The back office no longer is located strictly in the back office.
Manufacturers of distribution-targeted enterprise resource planning software say the ability to access back-office-related information from anywhere is one major trend that continues to gain momentum in the space.
“ERP systems are becoming extended business infrastructures and competence in ‘standard’ ERP capabilities is being assumed,” EpicorDistribution Product Marketing Manager Mike Goeke says. “The exciting investment spaces that are affecting our distributors’ business models are mobility, e-commerce and the cloud. As time passes, we feel the rich content to populate these delivery vehicles will become critical.”
Houston-based Mincron has first-hand knowledge of what PHCP-PVF distributors are going through in terms of software infrastructure needs. Sales Director Brent Tippett (formerly of Plumbing Distributors, Inc.), along with sales executives Terry Dotson (formerly of United Pipe & Supply) and John Haynes (formerly of Keidel Supply) have a combined 70-plus years working at industry distributors.
And Mincron executives also are seeing a greater emphasis placed on accessing information on the go. “More and more work is going to be done via apps on personal devices such as smartphones and tablets rather than desktop PCs and laptops,” MincronDirector of Product Development Greg Neal says. “While that is not groundbreaking, there is a prevailing thought that the work of the future will mostly be done on personal devices that will allow much greater flexibility and access for users.”
A recent survey by Infor and third-party research organization TechValidate shows 43% of respondents plan to invest in mobile applications. “Equipping users with mobile access can help promote greater workforce productivity by providing visibility into data at any time from a Wi-Fi/Internet-enabled location or device,” Infor Distribution Industry and Solution Strategy Director Kelly Squizzero says. “This can be particularly influential for employees who frequently are on the move, such as account executives or warehouse managers.”
Reach for the clouds
The Infor survey also reveals 40% of survey respondents are very likely to consider investing in a cloud solution during the next 12 months, while 32% of companies that responded currently are hosting technology in a cloud environment. An additional 14% confirmed plans to transition away from on-premise applications.
“The cloud has become a reality,” Squizzero says. “It’s not just for the edge applications where many customers tested the waters, but more and more frequently, wholesale-distributors are placing critical applications in the cloud and enjoying the ease of expansion, constant innovation, low total cost of ownership, low capital expenditures and the freeing up of IT resources for other important business activities cloud solutions offer.”
DDI System Chief Operating Officer Barbara Jagoe says the presence of the cloud no longer qualifies as a trend. “It’s the way of the future,” she says. “We are seeing and creating more connections to the cloud, more connections to leading sales channels and an increased e-commerce presence.”
ERP software manufacturers are making sure e-commerce solutions are part of their product offerings to customers and with good reason. In that Infor survey, 57% of distributor respondents plan to invest in e-commerce solutions within the next 12 months and 44% cite online sales as an important driver for business growth.
“And then there is the global economy,” Mincron’s Neal says. “As cell networks and personal devices become more prevalent around the globe, businesses will start to compete to sell to anyone regardless of where they are.”
But DDI System Director of Marketing Rayna Naclerio says e-commerce is becoming much more involved than simply creating an e-commerce website. “As online shopping habits continue to increase, distributors are looking for ways to reach these customers,” she says. “These ways include building and maintaining their own storefronts and customer account portals, selling amongst giants such as Amazon and Overstock, and doing so without duplicating tasks. The latest ERP tools integrate storefronts and link to these online sales channels — thus improving visibility and positively impacting bottom lines.”
More ERP trends
Mobility, the cloud and e-commerce aren’t the only requests distributors have on the ERP front these days. System customization ranks right up there, as well.
“People in different roles in a company have different needs,” Exact Macola Director of Product Management Dan Griffin says. “A CEO cares about different things than an accountant or an IT person or someone on the shop floor. They want different views into different types of data.”
Exact Macola Product Manager Dave Dozer expands on Griffin’s thought as it pertains to companies with multiple locations. “You are seeing a move to more multi-site and even multinational locations,” he says. “As small- and mid-size businesses continue to grow there is more of a need to support those kinds of setups.”
Epicor’s Goeke calls the customization aspect “a significant problem” in the distribution space. “What we hear a lot is systems are too rigid and cannot be adapted to a distributor’s specific needs,” he says. “Distributors who are replacing ERP systems say their current system won’t let them do what they need to compete for today’s customers.”
And competing for business in today’s distribution environment means mastering customer service. Thus, it’s no shock distributors are looking for that same high level of service from their ERP provider.
“The other big issue of concern distributors often share when inquiring about a new system is the level of support over the long-term,” Mincron President Wendy Berger says. “We are living in a fast-paced, 24/7 world where Google provides any information you want in seconds, delivered on whatever device is most convenient at the moment. In that same regard, distributors often give much of the credit for their success to the level of service and personal availability they offer their customers, so they rightfully expect the same treatment from their software provider. They don’t have time to wait when there is an issue with what is basically the command center for their company.”
This article was originally titled “On the go” in the April 2016 print edition of Supply House Times.