Global Case Study:

ABC Audio, LLC

Company Profile

Confidentiality Notice

The information contained in this document is confidential and proprietary to Oracle NetSuite.
Table of Contents
1. Purpose of Document .......................................................................................................................... 3
2. Business Background............................................................................................................................ 4
3. Current Landscape and Vision .............................................................................................................. 5
4. Company Personnel ............................................................................................................................. 7
5. Financial Facts ...................................................................................................................................... 8
6. Reasons for New System ...................................................................................................................... 9

Version: v1.1 (January 2019) 2|Page

1. Purpose of Document

This document is intended to provide information on the company, ABC Audio that will be used in
NetSuite SuiteSuccess Enablement Training programs globally. It provides for a common understanding
of the profile of the mock company which can be used by all Enablement teams in developing a Case
Study for their training on the SuiteSuccess FF MM Solution.

Version: v1.1 (January 2019) 3|Page

2. Business Background

ABC Audio, LLC (ABC Audio) is a cutting-edge technology company specializing in consulting, designing
and installing professional audio-visual systems. Their offerings are either custom, commercial or
residential. Their customers include commercial and residential properties but can be churches,
conference rooms, meeting halls, classrooms and any space where audio and video technologies are
needed. Three years ago, they expanded into supplying individual audio and video products to their
customers as well as providing a standard packaged offering that includes a product with installation.

Headquartered in Boston, Massachusetts, the company is 6 years old and has 65 employees. Current
year revenue is $35M.

The majority of revenue is in the custom, commercial and residential work but the plan is to increase
sales of packaged systems and products.

The company has 3 subsidiaries (USA, Australia and United Kingdom). Headquarters is at the US
location.

Each location has their own local warehouse where the audio and video products are stored (e.g.
microphones, cameras, sound systems). The inventory is serialized, and they are considering better
efficiencies (put away and picking) within the warehouse as they expand in North America. However
Serialized Inventory tracking is currently managed in Serialized Tracker and for the low volume of sales
for these items, ABC Audio feels it will keep this process but look to begin tracking serialization in the
new system in a future phase.

ABC Audio will subcontract work to installation companies such as Bose Install Services, Samsung Install
Services, etc. who will provide specialized installation services on behalf of ABC Audio. The partners will
then pay a referral fee to ABC Audio for the increased business.

Within the next 6-12 months ABC Audio is looking to expand further into Canada and Europe (the
Netherlands, Sweden and France are locations under final consideration). 2-3 years out, ABC Audio will
also consider expanding their reach JAPAC, with Singapore and Hong Kong being given top
consideration. Much longer term they would like to be in China and Japan. With various subsidiaries
already, ABC Audio requires more accurate allocations of expenses to appropriate departments and
locations as well as distributing expenses across subsidiaries. Real time consolidated financial
statements would be a dream, and this is not currently available and is a manual procedure in Excel
done each month.

Procurement of inventory involves multiple suppliers in USA and in China as well as some in Canada.
The ability to manage the reconciliation of Ordered vs Received vs Billed is becoming important as
business becomes more complex. The ability to move to Electronic Payments has evolved and now is
the dominant form of payment to suppliers by ABC Audio. They are using a system with their bank to
manage this process.

Version: v1.1 (January 2019) 4|Page

3. Current Landscape and Vision

ABC Audio sees growth opportunities in their B2B and B2C sales by establishing an ecommerce
presence. They have identified this as a future need and nice to have. At least 1-2 years out. They will
try to prioritize international expansion while also considering the best ways of expanding their foot
print within each region.

ABC Audio has two main competitors: Audio Depot and Sound Pros. Both have a strong presence in
their North American region, but neither are global. There is a small company in Las Vegas called Sound
Specialists that specializes in large event production. They offer specialized event management services
including AV rental, staging, high end video production and on-site event services. Sound Specialist is
well known globally in their industry and ABC feels acquiring the company would be a nice compliment
to their current offerings and could make them international expansion plans. Sound Specialist has
current software to manage events and rentals, but the accounting would be brought into ABC Audio if
acquired. This could happen in 6 - 9 months.

ABC Audio is using Microsoft Navision. Under the direction of the Board of Directors, the leadership
team is exploring alternative systems to support their growth projections. It is widely known that the
current deployment of Navision will not scale to support this growth. It has been highly customized to
support their multiple lines of business and does not have good integration capabilities. The executive
leadership team has made the decision to move to a cloud solution that will enable them to grow their
business without growing their back-office expense, support their acquisition strategy, diversify their
sales channels and expand their international reach over the next 5 years.

ABC Audio uses an external software system ‘SoundSystem Installations’ which manages the installation
activities. This helps them identify the project, the tasks and the resources for each installation but lacks
Project Profitability and a tighter integration with accounting. A CSV file is produced daily with all the
installation in for that day with a summary of the billing. This is then used to determine the referral fees
owed by partners/subcontractors, this is currently being done manually. ABC Audio generally bills Fixed
Bid, with Milestones, but also Time and Materials. The technicians need to document their time on
projects as well as reimbursable expenses. ABC Audio would like NetSuite to solve this but are leaning
on this being a Phase 2 priority.

Currently the products being purchase for resale are being sourced individually by each subsidiary and
warehoused locally, they would like to take advantage of bulk purchase discount by centralizing their
purchasing in the future.

There is also an immediate need for tracking Fixed Assets such as buildings, vehicles, furniture,
computer, IT equipment, high-cost tools and equipment, etc. This has become something that
accounting is losing some control over with the growth in Assets. Currently there are almost 500 Fixed
Assets that are managed in an Excel spreadsheet and depreciation is recognized in Microsoft Navision.

The Controller mentioned that they had a failed implementation about 3 years ago, not enough training.

Version: v1.1 (January 2019) 5|Page

Business Compelling Event/Goals:

• Growing demand for current business opportunities is stretching the team internally
• Ability to acquire business to expand their foot print, in North America and globally
• To grow internationally and manage the requirements of local jurisdictions
• To have visibility into how business units and regions are performing much more easily
• Require access key reports and metrics easily for more informed, and accurate decision-making
in near real time as they look to explore growth domestically and internationally

Business pains:

• Manual accounting & billing processes

• No real time consolidation of current subsidiaries – this is manually done
• Proper segmenting of business unit costing
• Lack of Project Management and Project Profitability
• Ability to track serialized inventory and multi-location inventory
• Inability to have a 3-way match process on inventory procurement – unsure of inaccuracies in
billing
• Ability to tie in Electronic Payments and AP Invoices in the system vs manually
• Management of Installations is disconnected with accounting and not fully functional
• Tracking of assets is manual in Excel

NetSuite Differentiators:

• SuiteSuccess Financial First Mid Market Edition

• Cloud solution for lowering IT risk and spend
• OneWorld for global financials and consolidations
• Project Management, Inventory Management and Financials in one System
• Ability to scale with solution as the company grows

Current Systems:

• Navision for financial software

• Excel for asset and stock tracking
• CSV import with SoundSystem Installations Management Software (SSIM)

Version: v1.1 (January 2019) 6|Page

4. Company Personnel

Head Office Address: 1860 Centre Street, Boston, MA 02132

There are some local managing personnel in the international locations, but the decision makers and
corporate management team are all in North America.

The Decision Makers are:

• Chief Executive Officer (CEO) – Klein Gattaway

• Chief Financial Officer (CFO) – Janice Row (Project Sponsor)
• Controller – Gerald Frits (Project Manager)
• EVP of Sales – Terry Magnus (joined ABC Audio 2 weeks ago)

Additional key roles:

• Sales Manager – Allan King

• Accounts Payable – Harper Collins
• Accounts Receivable – Jesse Martins
• Inventory Manager – Jose Renaldo
• Purchasing Manager – Yasmine Shah
• Operations Manager – Kendrick Mayor
• Consulting Manager – Celine Gagnon
• Director of Design & Installation – Zach Evans
• Director of IT – Cal Rogers
• IT Administrator – Jake White (NetSuite Admin)

Version: v1.1 (January 2019) 7|Page

5. Financial Facts

• Current year revenue: $35M

o $25M custom, residential, commercial offerings
o $9.5M Audio & Video products
o $0.5M Referral Fee Income from Partners
• Indirect spend: $4M
• Total personnel: 65 worldwide
• Installation Service Techs and Project Management: 34
• Execs/Managers: 12
• Accounting personnel: 12
• IT personnel: 3
• Other support staff: 4

Version: v1.1 (January 2019) 8|Page

6. Reasons for New System

The main driver for exploring new software offerings is scalability. With the aggressive growth initiatives
and the desire to expand both nationally and internationally, ABC wants to standardize back office
operations on a cloud platform while keeping IT costs flat. Using Microsoft as an on-prem solution is
becoming costly and it is difficult to find IT personnel to support the Microsoft platform. ABC wants to
have a more sophisticated customer experience, better visibility into inventory, and more efficient
processes to remain competitive in the market. Additionally, with the potential acquisition of Sound
Specialists and their diversified product offering, ABC will need a system that could integrate with
current operational software while being the accounting back end.

ABC Audio has identified that the following challenges are impeding their ability to grow:

• Systems don’t scale as the business is growing causing a lot more manual work
• Rising customer expectations from ABC Audio
• Decreased project margins due to not understanding profitability and ease to bill costs back to
client
• Inefficient billing processes for projects
• Delayed close cycle due to manual reconciliations and multiple systems
• Limited and unreliable visibility into operations
• Poor working capital management due to high DSO

Customer statements uncovered in conversation:

“Currently our DSO is 52 Days, which isn’t too bad, but we would like to improve that. We have a bank
note which is costing us interest expense every month. I’d like to free up working capital to finance our
business rather than service debt.”

“Our IT spend is significant as a % of our total revenue. We would rather spend our salary budget on
sales reps than in IT, but we need to support our business and invest in infrastructure that will allow us
to grow.”

“Our accounting department is spread very thin. Our processes are manual, and our close cycle is very
slow (18 days!). In order to improve that with our current system, we’ll have to hire more staff. We
have open requisitions for 2 accounting staff. We really would rather use those funds to invest in
acquisition, but we need to support the business as well.”

“Our collection process is cumbersome. We don’t have great inventory visibility and our order capture
system doesn’t integrate with the accounts receivable operations. Our collection process is slow, as you
know from the DSO discussion. We really want to leverage those resources for more high value add
functions, such as customer service or even order entry.”

“Our AP invoice processing is very manual. We are missing early payment discount opportunities and
the payables department is spread thin. Because our accounting department supports so many

Version: v1.1 (January 2019) 9|Page

locations, it is difficult to get approvals and matching to purchase orders. We really need help improving
this process. “

“We recognize the need to have an eCommerce presence for our product offerings. We have good hold
on a niche market and need a mechanism to reach a broader customer base.”

“Our direct procurement is well managed, but our indirect procurement is becoming problematic. We
want to control maverick spend and ensure items paid for were property authorized and invoices are
accurate.”

“All our offices are doing their own purchases we would like to centralize purchasing to take advantage
of volume or special pricing discounts.”

Version: v1.1 (January 2019) 10 | P a g e

Version: v1.1 (January 2019) 11 | P a g e