green Business and the Growing Role of Government Conclusions II

The more complex value proposition and business case of many green business opportunities will demand a more consultative sales approach.

Distributors looking to turn the trends to their advantage will need to consider the following:

1. Building a deep understanding of the the underlying issues and drivers in both green business and government opportunity areas, positioning themselves as knowledgeable, trusted business advisers to customers and suppliers.
2. Integrating green business into their broader business strategy investment plans and human capital strategy.  The more complex value proposition and business case of many green business opportunities will demand a more consultative sales approach.
3. Work with trusted advisers, trade associations, government representatives, accountants, and peers to deepen knowledge of relevant existing legislation and regulations. 

ACTION POINT: Invest the time and effort into understanding the effects of trends on your business and market.

Green Business and the Growing Role of Government Conclusions

Each trend presents a host of real challenges and a wealth of potential opportunities for distributors,

Looking ahead, green business and the growing role of government will continue to gain momentum and have an impact on wholesaler-distributors.  The myriad green business segments have gained a critical mass and sufficient acceptance to be considered mainstream, and the role of government are sufficiently important and topical to warrant inclusion here.

Each trend presents a host of real challenges and a wealth of potential opportunities for distributors, both within their own organizations and with customers, suppliers, and markets.  Therefore distributors must stay abreast of these trends and their drivers and consider their impact on strategies and operations under various scenarios.

ACTION POINT: Look for opportunities within the green business segment and understand the role of government in your industry.

The Expanding Role of Government

government expansion is widely perceived as a drain on the overall economy, absorbing capital and stifling growth. 

Around the world and across industries there is a widespread perception that government has and will continue to plan an expanding role in business and society.  In some instances, this expanded role stimulates demand, mitigates risk, and removes uncertainty and ambiguity; having a positive impact on the economy.  Indeed, a number of distributors have reported growth in their government-related business.

However, these examples are limited.  Because of the expanding payrolls and budgets that come along with it, government expansion is widely perceived as a drain on the overall economy, absorbing capital and stifling growth.  The areas that wholesale distributors will most likely feel the government's role are:

• Environmental and safety regulations
• Immigration and labor
• International and domestic trade
• Stimulus, taxes, and tax incentives

ACTION POINT:  Understand the growing role of government and it's impact on your business in the areas above.

Green Business

Growth in this area is not limited to the electrical and industrial sectors; 

For distributors, green business represents two opportunity areas, each of which requires due diligence and planning to realize potential benefits, but which can also deliver incremental revenues and profits.

The first opportunity is in capturing a share of the rapidly growing market for green products and services.  Growth in this area is not limited to the electrical and industrial sectors; it carries over into practically all other lines of trade.  The other opportunity is for distributors to look internally at their assets, operations, and processes to identify sources of waste, inefficiency, and non-value-added cost.

ACTION POINT:  Look for green opportunities, both inwardly and outwardly.

A Slowdown in Commodity Prices

it is a challenge to talk with any credibility about the direction of commodity prices. 

Even during the most stable and predictable of times, it is a challenge to talk with any credibility about the direction of commodity prices.  The economic downturn coupled with a far more complex, unpredictable and volatile economic environment now makes such predictions and trend analysis a truly daunting proposition with very limited potential for making accurate forecasts.

The world's economies and the underlying markets are more closely integrated than ever, as evidenced man made and natural environmental crisis such as the Gulf oil spill and the Japanese Tsunami, The European debt crisis and the out sized role the Chinese appetite for commodities and raw materials plays on global prices.   If there is one word that best captures the "trend" in most commodity categories it is "volatile."

ACTION POINT: Be prepared to move fast in an environment of volatility.

The Changing US Workforce

Going forward distributors should consider how these trends affect your business and the markets you serve.

Four primary characteristics were reported on in 2007 on the broad trend of the the changing US workforces, they were:

• It is aging.
• There is slower labor force growth.
• The workforce composition is shifting.
• There is more diversity.

Going forward distributors should consider how these trends affect your business and the markets you serve.  What will happen to your customer and supplier base over the next 10 - 15 years?  Distributors should also evaluate how their workforce strategy is tied to your overall business strategy.  Finally, they should consider recruiting, development and retention plans that reflect and adjust for these trends.

ACTION POINT: Look deeply at your where your work force is and where it needs to be in light of these trends.

A Quick Look Back: Previous Emerging Trends

 it helps to consider past predictions and the factors that influenced their alignment or divergence with actual events.  

In looking at and prioritizing today's trends, it helps to consider past predictions and the factors that influenced their alignment or divergence with actual events.  The three emerging trends highlighted in the 2007 Facing the Forces of Change report were:

1. Acquisition activity
2. The changing US workforce
3. A slowdown in commodity prices

Acquisition Activity:

While credit markets loosened somewhat, they will likely remain tight as banks, businesses, consumers, and governments each look to reduce debt levels and the various credit rating agencies seek a modicum of redemption via more rigorous analysis and conservative ratings of borrowers and transactions.  That said, mergers and acquisitions will continue--the strategic imperatives driving consolidation are simply too strong.

ACTION POINT: Going forward distributors should carefully consider what role they intend to play in industry consolidation, ensure the alignment of their business and investment strategies--including capital budgets and information technology budgets, and their human capital strategies, and continuously explore merger, acquisition, or other joint venture partnership/options.

Capitalizing on Key Trends

These trends are more relevant than ever to wholesale distribution--both in terms of opportunities and challenges...

Given the lingering amount of uncertainty, unpredictability and volatility in the global and domestic economy, making predictions of any sort is likely to be a risky proposition.  However, two trends that appear to have sufficient breadth and depth to maintain their relevance to wholesale distribution are as follows:

1. The continued expansion of the broadly defined "green business segment," including renewable energy generation; energy efficiency; carbon and water efficiency; waste reduction; recycling; and, the food sector organics and sustainability.
2. An expanded role of government in areas such as environmental, labor  and safety regulations; internationals and domestic trade; and of course, taxes and tax incentives.

These trends are more relevant than ever to wholesale distribution--both in terms of opportunities and challenges--and therefore must capture a share of management's attention and investment going forward.

ACTION POINT: Capitalizing on these trends now can help distributors gain a substantial competitive advantage down the road.

CRM Considerations II

"Why are we doing this?" 

Some other things to consider for any CRM project include:

Create a CRM business case that answers the question: "Why are we doing this?"  The business case:

• Identifies areas with the highest ROI potential
• Defines metrics that will be used to assess performance
• Provides the justification for moving ahead
• Defines the framework for prescribing, supporting, and monitoring subsequent actions.

Identify and prioritize the CRM value proposition: "What business benefits can we expect from CRM projects?"

Design a CRM operational "blueprint" that answers the question: "What is the desired end state for this phase of the journey?" The blueprint:

• Defines the resulting stakeholder experience
• Allocates resources
• Describes how the IT infrastructure will be built and how processes will be designed.

Construct a long-term road map for implementing CRM solutions.  This should answer the question: "What will we do and when?"  and convert the "blueprint" into a prioritized sequence of projects/initiatives.

Build and maintain support for the company's CRM efforts, and stay on course.  

ACTION POINT: When implementing CRM ask the question "Is everyone committed and are we aligned?"  and address ongoing sponsorship, governance, and change management.

CRM Considerations

CRM systems are highly strategic and potentially disruptive--therefore they require careful consideration.

Given the high-profile they play in the organization and the changes they will likely drive in the behaviors of sales-force and customer-service personnel, investments in CRM systems are highly strategic and potentially disruptive--therefore they require careful consideration.

Distributor managers should explore the implications of change management (that is, the impact the implementation will have on individual responsibilities, roles and job tasks) when investigating such a system.  This information coupled with an understanding of individuals' ability and willingness to change, will form the basis of a change management plan that must accompany any CRM project.

ACTION POINT:  Understand the behavior changes that must accompany any CRM project.

Pushing Beyond E-Commerce

this starts with the features and functionality of their website.

A robust, intuitive, highly functional web presence is already an important sales channel for most distributors--and an increasingly central component to their marketing, customer service, and communications activities.  Yet, as mentioned earlier, many distributors indicate they are "not easy to do business with."  In many cases, this starts with the features and functionality of their website.

Today's websites must be well developed, information-rich, and equipped for e-commerce and online customer service.  The most basic expectation is that a distributor's website facilitates the quick and accurate completion of various transactions (such as sales, returns, discounts, rebates, and application of payments) via an intuitive interface.  Automating these tasks is is essential to improving response times, reducing errors and assuring reliability, which collectively creates differentiation for the distributor.   The e-commerce experience should provide other functions, such as advanced product search; an easy-to-navigate product catalog (one that provides specification, images, schematics, price, and performance information, ready access to order history, and status; updated material safety data sheets (MSDS) where applicable; and multiple "contact us" options via e-mail, chat, or phone.

ACTION POINT:  Use your website to automate and enhance the customer experience.

Empowering the Sales Force

Distributors can achieve these goals with SFA (Sales Force Automation) applications,


Supplier’s expectations concerning the availability of downstream information are increasing—a situation that demands more from the wholesaler-distributor’s sales force. As a result, the sales force’s ability to monitor, capture, and communicate customer activity and inventory levels—and report on local market conditions and trends—is becoming more and more valuable.

Distributors can achieve these goals with SFA (Sales Force Automation) applications, which also enhance their ability to ensure that their own sales force and any agents have the latest information about products, prices, promotions, order status, order history, credit quality, and market conditions.

Assessing sales force productivity is also viewed as the most important activity among distributors. Given the premium customers place on receiving value from their supplier, it is incumbent upon distributors to provide their sales force personnel with the tools and techniques they need to excel in their jobs and to measure their effectiveness and efficiency.

ACTION POINT: Identify the technology tools that will equip your sales team with the latest information and track their productivity.

Getting Close to the Customer

They are looking for distributors to provide deep product knowledge and market insights, custom solutions, and differentiated services.


Today’s customers expect their distributors to deliver value with every “touch.” They are looking for distributors to provide deep product knowledge and market insights, custom solutions, and differentiated services. Today, customers are far less tolerant of poorly planned or executed sales calls that do not focus on their objectives.

Unfortunately, too many distributors will readily admit that they are “not easy to do business with”—a perilous situation in today’s hyper-competitive environment. Distributors must focus on three key things:

• Leveraging the data they collect from each of the various customer “touch points”
• Empowering the sales force and customer service functions with customer relationship and sales force automation software applications
• Creating a web-based extension of the organization’s physical presence.

ACTION POINT: Use data, technology tools and organizational web presence to get closer to your customers.

Getting Closer to Customers

...customers expect customer-facing personnel to quickly access, integrate, and share information and insights...
Distributors agree that “getting closer to customers” is a top priority in the next five years. Achieving that goal takes on new meaning in the information technology age. Customer preferences about how, when, where, and why they want to interact with distributors continue to evolve.


In response, distributors must adapt the communication options they make available to customers. While face-to-face interactions will continue to play a central role in distributor-customers relations, information technology can bring opportunities into focus by removing transactional issues from the agenda. This will allow sales and customer service resources to focus on value-added topics, such as understanding customers’ needs, defining new services, prioritizing market opportunities, and aligning forecasts and plans.

In this environment, customers expect customer-facing personnel to quickly access, integrate, and share information and insights—about the relationship, customer product and delivery preferences, pricing, sales volumes, and other important issues.

ACTION POINT: Deliver value over and above products and services via insights and information.

Managing Complexity

"When things look very simply, you to need to look for competitive edge. When things are complex, you simplify to get the competitive advantage."



The growing complexity of products, the supply chain, and even transactions (with discounts, tiered pricing, rebates, promotions, and other incentives) demands that wholesaler-distributors leverage a robust, flexible, scalable, highly functions IT infrastructure. Yet many distributors continue to utilize homegrown or aging packaged applications that lack the functionality required by e-commerce, cost-plus pricing, sales kitting, back-order rejection, and catch weight in purchasing--to name just a few.



In today's competitive, efficiency-focused environment, distributors must manage complexity by reducing it through simplification--and by employing tools and technology to capitalize on the remaining complexity. The thoughtful application of information technology plays a central role in realizing both objectives. As it was recently put, "When things look very simply, you to need to look for competitive edge. When things are complex, you simplify to get the competitive advantage."

ACTION POINT: Strive for simplicity.

Assessing the Business Case for IT

Ensuring ongoing, close alignment between business and IT strategies is an increasingly critical mandate 

To evaluate the myriad technology options available, distribution managers must embrace a structured analytical approach and have a deep understanding of both the company's business strategy and its current and future business requirements.

Ensuring ongoing, close alignment between business and IT strategies is an increasingly critical mandate for distributors' businesses, and one that requires the attention and commitment of senior leadership.

ACTION POINT: Align your IT and business strategy.

IT opportunities, Trade-offs and Costs III

These actions are appropriately viewed as strategic and differentiating. 

A large number of distributors are either in the midst of, or actively considering, significant investments in their IT infrastructure--focusing on capturing next-generation benefits such as process and asset optimization (not just automation), and accelerating top-line growth.

This is evidenced by distributors strong interest in ERP implementations and upgrades; planned upgrades to warehouse management systems (WMS), customer relationship management (CRM) systems and numerous announced upgrades to e-commerce websites.  These actions are appropriately viewed as strategic and differentiating. 

ACTION POINT:  Advance the role of IT beyond cost reductions and operating efficiencies.

IT Opportunities, Trade-offs and Costs II

Now is exactly the time for distributors to consider bold decisions and prudent investments. 

Distributors remain under intense financial and competitive pressure, and these pressures are encouraging them to focus on realizing additional operating efficiencies, better aligning expectations with customer and vendor forecasts and plans, and increasing product and service profitability.

Now is exactly the time for distributors to consider bold decisions and prudent investments.  The economic recovery may be characterized by persistent volatility; uncertainty, and unpredictability, but it is these dynamics, coupled with increasing business complexity, that drive the need for a robust, agile IT infrastructure.

ACTION POINT: Given the high levels of complexity in their operations, distributors must look to reduce it where necessary, and capitalize on it when possible.

IT Opportunities, Trade-offs and Costs

a narrow perception that fails to realize the full value of IT

Initially, companies leveraged IT for its efficiency-related benefits--automating and standardizing process and work flows to reduce costs.  Many took advantage of IT's additional benefits to trim headcount and inventory, reduce errors and rework, accelerate process cycle times, and improve supply chain visibility.

Nonetheless, some distributors continue to view IT only in terms of boosting efficiencies and trimming--a narrow perception that fails to realize the full value of IT, including it's ability to act as a catalyst to transform the business.

ACTION POINT:  Expand your view of IT's possibilities to impact your business.

The Transformative Role of Information Technology IV

...now is not the time for undue caution or risk aversion.

As with other investments, IT expenditures require careful consideration and planning.  However, now is not the time for undue caution or risk aversion.  As long-term, profitable growth again becomes a realistic expectation, distributors must priortize strategic investments in IT.

Those that create an agile, insight-driven, differentiated organization will be best positioned to thrive in our increasingly complex, volatile, and unpredictable economic environment.

ACTION POINT: Focus on and invest in the areas that create agility, insight and differentiation.