ERP might stand for enterprise resource planning, but ERPs need to adjust their own plans to respond to industry circumstances and pressures, too.
That is the natural consequence of how distributors’ typical customers are feeling increased pressure from their customers, as the terms “at your fingertips” and “blink of an eye” become more literal descriptions of consumer expectations with each passing week.
These days, ERP companies find themselves dividing their attention between tackling traditional distributor problems and incorporating latest-gen capabilities into new tools.
When asked which requests from potential customers are most prevalent these days, Dustin Anderson, vice president with ERP provider Sage Construction and Real Estate, said that many of his company’s HVAC customers are actively looking for ways to update their business operations.
“[They are] eliminating manual processes such as wall-mounted dispatch boards and paper tickets,” in particular, he added. According to Anderson, more customers look to streamline things “so that their technicians and other team members all have access to the same real-time information right on their mobile device.”
Real-time information is a theme that runs through conversations with ERP vendors about customers’ current needs. At DDI System, director of marketing Jennifer Luizzi sees the continued embrace of e-commerce as the primary trending topic when customers talk about what they need. Of course, deciding to engage with e-commerce is just the first step.
“Finding the right e-commerce product, integrating it with your operations, and having an efficient way to control the product data throughout the entire system can be daunting,” Luizzi said.
The upside of incorporating the right solution, she continued, includes the ability to deliver finite details, specs, and product images for any SKU. A bonus: threading those details through a distributor’s website, she said, helps the distributor become more prominent in online search results. Meanwhile, the shopper gets presented with an array of related parts and resources, like how-to videos automatically, enriching their experience and improving the chances of building a better relationship.
More than any specific request, Epicor Software sees efficiency as the overriding customer concern over the last few years. Senior product manager Dan Kaminstein sees integrating business intelligence and data analytics as the company’s prime weapon to assist in this regard. The ability to “slice and dice” up to five years’ worth of data allows distributors to wring value from “massive amounts of current and historical ERP data,” he said.
Drilling into that capability, distributors can sort geographically, by product/product group, by customer, and all the way down to transaction-level details.
ERRORS IN THE FIELD
“Warehouse efficiency. Or the lack thereof.”
When asked for the most common efficiency-related mistakes that potential customers bring to the conversation, Luizzi sees this as the clear standout.
As a result, companies like DDI System are accustomed to this challenge and can articulate why it is worthwhile.
“Fine-tuning warehouse operations with optimized putaway, customer labeling, performance analytics, and paperless operations helps distributors reallocate talent in other areas,” Luizzi said. “For example, a feature such as cycle counting eliminates the need for annual plant shutdowns and dramatically improves inventory accuracy.”
Kaminstein concurs that “anything they can do to eliminate time-consuming and error-prone manual reporting” is a bonus.
While it is natural to adapt in small ways and adopt assorted solutions over time, Anderson said that can wind up creating its own sort of headache.
“The biggest efficiency-related frustrations we see come from customers who are using disparate solutions,” he said. The lack of integration among otherwise good ideas can result in “a lot of double data entry, which can lead to errors and confusion among team members.”
As Anderson describes it, that core problem has consequences that can ripple throughout the company, from scheduling to payroll to daily field reports.
TRAUMA AND DRAMA
An ERP is a fundamental part of daily operations for a distributor, and that represents a double-edged sword for owners. On one side, selecting and upgrading to the right ERP can yield an array of benefits.
However, owners may shudder at the thought of disrupting whatever the current “normal” is in such a fundamental way.
All three companies commenting for this article offered advice on this topic. One paused to challenge the common reticence on a more basic level.
“First of all,” Kaminstein said, “a business needs to incorporate a culture that embraces change, always looking for new ways to improve and grow their business.”
On an ERP-specific level, he focused on the planning phase. Document objectives, timelines, and critical business issues, he said. Assign teams to evaluate and test system requirements.
A new ERP, he said, will “drive a lot of change beyond the areas that directly utilize the system.”
That, in turn, can present an added benefit in the form of an opportunity to change processes that may otherwise be entrenched but which are delivering diminished value.
Anderson acknowledged that a new software system can be overwhelming but insisted that with the right preparation, it doesn’t have to be.
After identifying business goals and requirements, Anderson’s recommended next step was to determine the budget. For distributors, the expense goes beyond sticker price to costs associated with implementation, support, hosting, training, and integration, he noted.
However, on the other side of the ledger, “you also need to factor in the problems you’re facing with your current software solution, and what those issues are costing you on a recurring basis.”
Anderson’s other keys included involving the full range of stakeholders in the company and setting reasonable expectations. He extolled the benefits of not rushing the process, taking the time to properly train employees, and considering vendor capabilities with regard to providing that training and easing the transition.
Luizzi distilled the initial and internal conflict many distributors encounter.
“Many business owners are quite fine with the little quirks of their business system they’ve grown accustomed to. But there comes a time when you must take a hard look at whether those little quirks are preventing your company from satisfying more customers.”
Luizzi advised distributors to enlist a company that demonstrates an understanding of their specific business model and who can point to specific areas most likely to benefit from improved technology.
Luizzi added that pricing structures can allow customers to avoid the sense of a leap of faith by spreading out the payments, “ensuring you see the value of your upgrade as you’re paying for the business improvement.”
WHAT HAVE YOU DONE FOR ME LATELY?
What do a sample of ERP providers have to offer today that they didn’t as of two or three years ago?
“Best of breed is back due to advances in interoperability of technology and the depth of point solutions,” Anderson answered. “There are now point solutions targeted to very specific activities or sections of work as technology is getting more robust and mature in each specialized area.”
Sage is focusing on integration — not only seamless integration between its own products but easy integration with other leading solutions.
Luizzi reported that DDI System has been putting energy into “developing functionality for complex orders with things like multiple release dates, multiple delivers, and payment/pickup options.”
DDI’s product information management (PIM) system has been designed to deliver an improved look and richer formatting for quotes and order forms. That initiative, Luizzi said, was the direct result of feedback from a customer.
“Open-source e-commerce solutions, powerful BI (business intelligence) tools … public cloud deployment,” Kaminstein listed. “All of these things were developed or improved dramatically over the past few years.”
More recently, he explained, Epicor’s Virtual Agent has been built to let its artificial intelligence tool answer a customer’s questions about their data with helpful visuals, while also performing routine tasks to save time.
BEYOND DISTRIBUTORS’ DEVICES
So, what’s on the horizon for ERP services? Vendor comments suggest that the evolution of data and integration taking place in ERP software will find other ways to extend into the customer’s environment.
Anderson mentioned that his company recently bought a company focusing on data entry automation for accountants and bookkeepers. The technology uses artificial intelligence and optical character recognition to verify data and slash manual entry mistakes. Sage is using it internally at present but expects to extend availability to its customers in the coming months.
Meanwhile, Kaminstein related the story of a “customer who has integrated automation at their customers’ locations by installing WiFi-enabled IoT buttons on product bins. When pressed, the button sends an order to the distributor that includes the part number and the amount of product that needs to be replenished.”
That sounds futuristic, but also familiar to anyone who has had a dominant online retailer pitch them a “buy more” detergent clicker to keep in their laundry area.
Maybe, for distributors who accept and even pursue a certain kind of change, some types of “Amazon effect” are waiting out there to not only keep up with but to incorporate as an advantage.
See more articles from this issue here!