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Is Your Distributorship Drowning in Data? (Part II)

Is Your Distributorship Drowning in Data? (Part II)

In part I of this series, we talked about why your electrical distributorship is overwhelmed by data and how you can start using it to work smarter, better, and more efficiently in today’s changing business environment.


If your distributorship is due for a data lifesaver, now is the time to develop a strategy for selecting, assessing, and dissecting data and turning it into actionable insights that help your distributorship compete and grow.


Did you know that if you could store all of the world’s data on DVDs, then you would have a stack that could get you to the moon 23 times (or circle Earth 222 times)? And, if you could

download the entire 2025 Global Datasphere at an average of 25 Mb/s, it would take one person 1.8 billion years to do it? These statistics from IDC support a theory that most electrical distributors already know: We’re all drowning in our data, and we don’t really know how to put it to good use.

“As we head further into 2019, it’s become clear that the world is awash in data,” Sinequa’s Alexandre Bilger writes in Forbes. “Regardless of technological breakthroughs like artificial intelligence (AI) or increased investments in analytics, the exponential growth of structured and unstructured data is staggering to the extent that it has become nearly impossible for people who depend on information to keep up.”

Organizations are working with so much data from so many disparate sources and in so many different formats, Bilger continues, that it is creating a “tremendous cognitive burden on their knowledge workers.” It has also created a literal sea of data that organizations are drowning in as they try to “introduce innovative products, discover new drugs faster, keep up with volatile financial markets, improve manufacturing supply chains, and anticipate customer demands.”

You Can’t Measure Everything

In an age where you can literally measure everything, it’s easy to get caught up in a vicious cycle of gathering data, storing it on a server, and then never putting it to good use. And while not every piece of data is going to be useful, there are ways to figure out which points deserve your attention (or not). Mark McGready, CEO at Jigsaw Systems, Inc., in Philadelphia, says the first step is to determine which key drivers and metrics are most impactful for your distributorship.

Then, cull that list down to a few—10 or fewer, if possible—that really matter. “Limit those data points as much as possible,” says McGready. “There can be some variation based on different business expectations from one geographic region to the next—or from one business unit to the next—but everyone needs to be working from and paying attention to the same 10 or so different metrics. That has to be the focus.”

Realize that a single metric (e.g., gross margin percentage, inventory turnover, operating expense ratio, sales-per-employee, sales change percentages, etc.), may also have several sub-metrics under it. Sales revenues, for example, will be a key metric for all electrical distribution companies, but under that umbrella there may also be sales revenues per segment, sales revenues for a specific geographic region, and so forth. McGready warns companies about getting mired in these details, and tells them to stick to a simple data utilization approach.

“Otherwise, you’ll just wind up getting buried and having too many measures to deal with,” McGready says. “That usually results in data paralysis, or not knowing how to respond to or actually put the data to good use.”

Who Should be Involved?

If your distributorship’s data strategy doesn’t start at the top, then it’s probably not going to live up to expectations. Gregory A. Smith, VP of strategic accounts and partnerships at SPA, INC. | SPASIGMA in Cleveland, says senior leaders should be looking at the big picture, and asking themselves how data can help them:

  • Innovate current business models?
  • Increase wallet share with customers?
  • Learn more from non-traditional, online competitors?
  • Partner with those competitors?
  • Use more predictive sales activities that drive top-line sales?
  • Reimagine the supply chain so that they’re not only taking care of customers’ needs, but also anticipating those needs long before the customer even realizes that they need those products?

“These are things that senior leaders should be thinking about,” says Smith, “and using to create digital transformation roadmaps that incorporate data analytics as a core, strategic corporate initiative.” Getting there isn’t always easy, he admits, and particularly because many companies hand off these initiatives to IT or marketing departments. “And that’s where it dies,” says Smith, who tells distributors to get this aspect of their data approaches together before diving in.

“What companies need to realize is that this is a strategic corporate initiative that requires executive sponsorship,” he explains. “Without that support, it will never get the organizational focus and funding that it needs in order to be effective.”


It’s a Journey; Not an Event

When developing a data management strategy, too many distributors look at it as an event, or something that can be managed with a “one and done” philosophy. In reality, Smith says data is a journey that literally lasts forever. “Once companies accept this and start thinking this way, the whole dynamic changes,” says Smith, who adds that in most cases, cultural change is also in order.

An outside salesperson who for 20 years has been operating autonomously and working from monthly reports, for example, and whose activities are now being tracked, analyzed, and redirected on a daily or weekly basis, will probably need some retraining and guidance along the data journey.

“Right now, a lot of distributors are on a sort of ‘demographic cliff,’ with a fairly high percentage of senior leaders and veteran sales reps set to retire over the next 10 years,” Smith points out, noting that many of today’s senior leaders are looking through a lens of history, and not the lens of the future. “The biggest challenge distributors face is removing those lenses of the past and allowing ingenuity, innovation, and creativity to drive the future. What happened in the past isn’t the predictor of the future.”


In the third and final installment of this article series, we’ll give you solid tips for creating a data management strategy that produces results, cultivates happier customers, and helps your company compete in today’s marketplace.


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Bridget McCrea  is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.

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