Building a connected business is less about just plugging in a new technology and more about how you can use that technology to automate your business, optimize processes and power growth. As a result, NAED is committed to “Building A Connected Business For The Future”.
In 2019, the NAED Education & Research Foundation published an in-depth report, “Building a Connected Business,” which explores the industry’s transition to digital. The outcomes of the research, conducted by Frost & Sullivan, gave NAED members a roadmap for digital transformation informed by customer and manufacturer input. Since the publication of that report, a lot has changed. The pandemic accelerated digital trends that were already under way. Customer shopping and buying expectations have shifted. AI and other emerging technologies have made their way into the mainstream – widening the gap between distributors that have invested, and those that haven’t.
NAED has condensed that report into a an 18-page guide that is now available from the association’s Education and Research Foundation.
Over the past few weeks, tedmag.com provided you with 5 parts of the report to help you map out this critical journey of where you are today – and where you want to go. Part 1 looked at the challenges electrical distributors now face. Part 2 describes a more connected customer. Part 3 examined what customers want in a connected distributor, and part 4 told you about ways you can build a connected business with your manufacturing partners. Part 5 explains the need to be digital in the future.
The Digital Imperative
Channel partners and customers increasingly value distributors that can mitigate supply chain inefficiencies and better support the customer experience through digital capabilities.
Here’s why:
- Industry product and service innovations continue to accelerate.
- Customers are pushing for transparency at every link of the value chain, from inventory procurement to the customer shopping and buying experience.
- Suppliers will continue to leverage digital tools to interact directly with end-users.
The distributor’s call to action:
- Develop a framework that identifies digital transformation opportunities according to your organization’s needs, whether they are immediate or projected.
- Evaluate digital opportunities with strategic needs in mind.
- Assess the potential role of a consortium with NAED to meet needs that individual companies may not be able to tackle independently.Working together, electrical distributors can ensure the distribution channel’s viability long into the future.
Selecting and Prioritizing Technology
Understanding and prioritizing what solutions to adopt for a fully connected business isn’t always straightforward.
The foundation of a digital transformation to meet customer needs and manufacturer demands should include:
- Enterprise Resource Planning (ERP) optimization: ERP systems manage your day-to-day business activities.
- Customer Relationship Management (CRM) utilization and optimization: CRMs help you manage your customer relationships and collect customer data.
- Integrated Business Intelligence (BI) platform: BI platforms aggregate data from multiple sources to give you a holistic view of operations.
It’s critical to connect these foundational solutions, as well as integrate with supplier data so that you can efficiently extract value.
Leverage your connected systems and supplier data to:
- Automate business processes to save time and resources
- Gain actionable insights by using artificial intelligence (AI)
- Make decisions based on data analytics
- Optimize ecommerce
- Support Internet of Things-driven systems
It’s also critical to protect your company as it scales digitally. Proactive enterprise security at the start of the journey enables all digital opportunities. In addition, by investing in a secure infrastructure, you will avoid liabilities, a loss of customer confidence, and downtime.
Without a solid foundation, you will limit other digital opportunities. With the power of ERP, CRM, and BI behind you, adopt other value-add platforms.
After establishing these three core technology solutions, focus on optimizing:
- Warehouse management
- Fleet management
Additional capabilities can be layered as each new function is integrated into the organization. Examples include:
- eCommerce optimization
- BIM integration
- Construction Project & Materials Management (CPMM)
- Hiring platform
- AI-powered sales tools for a more personalized customer experience
- Streamlined project management
The following graphic provides a recommended timeline:
Those who can pursue Phase 2 priorities are industry leaders. While customers seek design support and product expertise, few distributors can deliver that today. Phase 2 priorities such as BIM integration and IoT design and implementation could differentiate you in customers’ eyes. B2B marketplaces can give greater scale.
Phase 3 opportunities may seem too far off to consider, but they have the very real potential to disrupt the industry. If you’ve leveraged Phase 1 and 2 solutions where they make sense for you, explore how automation and XaaS (anything-as-a-service) business models could help your business.
Customer-Supporting Technology: The Ticket for Entry
Customer-facing tools and platforms make workflows seamless. These will become the cost to play and compete in the future. Here are some examples:
- Inventory management or CPMM (Construction Project & Materials Management) to gather customer data and deliver a better experience
- Billing reconciliation and change order tools to simplify these processes
- Supply chain technology to increase transparency
AI can play a big role in mitigating contractor labor issues. For example, a digital platform can complete blueprint takeoffs for customers, which saves labor, brings the distributor in earlier in the process, enables better value engineering, and helps secure business due to familiarity with the job.
To increase customer satisfaction, collaborate with suppliers and software vendors to create more targeted products and digital platforms.
- Modular product design and pre-fabrication enable product fulfillment, which lowers job-site costs.
- Open protocols reduce system-integration challenges, increase supplier preference, and ease training complexity.
- Service to building owners/operators and product feedback to suppliers improve with increased use of digital platforms.
- Compliance with local electrical codes increases when distributors are involved in the bid-and-spec stage.
You can read more about the Building A Connected Business report and download a copy for yourself at www.naed.org/building-a-connected-business.
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