Are you all-in? IDC urges consistency in distribution technology investments
February 10, 2017When it comes to a successful technology strategy for modern distributors, there’s no substitute for consistency. That’s why IDC Manufacturing Insights, in its newly-released Wholesale Distribution 2016-2017 Investment Guide, is so emphatic about the investment roadmap that will help companies weather an intensely competitive business environment.
“For wholesale distributors to be optimistic in improving margins and revenue opportunities, they must combine new services and offerings with capital investment in technology,” IDC advises.
But those investments won’t work if they’re just a series of one-off expenditures. “To truly capitalize on the benefit potential, the commitment and investment must be consistent, rather than taking the approach of investing one year and neglecting to nurture and grow the investments subsequently.”
In its survey of CIOs and IT business leaders with 146 US-based distributors, IDC picked up a largely positive short-term outlook, tempered by concerns about future challenges. The analysts pointed to technology investment as the key to quelling those longer-term worries.
“We would view investments made over the next 12 to 18 months as critical to the long-term positioning and overall health of the wholesale industry,” the report states. It cites increasing revenue (32.8%), boosting productivity (31.5%), cutting costs (26.5%), improving customer acquisition and retention (24.2%), and optimizing business processes (22.3%) as the most important business initiatives driving IT investment.
And here’s the good news: Although distributors haven’t always been early adopters in their technology investments, IDC sees the pattern shifting.
“The overall sentiment of how the wholesale industry invests in modernization of business process and IT is beginning to shift, with more wholesalers investing in modern technology such as cloud and analytics,” the company reports. “While not necessarily at the pace of other industries, the increased spending and perceived importance of these areas is displaying an industry that has recognized the need to catch up with other industry segments.”
Read more about IDC’s Wholesale Distribution 2016-2017 Investment Guide.