Wholesalers Need to Invest in IT to Remain Competitive

A study recently put out by the National Association of Wholesaler Distributors, written by Guy Blissett, offers insight to wholesalers and distributors looking to gain and maintain success in our uncertain economic environment.  A main theme in the report is that wholesaler-distributors must perfect skills that will ultimately make them stand out from their competition in our hypercompetitive business environment.  One suggestion proposed by the report is for wholesaler-distributors to examine and improve their current IT strategy.


The report emphasizes that investment in information technologies (IT) is crucial for future success of any wholesaler-distributor business.  To ensure future growth of their companies, IT function must be increased, ultimately creating a bold, new IT strategy that will help business owners determine how they should invest in the IT infrastructure and capabilities of their companies.  Generally speaking, it is quite common for wholesaler-distributors to have inferior IT infrastructures than the majority of their competition, their suppliers, and their own customers, which means that their IT systems are often unable to keep up with the demands of their customers, suppliers, and the supply chain.  Obviously, this trend must change if wholesaler-distributors wish to create a suitable niche in the supply chain that differentiates them from their competition.  


Although the above is true, IT is not completely non-existent in wholesaler-distributor business operations.  For some wholesaler-distributors, IT has already begun to play an important role in the way their business is operated.  Key IT functions and new trends in IT strategies include automating low-value, performing repetitive activities, increasing visibility into and across the supply chain, and creating a common, more updated view of the business.  These functions act to essentially free resources for more valuable activities, decrease the occurrence of errors and rework, an increase the effectiveness of the decision-making process.  Leading wholesaler-distributors and those who wish to rise in the ranks need to employ and familiarize themselves with new IT trends if they wish to build a lasting competitive advantage for their business.  A few examples of new information technologies and business trends include, but are not limited to, cloud computing, offering software as a service, infrastructure hosting and outsourcing, virtualization on the web, social networking, location-based services, and the introduction of novel forms of collaboration and information sharing online.


In conclusion, it is clear that it is necessary for wholesaler-distributors to focus on improving their IT strategy.  Any expenditure in this area should be viewed as a substantial investment for future success and an increased ability to compete in the market.  Deciding how to invest in IT should be done with careful consideration and proper planning; however, one should not employ risk aversion-based decision making and should also not be overly cautious.  Any strategic investment requires some amount of risk and uncertainty if a significant benefit is expected to be gained.  The wholesaler-distributors who focus on building a flexible, insightful organization based on strategic investment in IT will be the ones who differentiate themselves from the toughest competition, ultimately setting their business up to succeed in the ever-increasing volatile state of our economic environment.

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25 Apr 2012

By Jennifer Cullin