For companies considering global expansion, determining how to construct IT systems, especially core systems, is a challenging issue. The difficulty companies encounter when their current IT systems don’t seamlessly fit the unique conditions of the local environments where they operate. When deciding to update or refresh these systems, it becomes imperative to steer clear of implementations that could introduce complexities, leading to high costs and consuming substantial time. The goal is to ensure that the process of upgrading systems doesn’t impede the smooth functioning of the business; hence, it is crucial to execute these changes in a manner that is both efficient and cost-effective.
Adastria Group, a leading fashion company known for brands like “Global Work” and “Niko And..” faces the challenge of global expansion. The company maintains a significant global presence, operating in approximately 1,500 stores worldwide.
Adastria is on a mission to grow globally To expedite this process, the company adopted the SaaS application “Oracle NetSuite,” providing a unified system for essential functions such as ERP (Enterprise Resources Planning), CRM (Customer Relationship Management), and E-commerce, deeply impacting the company’s profitability and operational efficiency. To streamline their operations, the company has adopted the SaaS application Oracle NetSuite, unifying crucial functions like ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), and E-commerce. This move significantly enhances Adastria’s profitability and operational efficiency.
Among various ERP options, why did Adastria choose NetSuite?
Meeting the Need for Rapid Implementation of Core Systems for Global Expansion
Adastria celebrated its 70th anniversary in 2023. In the medium-term management plan established in April 2022, the company outlined four growth strategies: “Multi-brand Category,” “Digital Customer Touch Points Services,” “Local” and “New Business.” Shuhei Toyonaga, Senior Manager of DX Strategy states, “We are actively expanding into Southeast Asia in addition to the already established presence in the United States, China, and Taiwan.“
Preparations for overseas store openings require not only physical resources such as stores, facilities, and personnel but also IT systems to support operations.
Traditionally, Adastria replicated the core systems utilised in Japan at its overseas locations, complementing them with subsystems customised to the business practices of each respective country. However, this approach, while ensuring compatibility with the systems employed at the Japanese headquarters, required the development of unique systems adapted to local requirements for every new store opening, requiring considerable effort.
To address these challenges, Toyonaga states, “We wanted to package the IT infrastructure to deploy it more quickly for upcoming store openings.“
In addition, the company faced the challenge of ageing IT systems at its overseas locations. With the need to update IT systems approximately every five years, the growing number of international stores means an increasing number of systems requiring updates. Without dedicated IT personnel at overseas locations, addressing system updates poses a challenge in terms of effort and securing skilled individuals.
To solve these challenges, Adastria concluded that it was necessary to overhaul IT systems not only for new bases but also for existing overseas bases. Toyonaga recalls, “With the updated system, we wanted to seamlessly connect sales and accounting data and access information in real-time. Additionally, a system that aligns with local business practices was necessary.“
As future expansion countries are not fixed, we need a globally applicable mechanism with a proven track record in Asia. This mechanism should also be flexible enough to accommodate the company’s specific needs.
NetSuite Aligned with Adastria’s Needs
Adastria considered adopting SaaS (Software as a Service) ERP that could be used globally and sought partners to provide support in various countries worldwide. After searching not only in Japan but also in places like Shanghai, they found Shearwater Japan. This is a company that specialises in introducing cloud technology primarily in the Asian region.
Shearwater proposed NetSuite, a system that aligns with Adastria’s needs, with its “OneWorld” concept. The system allows companies with multiple offices in different countries and regions to operate financial accounting, CRM, marketing, and E-commerce functions in one integrated system. NetSuite’s ability to adapt to multiple languages, currencies, and business practices and regulations in various countries, along with its ease of expansion when the business grows was appreciated.
Bassot Baptiste, CEO of Shearwater explains, “With NetSuite, you can flexibly connect headquarters and local offices. It’s SaaS ERP that allows seamless operation of the entire IT system landscape.”
Shearwater has a track record of introducing NetSuite to various Asian countries. Toyonaga appreciates Shearwater’s approach, stating, “Shearwater delivered responses specifically designed for a business company. We evaluated various factors like cost, functionality, and support structure among different global SaaS ERPs, including NetSuite. After considering these aspects, we concluded that NetSuite was the best choice. The support structure provided by Shearwater was also appealing.“
In April 2023, Adastria opened its first flagship store in Southeast Asia in Bangkok, Thailand, and implemented NetSuite in conjunction with this expansion.
“Adopted NetSuite, implementation speed became overwhelmingly fast because it is SaaS. We were able to introduce sales and accounting functions in about three months,” Toyonaga explains.
Currently, Adastria has added functionality to integrate with external commerce systems. All essential system functions for operating apparel stores are handled using NetSuite.
Improvements and changes in business processes after implementation are also addressed using NetSuite’s standard features. In addition to apparel, the Bangkok store offers lifestyle goods and operates a cafe. Toyonaga notes, “It is quite convenient that NetSuite can cover various types of stores.“
Baptiste adds, “One significant advantage of NetSuite is its ability to add functionality as needed.“
The implementation was led by the Shearwater Japan’s team with the coordination of the Point of Sales (POS) system provided by a Thai IT vendor. The support from Shearwater was swift and remote.
Of course, NetSuite adoption had its challenges. Due to the tight schedule leading up to the store opening, the duration until cutover was considerably tight. Consequently, the Shearwater Japan team identified the minimum necessary functions for store operations and prioritised their rapid implementation.
“In the implementation, rather than the Fit-and-Gap approach of analysing and modifying how well it meets our needs, we adjusted Adastria’s business to fit NetSuite’s standard,” Toyonaga explains.
In 2019, Adastria overhauled its IT system when opening its flagship store in Shanghai, China–using a scratch-built approach based on a different core system than NetSuite. This process took about a year. Toyonaga remarks, “Considering that the 3-month implementation this time is precisely the service suitable for our rapid overseas expansion.“
The traditional method of “designing specifications based on business processes, setting up IT infrastructure, and building a system” isn’t inherently flawed. Such an approach has the advantage of building a system that is user-friendly from the start.
Why did Adastria switch from the traditional method?
“NetSuite is a system already used by companies worldwide. There are features and usage that we hadn’t considered. The business environment is rapidly changing now, and it’s an era of adapting business processes to that change. With NetSuite, we believed that our business could grow in response to changes in the world.”Shuhei Toyonaga, Senior Manager of DX Strategy of Adastria
Expectations as a Partner in Advancing DX Together
Historically, Adastria has developed systems from the ground up, even in domains where pre-existing packaged products are available. Looking ahead, the company aims to delineate between areas where it will construct proprietary solutions and those where it will adopt widely-used platforms and applications for back-office operations. This strategic approach involves harnessing Software as a Service (SaaS) to enhance standardisation and efficiency.
Toyonaga states, “We will utilise SaaS and similar tools for efficiency in back-office operations. We want to create systems that improve customer experience ourselves. To focus on that, we need to further master NetSuite.“
Yuya Sakurai, Executive Officer and Head of DX Strategy at Adastria, speaks about the company’s DX strategy, emphasising, “We prioritise how to use digital to make customers excited. We want employees to be excited too. Adastria aims to deliver a better customer experience globally. For that, we will continue to leverage SaaS like NetSuite.“
Adastria’s overseas expansion is likely to progress further. NetSuite is expected to smoothly facilitate this realisation.
“Adastria is a company that advances business expansion rapidly. The ability to keep up with this speed is extremely important. We continue to expect NetSuite to be able to rapidly introduce as in this case.”
Oracle and Shearwater possess extensive global expertise. These companies not only offer products and facilitate their utilisation but also excel in collaboratively addressing and supporting the growth of businesses—a distinctive strength that sets them apart.
“Adastria refers to Oracle and Shearwater, not as external vendors but as ‘partners.’ We think of them as partners to think together and grow together,” Yuya Sakurai concludes.