When you start buying and selling product for a living, the last thing you suspect is that the process will become so complicated you’ll need software to help you work out what you need to restock. But, alas, at Tapas HQ, we have reached that point. The simple spreadsheet I designed for Jessica about 4 years ago has served its purpose but has now outlived its usefulness and it’s time for a better, more sophisticated solution. Regular readers here will know that my first instinct is always to ‘turn to the tech’, and this problem was no exception.
The Background
The Tapas Lunch Company runs on the Netsuite cloud ERP system, which means we have access to masses of data on past order history, but the in-built stock ordering interface is clunky, messy and has never really worked for us. For that reason, Jessi has been exporting data and using the Excel spreadsheet to calculate her stocking quantities over the last few years.
The Problem
Whilst it does the basic job, we have found that the spreadsheet:
- Is slow and inefficient to use. Importing data from the ERP system takes a lot of processor power and slows down Jessi’s computer to a crawl (even after we bought her a shiny new Mac Mini!).
- Doesn’t produce the most accurate inventory restocking quantities. Of course, that’s not the spreadsheet’s fault. Garbage in, garbage out and all that – you know. But it works on simple mathematics (average sales over past 3 months) and we felt some more ‘sophisticated’ number crunching might help.
- Doesn’t provide a user interface to visually build up purchase orders and get them easily into Netsuite.
The Solution
I wasn’t really au fait with the terminology in the sector, so we Googled around for a while, looking for combinations like ‘stock reordering software’, ‘inventory software’ etc., and eventually came across Valogix. Not only did their solution look like it would do just what we needed it to do, but it was integrated with Netsuite too, so this should really have been our ideal solution. For the sake of fairness, I should also say that we looked at and had a demonstration of a similar solution from Just Enough, which looked advanced enough to power the inventory planning needs of a giant supermarket chain – we figured it was too much for us.
Valogix
We had a demonstration of Valogix from their salesman Tom. It was a very slick demonstration and got both of us very excited, it seemed it really would solve our problem and be a joy to use. Whenever that happens, being a small company, we are immediately worried about price. In my experience, these commercial SaaS systems are built with the big organisations in mind and companies like us are generally excluded financially. After a quick conversation with Tom it became apparent that it was expensive (for us), but not prohibitively so. Tom got us a good discount on the headline rate and we decided to go ahead.
The $1980 dollars we paid up front comprised 6 months worth of software licence and a deposit for 1/2 the estimated 8 hours worth of ”Estimated Initialization, Implementation and Training Support (hours)”. In his initial email to us, Tom stated that ”The quote also includes 8 hours of estimated services from Valogix for assistance with the implementation, setup and the training. We may not require the entire 8 hours and will only invoice for the actual services provided.” In the quote itself, Valogix are more specific, the fee is described as being for “Estimated services for phone assistance and remote support during the implementation.” That’s pretty clear to me.
The Implementation
We were in a hurry to get things up and running as our spreadsheet was really dragging its heels. Although he said it was optimistic, we could potentially be working within 3 weeks as ours looked like a standard implementation.
The project kicks off with an online planning meeting where two members of the Valogix team slowly and methodically run through all that would happen during the implementation.
It’s here that we learn that Valogix is not, in fact, integrated directly into Netsuite. It’s a separate system, installed on its own ‘virtual machine’, that draws information from Netsuite on a nightly basis. It took them 3 weeks just to set up the visual machine.
For the ‘integration’ to work, Valogix needs access to Netsuite as an administrative user with all privileges – and this is forever, not just during the integration stage. Either you pay for another user on your Netsuite account, or you agree to ‘share’ one of your existing accounts and just ‘try to avoid coinciding’. Either way, you are exposing your full sensitive Netsuite account data to them on an ongoing basis. Plus, you are either having to pay another monthly fee to Netsuite, or hope that Valogix don’t log in at the same time as you. It’s a messy solution and I am immediately disappointed, seeing as nothing was mentioned to me.
Once the virtual server is provisioned, the series of what I imagined to be training sessions begins. Except, they are not training sessions yet. First, Valogix needs you to help them make sure they have imported your data correctly, which they haven’t. Valogix works by installing saved searches on your Netsuite account and reading their output on a nightly basis. The initial implementation sessions consist of you slowly trawling through your data, pointing out what hasn’t been imported correctly.
Right from the beginning, this ‘data validation’ is impeded by what look like bugs in the Valogix system and software. It starts off with innocent looking glitches, like that fact that it won’t accept our email address because it is from a .co.uk domain but continues on to more serious looking issues, like graphics not displaying properly and browser cache issues. Since we are sitting in a WebEx conference with their team in New York, having them ‘pass us keyboard and mouse control’ so we can practice mundane tasks such as logging in, it takes ages each time we sit down to work through these bugs and finally discover what hasn’t been imported correctly. And it’s not complex custom data, but all sorts of standard fields common to every Netsuite account.
Now a big stumbling block comes up. Valogix doesn’t have any notion of multiple currencies. So, whilst they are fully aware that we are an importer, they are happy to sell us the software knowing that the financials won’t make sense. That’s because we have to choose whether Valogix import the item costs in the original purchase currency or our base currency. So, either order totals won’t make sense as we are compiling them, or inventory valuations won’t make sense. That’s really not good. To make it even worse, our Valogix representative doesn’t know anything about this and it takes a large chunk of an hour session and constant emailing to establish what the issue is and finally that Valogix doesn’t support multi currency. This is very frustrating.
It takes what seems like ages to finally get the data imported correctly, punctuated by one day when everything just disappeared, causing panic. We have to be very active in this process, despite the fact they have full access to Netsuite and could simply check for themselves whether certain fields have been pulled correctly. Instead, we have to have 1 hour WebEX conferences.
When we are able to see what our data looks like in Valogix, we proceed to something more akin to training, in which we produce a purchase order in Valogix for transmission to Netsuite. Except it doesn’t transmit. More wasted conference time, more emails and it turns out that it doesn’t transmit because Valogix doesn’t support ‘Lot Numbered Inventory Items’. That’s food to you and me – and pretty much 90% of our products. Of course, this comes as news to both us and our Valogix rep. They knew that we imported food and worked with batches and expiry dates, but failed to mention that Valogix didn’t support this item type. The solution? They would only fix this in a future release, with no current date. Until then, we would have to manually enter purchase orders or do some sort of Excel import-export. And this we find out after 2 months.
The Invoice
By now, we’re past 2 months of implementation time and have barely started training. The data implementation has been slow and error strewn and the software has been buggy and lacking in key features that we need.
And then I receive an invoice for $1220.63. I have exceeded the 4 hours of “Estimated services for phone assistance and remote support during the implementation” by 7.75 hours.
There are about 20 lines on the invoice, and it immediately becomes clear that they are charging me $157.50 dollars an hour for absolutely every movement on our account since day one. Here are the highlights:
- $118 dollars for the initial planning session
- $275.63 for setting up the virtual server for our account
- $157.51 for installing the saved searches on Netsuite and checking
- $630 for all the WebEx sessions
- $315.01 for customisations
- $236.25 for upgrades!?!
- $78.75 for fixing the missing information one day
- $39.38 for something unspecified
Now come on. I’m not looking for a free lunch, I understood that we would be paying for phone assistance and remote support. But not this. I figure that out of the above, not more than a couple of hours is really justified.
The Complaint
I complain to Valogix. Pam says this is normal and that all Netsuite implementations are different and 30 hours implementation is normal. Wow – that would be $4725 dollars! In fact, she was very surprised Tom had quoted us 8 hours or less, and she had had a word with him. Interesting, nobody had had a word with me. I tell her I’m very unhappy and don’t think this is fair at all. She agrees that the upgrades could be removed from the account and that the 11.75 billed hours can be reduced down to 8 hours, leaving us owing only $630. Unfortunately we are still not finished the implementation though, so more hours would need to be spent to get us active and trained.
Faced with another bill of upwards of $1000 dollars and god knows how much more time to get up and running, I decide to cut our losses and cancel the service. I’m very disappointed and don’t think I want to go any further with this company.
Honestly, I feel like they should give me all my money back, but let’s be realistic for a second. They have put some time and resources into this (not us much time as we have wasted, but anyway), so let’s try to come to a swift and reasonable agreement. I’ll agree to their 8 hours worth of billed implementation time (which I don’t really agree to at all, but anyway…) at $1260. They can just refund me the 6 month service fee paid up front (since we’re not going to be using it). Taking into account the 4 hours implementation I paid for up front, that would leave $720 returnable to me.
The Response
Hi Jon - We’re very sorry you do not plan to proceed.
As Tom probably told you in the sales meetings, your license fee and services deposit is non-refundable. Please note Footnote #8 on your signed quote attached.
What we will do is cancel the invoice recently sent for the additional service hours so you do now owe us anything.
We wish you every success in your business and hope you grow quickly so that you’ll want to re-engage with us to help you with your planning.
I’m sure you can already guess that Tom didn’t mention that.
I write a response saying that I think my solution, whilst leaving me $1300 out of pocket and two months behind, was reasonable and that I’d like them to reconsider.
Ignored. Completely.
The Bottom Line
Missold a bad product with serious flaws. Unfairly charged and ultimately ripped off. Yes, it says in the contract that they won’t give you back the unused licence fee. But why make customers sign that? Why enforce it? What about all the time we wasted on helping Valogix find the bugs in their software? It makes you think and it stinks of a company that couldn’t care less about customers and is only interested in making a quick buck. If you have read anything on this site, you’ll know what I think of companies like this – take a look at what I said about Vodafone recently. Customers should be treated fairly – not because you are binded by contract, just because it’s the right thing to do.
So, $2000 dollars out of pocket, 2 months behind on finding a solution for inventory planning, and now ignored by Valogix. Great stuff guys.
Update 1/6/2012: 2 hours after I published this article and warned Valogix that it had been posted, they made the effort to call me. “If we can find a solution for you, would you be willing to take down the article?”. I asked him what sort of solution he had in mind and he told me he would need to discuss it with his team. Today he called back and offered me a $270 refund.
Update 1/7/2012: Valogix final offer was the $720 refund I had originally suggested as quick solution. Of course, I accepted, but given the hoops I was made to jump through I wouldn’t exactly class this is a quick solution to the case. But there you go, case closed.
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Sadly overselling and underperforing is not uncommon in software service industries. From what you asy Valogix sucks and I’ll definitely make sure none of the other Netsuite users I know have anything to do with them.
We export from a Netsuite Report to Excel and Excel does the math to generate the PO and we then import the resulting PO back into Netsuite.
Hi Peter. Yes – we’ve now switched back to using an Excel spreadsheet for this. Thankfully, the Valogix debacle has pushed me into updating the spreadsheet we were using and it now runs much better than before.
In our business, we too have been looking for a software company to form not too dis-similar function to your needs. Thanks for sharing as now we know who not to use. I’ll post the details of reputable companies to use once we’ve found our solution.
This is an appalling case of lying, I mean, “over promising and under delivering” (Makes me doubt the credibility of the email I received yesterday from a Nigerian price offering me $10 million
) Usually, poor service and credibility catches up with these kind of cowboys. I hope you get your situation sorted soon
Thanks Jon for sharing this info.
Unfortunately there are many other companies and particulars like this one on the net, that, with clever “tricks” get you to pay them money for nothing. I was ripped off once 300$ for an individual. Nothing I could do, I complaint to paypal several times, and because there are virtual goods, I lost my money.
Some people, like Valogix, know how to mask it very good, but at the end is a rip off too.
So is good that people post this type of articles so we all can know the truth behind the web curtain.
And this way companies like this one should start thinking of earning their money for a well done work in stead.
That is awesome.
We were thinking of using Valogix services, and we were looking for a Valogix review to tell as something about this company, and we found you.
We will definitely not use Valogix services now, as we understand your case completely as we have a very similar issues in our side.
Thanks so much for this article, and this site.
Hi Jon,
I spend a lot of time as a systems integrator for a large institution and am innately familiar with the type of issues that you describe here. This is sadly par for the course with enterprise software vendors. From what you presented here I believe you chose the correct course of action when you terminated your agreement with them. It was looking to not meet your needs even if the implementation went smoothly.
In the US it may have been possible to take them to small claims court to recover the initial licensing payment if there were material misstatements in your initial contract. However, probably just better to let sleeping dogs lie.
What would I recommend for your case? Looking for easy performance tweaks on the Excel workbook (as you did) and finding what hardware bottleneck exists on the Mac Mini as you run the calculations. Have a look at the activity monitor and see if disk activity was high, Memory usage jumped up when running it, or (most likely) the CPU activity on one of the cores was maxed out (double click on the cpu usage graph to get a larger version). Look to see if one graph or multiple graphs are being filled as the calculations run.
Once you determine the bottleneck, I would take a look at which Mac Pro (or if you’re not tied to Apple) which workstation-class PC would make the most sense. Mac Minis are nice, but sometimes you just need raw performance.
Many thanks for your helpful comments Dave. I haven’t had time to update the article yet, but Valogix eventually agreed to give me $720 dollars back which is what I initially offered for a ‘trouble free’ cancellation. Since I wrote this article, I have rewritten the spreadsheet and it is now running well. Part of the problem was Jessi’s computer, which we have now cleaned up and speeded up, but I think the main problem was that she was running it in Open Office, which appears to be a huge memory hog. The final piece of the jigsaw was the spreadsheet itself, which was slow because of a very large number of VLOOKUP formulas. I’ve improved the way it works so it doesn’t have to run so many queries and now it runs just fine. In the near future I’ll hopefully get round to writing about and sharing this new spreadsheet and the stats it uses in the hope it could help others in this situation.
Shouldn’t Net Suite handle most of this with its Demand Planning Module?
Hi John. Yes, in theory I guess the Netsuite Demand Planning Module should handle some of this. It’s been about a year since I had that module and I can remember that it didn’t work for us. Firstly, I remember that the numbers never seemed to calculate right for some reason, so we just gave up on it. I also remember that it didn’t let us work the way we needed to (I can’t remember specific details) and we had to put in ‘false’ reorder points and stuff like that – I think it was something to do with it refusing to include any items that were not below the reorder point on the PO you were building. Of course, these issues might be fixed by now but Netsuite modules aren’t cheap and I’m not sure Valogix works out that much more expensive than the module. Also, the key selling point of the Valogix system is the graphical/interactive nature of it – you can drill down into inventory sales and forecasts to see where the numbers are coming from, and that is something that is hard with Netsuite.
Hello,
I am sitting through a Valogix webcast “training” right now. This is the third such training that we have had. My experience is very similar to yours. Our company bought Valogix 5 months ago and we still haven’t been able to implement it yet because of the problems importing our product information into the Valogix system. Right now our Valogix trainer cannot find some of our part number for the demonstration. We are a food production company and salt is one of our most common ingredients and our trainer cannot find it. Wow, I am without words on this.
One of the first problems that we had with Valogix was software compatibility. After a few failed implementations, we were told by Valogix that their software was based on MS Access 2003 and because we are using Access 2007 we would have to set up a virtual machine with MS Access 2003. Isn’t Access 2003 a little obsolete and 2007 is soon to follow? Why is a new software product based on an obsolete system?
Another problem is that we have is that we don’t have enough history for Valogix to reliably forecast our needs. Right now the trainer is showing us how to manual enter the forecast information. So that means that we are giving the software information that we paid for it to do. This is not a problem with the software but a lack of foresight by our IT group when they decided to buy the software.
Looking forward, I can’t see how Valogix is going to provide us with any useful information for forecasting and planning. I would be surprised if once this is implemented if we will actually use it.
I feel for you man – surely it would be worth cancelling if you are not going to use it?