Just as distributors grapple with the compounding threat of expanding customer demands, intense competition, and growing regulatory pressure, tech-driven giants like Amazon are also piling on the pressure.

How can distributors, using traditional strategies and systems stay ahead of the race? How can they drive innovation, if their organizational culture is still deep-rooted in outdated processes, and legacy systems?

For distributors to successfully enhance their exposure in the market and gain an edge in terms of speed and efficiency, digital adoption is a must. Yet, more than 84% of companies fail at their digital transformation efforts. With so many technologies, so many processes, so many departments, and people to pull into the process, it is natural for it all to break down.

Here are some of the key digital adoption challenges for distributors, and how to solve them:

1. Changing relationships: One of the primary obstacles to moving forward on the road to digital transformation is the state of changing relationships between manufacturers, distributors, and customers. Although many distributors adopt technology to automate processes, they still lack the agility required to react to market fluctuations. If you’re always over (or under) stocked, if your competitors are getting to customers faster, or if you’re failing to meet the needs of your customers – you’re in dire need of digital adoption. You must set the digital adoption ball rolling to set yourself apart from the competition and strengthen customer relationships. The focus should be on personalizing your services and pricing, customizing product information and content, and building more integrated relationships with your manufacturer, suppliers, and customers.

2. Legacy PIM strategies: The dreaded legacy systems — don’t you wish you didn’t have to deal with them? Although an integral aspect of most distributor organizations, legacy PIM strategies and systems are a major obstacle on the road to digital adoption. Because technology is constantly improving, you need to rebuild or rehost or retire systems that restrict you from driving innovation and adding real value. Real success in a digital world comes to those who cross the chasm. Your systems should allow your customers to easily find products, derive exactly the information they want, request quotes, and place orders. So, invest in systems that have the capability to personalize experiences, display customer-specific content and pricing, and offer anytime access to product specs: from quality pictures, product videos, reviews, specifications, and more.

3. Outdated distribution processes: Old structures, out-of-date procedures, and rigid workflows make the adoption of digital technology a huge task for distributors. Direct store delivery, manual inventory inspection, and just the lack of automation will result in time-consuming and error-prone results. These can delay time-to-market, and impact customer experience. To move towards a digitally-enabled hybrid distribution model, distributors need to adjust workflows and business rules, and leverage product data in more innovative ways than were originally envisioned when systems were built. If customers are expected to fill up forms, review and shorten them, or remove them altogether. If there’s a login process, make it quick and simple. If you want to encourage customers to purchase, make it extremely straightforward for them to access the relevant product information. Make payment a breeze; accept the most common payment methods.

4. Lack of business-IT alignment: Another major hurdle that comes in the way of digital adoption for distributors is poor business-IT alignment. Success comes only when all IT initiatives are in line with the requirements set by your business functions. It is important that you meld knowledge, skills, and resources of these seemingly disparate silos. It is important for distributors to understand that it’s no longer a question of if they are going to use technology, but rather how, when, and how quickly can they do it – to forecast market needs, create the right engagement, and maintain product information consistency and integrity. It is also important to have leaders who can embrace the risk-taking required to transform operations and adopt an ongoing culture of innovation. Another key ingredient is a workforce that is engaged every step of the way in the transformation agenda.

5. The challenge of integration: Most distributor organizations have culturally been built around certain technologies, with specific policies and procedures developed to support them. Integrating new technologies or seamlessly interfacing with the systems of the manufacturer partners is a challenging task. Poor and clunky integrations often cause delays. Time is lost as information falls into cracks. It’s also painful to secure buy-in from employees, train them, and get them accustomed to new tools, technologies, and techniques. There’s also the challenge of multiple data silos. This may result in duplication of work and confusion between groups. Distributors need to have the right infrastructure in place to implement and scale modern applications, and also centralize data without compromising data management access and security.

Understand the drivers

As digital technologies revolutionize businesses, it is imperative for distributors to transform every aspect of their business – from internal processes to external relationships – to survive and thrive.

The stepping stone to any digital transformation is understanding the drivers so distributors know where to focus their time and resources. Digital is the future, and the future is here, businesses that fail to adapt are likely to fall by the wayside.

Successful digital adoption involves meaningful user adoption, the use of modern systems, updated processes, strong alignment between business and IT, and an infrastructure that is integration-friendly. It’s important for distributors to not overlook the digital adoption challenges. Once you understand the causes you can work towards building solutions to overcome them.

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