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Penguin Computing replaces SAP R/3 with NetSuite

Leading Provider of Linux-Based Enterprise Computing Solutions Gains Real-Time Visibility and Control While Improving IT Efficiency

SAN MATEO, Calif.—July 24, 2014—NetSuite Inc. (NYSE: N), the industry's leading provider of cloud-based financials / ERP and omnichannel commerce suites, today announced that Penguin Computing, one of the largest private suppliers of Linux-based enterprise and high performance computing solutions in North America with more than 18,000 systems installed and over 2,500 customers in 40 countries, has replaced an outdated and problematic SAP R/3 4.6D ERP system with NetSuite's industry-leading cloud business management suite. The company, founded in 1998, has dramatically improved its efficiency and visibility since going live on NetSuite in January 2014 after a rapid three-month implementation. Penguin Computing is now taking advantage of a broad range of NetSuite capabilities, including revenue recognition, work orders and assemblies, advanced inventory, demand planning and the powerful SuiteCloud Development Platform to streamline financial and operational processes in the cloud. As a result, Penguin Computing has gained real-time visibility into its key business performance across mission-critical business functions for better business decision-making. NetSuite gives Penguin Computing the speed, flexibility, agility and scalability that it needs for continued growth. With NetSuite, Penguin Computing no longer needs to deal with the integration hassles, high maintenance fees and version lock issues inherent in SAP R/3.

"We're already more efficient on NetSuite than we were on SAP and we have real-time visibility into all aspects of the business," said Garth Thompson, Penguin Computing VP of IT and Services. "Our users have access to more information and finance loves it—they have confidence in their numbers, they trust the system and can see what they're doing. It's mind-blowing how easy it is to find and access information in NetSuite compared to where we were before."

The SAP R/3 system previously in place was cumbersome and difficult to use, presenting Penguin Computing with challenges on both business and IT fronts:

  • Business users had poor visibility into key data and could not readily run reports or access information on demand, relying on IT for report generation and troubleshooting.
  • Accessing and updating information through any means other than the SAP fat client interface was "nearly impossible" for an IT team that had written its own middle layer to leverage open APIs, according to Thompson.
  • IT had to maintain an aging ERP system while struggling with customizations and upgrades, and was faced with high costs for specialised third-party SAP consultants.
  • Meanwhile, data quality had suffered over the years and the company had resorted to Excel spreadsheets to run the majority of its business processes, in line with the SAP system.

Penguin Computing began exploring its options when SAP announced it was ending support for R/3 4.6D.

After a comprehensive evaluation process, Penguin Computing selected NetSuite, which met its criteria of simplicity with rich functional scope, ease of use and a robust API for customization and integration with other software packages. The company also wanted a SaaS solution with the flexibility to adapt to rapid changes in its business model.

"We have a rapidly changing business—that's one way we maintain a competitive advantage," Thompson said. "We needed a SaaS ERP system that's agile enough to match what we're doing and easy enough for my team to change systems and processes in days or weeks, a task that was impossible with SAP, which would require months and months of planning and consulting. NetSuite was the only vendor that provided the full list of everything we needed in a cloud ERP system."

The greater agility Penguin Computing is realizing with NetSuite is a "huge win" that enables it to better serve customers in academia, government, life sciences, manufacturing, financial services, web hosting, and oil and gas. With its IT team handling roughly 70 percent of the implementation work, supported by NetSuite Professional Services, Penguin Computing is realizing significant improvements in a number of areas:

  • Real-Time Business Management. NetSuite gives Penguin Computing real-time visibility into key business performance across core business functions for better business decision-making. Real-time analytics provides the finance team the efficiency of financial reporting it has never experienced.
  • Greater IT efficiency. Penguin Computing's IT staff is more than 30 percent more efficient with NetSuite, without the stress and overhead of managing software, servers and backups; the company is retiring three servers with its move to cloud ERP.
  • Custom production work. The NetSuite Work Orders and Assemblies module supports Penguin Computing's customer-specified build-to-order production at its Fremont, Calif. facility, with capabilities for work orders, bin management and assembly management. Work-in-process (WIP) capabilities will be introduced later this year in part to support better customer updates on orders.
  • Revenue recognition. Replacing Excel-based processes, NetSuite's revenue recognition capabilities have given Penguin Computing new visibility and control over diverse revenue streams from core high-performance computing (HPC) hardware sales, services and support, and its cloud-based Penguin Computing on Demand (POD) offering, involving both usage-based and recurring subscription revenue.
  • Superior inventory Management. Penguin Computing has improved its speed and precision in managing thousands of components sourced through NetSuite from 12 core suppliers, and another 50 lesser-used suppliers; a full rollout of the NetSuite Demand Planning module later this year is expected to give the company new capabilities in inventory forecasting and replenishment.
  • CRM and OMS integration. Using NetSuite's powerful SuiteCloud Development Platform, Penguin Computing has integrated its new ERP solution with its Salesforce.com CRM instance, which had not been integrated with SAP, reducing manual work and giving sales personnel visibility into order status. NetSuite is also integrated with Penguin's custom-built order management system (OMS), while NetSuite's built-in return merchandise authorization (RMA) features have improved transparency and control over RMA processes.

Today, more than 20,000 companies and subsidiaries depend on NetSuite to run complex, mission-critical business processes globally in the cloud. Since its inception in 1998, NetSuite has established itself as the leading provider of enterprise-class cloud financials/ERP suites for divisions of large enterprises and mid-sized organisations seeking to upgrade their antiquated client/server ERP systems. NetSuite excels at streamlining business operations as demonstrated in a recent Gartner study naming NetSuite as the fastest growing financial management software vendor on a global basis. NetSuite continues its success in delivering the best cloud ERP/financials suites to businesses around the world, enabling them to lower IT costs significantly while increasing productivity, as the global adoption of the cloud is accelerating.

About Penguin Computing
Penguin Computing is one of the largest private suppliers of enterprise and high performance computing solutions in North America and has built and operates the leading specialised public HPC cloud service, Penguin Computing on Demand (POD). Penguin Computing pioneers the design, engineering, integration and delivering of solutions that are based on open architectures and comprise non-proprietary components from a variety of vendors. Penguin Computing is also one of only five authorized Open Compute (OCP) solution providers leveraging a Facebook-led initiative to bring the most efficient open data center solutions to a broader market, and has announced the Tundra product line, which applies the benefits of OCP to high performance computing. Penguin Computing has more than 18,000 systems installed with over 2,500 customers in 40 countries across eight major vertical markets.

 

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