Legacy ERP can cause a number of problems for a growing business, including:
- Rising costs associated with maintaining, updating and manually integrating legacy ERP applications.
- Delays in transactions that must cross disparate IT systems, such as accounting, customer service, inventory management, procurement and fulfillment.
- Out-of-date records due to lack of integration between key systems.
- Lack of agility and scalability in IT systems, making it difficult to react quickly to changes in the markets or in production requirements.
- Inability to expand into global markets due to the limitations of non-integrated, silo applications. Onsite, client-server ERP make it cumbersome to exchange data with remote offices and to manage multiple locations as a single operation.
These deficiencies also deprive managers of the information and insight they need to anticipate opportunities and optimize resources. Growth companies overcome these problems by replacing their legacy silos with cloud-based ERP. A fully integrated cloud-based ERP platform, such as NetSuite’s, provides easy access to applications and data from any location; the scalability to increase capacity quickly; and a single version of the corporate applications and data.
When Hestra USA replaced its on-premise software with NetSuite’s cloud ERP, it reduced its IT costs significantly and achieved the visibility and real-time data it needed. Now Hestra’s applications and data are centralized in the cloud and accessible from any location. That ensures that everyone is using the same set of information and processes. The new system has improved Hestra’s efficiency and helped the company to grow by 50 percent each year.
Companies can run all aspects of its business on NetSuite’s cloud, including financials, CRM, inventory management, order fulfillment and sales—including in-store and ecommerce sales. By centralizing all business data in a single cloud solution, a company can scale up rapidly when the need arises.
Another outdoor company, Big Agnes, which manufactures camping and hiking gear, had to speed up its new employee recruitment in order to keep up with the spike in sales. It was ramping up so fast that the legacy ERP was on the verge of collapse. They needed a cloud-based infrastructure that could add capacity on demand.
“The processes we had at the time could not keep up with the pace,” explained Chris Tamucci, director of operations for Big Agnes. “NetSuite came at a time when we would have imploded in the next quarter had we not made the change.”
Do you have a growing business? Learn how fast-growth companies in the outdoor sports industry are succeeding with the help of the cloud by visiting NetSuite outdoor industries section and then register for the SnowSports Industry’s Snow Show in Denver from January 27 to February 2.