5 Reasons Why Distributors Need a Completely Connected ERP
A major benefit of using an ERP solution in a modern business is that you can manage many core business areas with just one system. Financials, inventory management, purchasing management, and sales management are tied together allowing you maximum insight and control over operations. Keeping functions separate can cause a disconnect between departments, increasing the likelihood of data errors, duplication of functions or records, lack of visibility into the business as a whole, and overlooked opportunities for sales.
A fully-integrated ERP solution ties all of these disparate business functions into a seamless workflow and allows them to communicate with each other.
Today’s ERP solutions offer a variety of options to help distributors achieve this goal. But, leading ERP software goes beyond managing daily operations by offering tools to drive customer engagement and incite customer loyalty.
This article discusses the Top 5 reasons how leveraging a completely connected ERP can drive business performance—and results.
Compete Among Digital Giants
In today’s market, the number one reason distributors are considering upgrades and new solutions is due to the rise in online competition. Most distributors are looking for a way to expand their reach and get the most out of customer connectivity.
Industrial distributor Jansen Ornamental in El Monte, California found themselves facing this exact challenge. They required a software solution that could tackle their unique operational requirements and take their business to the next level with advanced business tools. Plus, they needed these tools to be unified into their day-to-day operations software. Jansen turned to DDI System’s Inform ERP which offered a modern-day eCommerce solution coupled with an ERP. The results have been staggering.
Purchasing Director Ron Andrade explains ““By offering eCommerce, we’re seeing customers doubling and tripling their sales from previous years,” says Andrade. “And we’re drawing a lot of new customers — we’re reaching contractors in other areas who don’t have access to a supplier like us. We now ship to customers all over the country, and some even outside the country,” adds Andrade. “We see customers buying more products with each order; the system prompts related and complementary products, and we’re getting that add-on business. Customers now have access to pictures, descriptions, manufacturer links, MSDS sheets, installation videos and more. Our online sales year over year for the month of January grew 34%, and in February it hit 74% in 2018.”
Stay Connected to Customers 24/7
Successful distributors know that everything depends on customer experience during every engagement opportunity. And, more importantly, your customers have high expectations. Therefore, distributors are challenged more than ever on how they provide continuous service whether on the road or after-hours.
A connected ERP helps drive customer engagement at these times with innovative tools that provide mobile access, VMI and customer connected portals. These types of features give customers the ability to connect with their distributor of choice from anywhere at any time.
60% of high performing sales teams use a mobile sales app today, enabling these salespeople to double their sales performance and incite loyalty. Mobility also allows your sales team to be much more productive, serve customers with immediacy and authority, and streamline communications with the home office—resulting in more effective time with customers and increased sales.
Raising the bar on service can also impact your customer’s likelihood of switching suppliers. According to Forrester, 75% of B2B buyers around the world said they would buy again from the same supplier because of that supplier’s omni-channel capabilities.
To that point, one of the most effective ways to engage with customers is by offering a customer connected portal. A customer portal offers a private, secure site that enables businesses to share account-specific information with customers such as credit status, invoices, available rebates, product and order information, calendars, etc. It enhances customer relationships by providing complete 24×7 access to up-to-date information. The advantages of customer portals are convenience and relevance–they contain everything customers need in one online place (no need to navigate across multiple sites and logins). And, on a well-designed customer portal, your customers “see” only those products and services that are relevant to them (or the information you want displayed). Once again, the innovation comes in having this content directly connected to your ERP data, so customers can look back at orders, re-order, add new products, see account billing history and more. This self-service tool allows buys to manage their inventory with accuracy and immediacy, fueling customer loyalty.
Connect Your Warehouse and Operations
Poor inventory management is among the top reasons why small to medium sized businesses often fail. Businesses that lack a clear inventory management strategy typically exhibit a higher spend on inventoried items, leading to smaller profits and greater chances for business uncertainty. It is therefore necessary to perform the perfect balancing act between having too little or too much inventory.
Understanding the role your warehouse plays in your distribution strategy becomes critical. Are you building large, automated DCs with high volumes requiring complex order fulfillment functionality? Or, are you taking a different approach in changing times by putting DCs closer to customers, resulting in smaller DCs—the traditional sweet spot for and ERP connected WMS?
Connecting WMS to your ERP system alleviates the pain points of having multiple systems and inventory inaccuracies. A streamlined, system enables business owners to see detailed historical and real-time information that can be used for strategic and tactical planning, including capturing staff efficiencies.
“DDI System’s WMS solution has given us the ability to reduce the staff in the warehouse by 50% by utilizing the full features and capabilities of modern technology, making us much more efficient” says VP of Osceola Supply Jeff Hittinger.
Legacy Systems Are No Longer Being Supported By Technology Advances – Forcing a Disconnected System
One of the most common reasons why companies purchase an ERP system is because their existing legacy system simply isn’t worth the pain or expense, and a decision is made that it’s time to cut loose. We are increasingly seeing legacy systems that are no longer supported (or ‘sunsetted’) and thus have outstayed their welcome through stale functionality and increased risk of failure.
Old technology is often far more expensive to maintain than newer, lighter systems, from a general maintenance point of view. Additionally, as the system code or platform age, it becomes more difficult and more expensive to find a support team who is familiar with the outdated system.
Technologies such as machine learning, data analytics, the internet of things (IoT), are subsumed within modern software systems. These state-of-art technologies are capable of deciphering trends and patterns that allow companies to make better decisions and hence gain a competitive edge. To remain competitive and position themselves for growth, businesses need to use modern systems.
Distributors today require a software that is flexible and scale their business. A modern enterprise system can give you the edge in managing your customers, partners, and suppliers while analyzing trends and data easily.
With a modern platform, your customers will have seamless experiences such as one-click online ordering. And, your supply ordering can be foolproof, with fully automated electronic data interchange (EDI), among other benefits.
As a result, even small and mid-size distributors can compete effectively with the bigger players.
Empowering Teams Creates Long-lasting Customer Relationships
Effectively managing the customer experience results in decreased price sensitivity, stronger repurchase rates and increased customer referrals. In order to deliver a great customer service experience, employees need to understand what customers want, be educated and empowered to respond, and be supported by the leadership and organizational structures around them.
To achieve a high-performing team morale, ensure that employees have the knowledge and information they require to successfully execute their job function. A Customer Relationship Management (CRM) acts as a central repository for storing and managing data, providing employees with a single point of reference that is easy to access and simple to navigate. Certain roles, such as customer service representatives, can benefit greatly from this functionality, as they are able to locate the information they need, immediately, to answer customer inquiries.
Another key advantage to a system that provides customer insight to the entire organization is being able to step into a role, outside day-to-day activities. For Detroit Chemical, when the office manager took an unexpected leave of absence, the entire team was able to complete the daily activities required to run the business—simply because the information was shared across the board. Detroit Chemical’s Todd Radnik says “We always knew how much [she] did but we had no idea how much [she] REALLY did! Because of our ERP (Inform from DDI System), we were able to manage a very hectic time and all of us were able to step in to run the day-to-day operations.”
Rich CRM information native to your ERP enables customer service reps to upsell, offer product and service recommendations or take action on something that previously would have been impossible due to a lack of information.
At the end of the day, your business needs to function with optimal performance, insight and serve the changing needs of today’s customer. Finding a connected solution unifies operations to meet the ever-changing demands occurring in every industry. Technology implementations are no longer just an opportunity to change your systems, but an opportunity to transform your business with streamlined processes, centralized back-office functions, new service offerings, and a better understanding of profitable opportunities. Simply put, the days of a technology-focused ERP implementation have passed, and ERPs are now the drivers of digital transformation.
Jennifer Rosvally is the Director of Marketing for DDI System (Inform ERP). DDI System’s platform, Inform ERP, powers the most successful, progressive wholesale distributors in North America. Over 800 distribution companies use Inform ERP for a comprehensive view of daily operations, eCommerce, Customer Engagement Management, and Analytics. DDI System’s highly configurable, market-aware, distributor solution has the highest rated support, implementation and customer satisfaction among distribution-centric ERP systems.