As Industry Segment Managers with Activant Solutions Inc., we have spent many years observing thousands of companies carve out a place for themselves in the wholesale distribution market space. The industry has evolved from full-line distributors with exclusive rights to a territory, to a global market with intense competition and the need to stand out in a crowd of vendors all vying for a single customer’s loyalty. Adaptation has become the rule, and an ever-heightening level of customer service is necessary in order to thrive.
As a result of this trend, many distributors are incorporating multiple disparate systems into their processes, because it seems implausible for one software system to handle everything that is required to best serve the customer. This leads to costly integrations if those systems are to talk to each other, or costly maintenance of separate programs if they are to remain apart. Many of these systems come with their own databases that are unique to themselves and require double entry to maintain their information separately from the distributor’s enterprise solution.
Some of the disparate systems we see implemented beyond a distributor’s enterprise solution include functions for:
- Service and repair tracking
- Service dispatch
- Customer label production
- Managing customer inventories (either owned or consigned)
- Warehouse solutions (wireless or RF)
- Replenishment and forecasting tools
- Quoting systems
- Strategic pricing cubes
- Robotics and carousel technologies
- Document imaging and management systems
- Job tracking and manufacturing solutions
- BOM configurators
- Proof of delivery systems
- Shipping manifest packages
- Delivery routing devices
- Web commerce and customer self -service solutions
- Mailings and other marketing programs
- Sales force and CRM tools
- And more.
Even internal processes often rely upon separate systems. In a recent customer visit, we encountered a large distributor leveraging five unique solutions to handle service, CRM, labeling, accounting, and inventory management. Their processes included re-entry of data in many steps from Excel to their accounting system in order to produce meaningful financial statements.
In this example, when a customer calls with a question, the customer service representative must first determine which application to open for an answer; invariably, the customer needs to wait on hold or be called back after a time-intensive scrutiny of the data. If key customer accounts or vendors request a meeting, a “fire drill” of updates from all of these systems is required in order to prepare. Management is also unable to determine corporate positioning, monthly standing, customer and sales rep activity, and recent monetary inflows and outflows with any sense of complete accuracy, because the data is not centrally gathered.
What is the true cost of these disparate systems? Is it lost sales? Lower customer satisfaction? Does this lack of efficiency lead to frustrations that damage employee morale? We see these issues as the primary drivers that cause prospective clients of Activant to seek an integrated enterprise solution. Customer demands on the distribution channel are not going to diminish; in fact, they will increase. Are you prepared to take on more challenges with the tools in your current environment? Or are multiple systems creating barriers to your company’s growth?
Stuart Scott and Dave Lusk are Industry Segment Managers at Activant. Find out more about Activant at distribution.activant.com or call 1-800-776-7438.