An Electrical Wholesaling TakeFive! podcast posted this week at www.ewweb.com and sponsored by SAP offered a snapshot of some of the key trends that will shape the distribution industry in 2012. As the economy improves, look for distributors’ IT spending to increase in new ERP systems or updates, mobile computing, cloud computing and tools for distributors to optimize profits and pricing. Here’s a quick look at what’s covered in the podcast.
Healthy IT purchasing environment in 2012 in the electrical wholesaling industry. According to some recent EW research, distributors plan to invest in their ERP systems in 2012. Thirty-four percent or survey respondents — more than 100 distributors — in EW’s annual Market Planning Guide survey said they plan to invest in their IT systems of capabilities in 2012.
Mobile applications are transforming the industry. A survey of more than 300 senior executives published by Oxford Economics and sponsored by SAP, AT&T, Cisco and Citi said more than 50 percent of respondents believe in the next few years mobile technology will have more impact on their businesses than cloud computing, social media or new software used to collect and analyze business intelligence. These findings match up with data from EW’s 2011 Top 200 survey, where 56 respondents said they already use tablet computers such as iPads in their business, and 51 more said while they or their employees weren’t using tablet computers right now, they would be purchasing tablets for their businesses within the next 12 months. Customers in the construction business appear to be all over tablet computers, too, and according to a recent article in Engineering News-Record magazine, some of the more progressive design firms store project plans and related documents on the cloud so all employees and subcontractors can work off the same set of plans in real-time.
Look for an article in next month’s issue of Electrical Wholesaling on an intriguing tablet application for the electrical market developed by John Hoelz, president of J.F. Nolan & Associates, an independent manufacturers’ rep based in New Berlin, Wis. Hoelz recently started up a new company, RepFiles, to market a new content management system designed to help salespeople use tablet computers to organize and maintain electrical manufacturers’ product data files, spec sheets and videos so they will be on-hand at all sales calls.
More distributors are picking spots where cloud computing makes sense. At a panel presentation at last month’s NAED Eastern Conference, there was an interesting discussion between several distributors who moved to Google Docs. Some of the companies also store and share these files and other data via Drop Box and other software programs that allow users to store their work remotely. The major ERP providers for distributors, including Activant/Epicor, Infor and SAP, all utilize the cloud to some degree in their software offerings, and as electrical distributors get more comfortable with storing confidential data offsite on the cloud, look for more distributors to move some information to the cloud in 2012.
Growing interest in software packages that improve inventory turns and enhance transaction profitability. EM’s editors are hearing more about how electrical distributors use companies like DataAlliance and Epicube to optimize their inventory and pricing. DataAlliance has been a player in vendor-management inventory in the electrical wholesaling industry since 1991, and the company says it now offers an expanding range of collaborative sales and inventory optimization services.
Epacube helps distributors enhance profits by providing services like data synchronization and pricing optimization and is now working with Trade Service Co. to offer Margin Optimizer, a “cloud-based” margin optimization solution. Trade Service now provides a “cloud-based” version of Epacube’s Gross Margin Modeling solution on a subscription basis as part of its eDataFlex family of product and pricing services.
SPAs, or special pricing authorizations, are a major headache and can be a paperwork nightmare and they are receiving a lot of focus from ERP providers, too. SAP will be airing a podcast with EW that will explore how Graybar Electric used its SAP software to enhance its margins by streamlining its SPA process.