Delivering for Best-in-Class Wholesaler-Distributors
August 15, 2019  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow

In my research for Innovate to Dominate, the 12th edition in NAW’s Facing the Forces of Change® series that is coming to you in November, many of my conversations with distributors were about one of the hottest forces of change — artificial intelligence. Often, distribution leaders talked about artificial intelligence as a software solution that distributors might implement as a best practice for improving profits or sales productivity. For example, distributors may implement pricing tools enabled by artificial intelligence to achieve smart pricing to optimize profits or to suggest products as sales priorities to improve account productivity.

At its core, this approach is about adopting artificial intelligence applications designed by others. In a perfect world, solutions sold by vendors will focus distributors on the most powerful best practices, leading to the best possible results. But, some of the leaders I interviewed expressed a concern. They worry that because distributors do not have a deep understanding of artificial intelligence fundamentals — how it works and what it can do — they are leaving the hard work to others and accepting what others believe is possible. These leaders worried that the easiest path might not be the best path.

A recent article in MIT Sloan Management Review, “Using AI to Enhance Business Operations,” provides a road map for distributors to follow. As the article explains, companies that successfully create value around reducing costs and / or generating new revenue possess five crucial capabilities:

  1. Data science competence
  2. Business domain proficiency
  3. Enterprise architecture expertise
  4. Operational IT backbone
  5. Digital inquisitiveness

The point is this: If you want to leverage artificial intelligence to achieve game-changing results for your business, or if you want to truly differentiate your distribution business from your competitors, you must do the hard work to master these five capabilities.

Once your business has succeeded with these capabilities, you may choose to build your custom applications, or you may engage vendors or academic partners to build applications for you. Either way, you will have proprietary tools designed to be highly effective for your business. Or, if you choose to adopt the tools offered by vendors and used by other distributors, developing the five capabilities will ensure that your people are as smart as possible in the way they use the tools. In all cases, sustainable differentiation is only possible if you have deep knowledge of artificial intelligence in your business. Winning is hard work, as it always has been.

COMING VERY SOON!

Innovate to Dominate will provide a comprehensive road map for distributor innovation. If you want to be at the head of the line to preorder Innovate to Dominate, submit this form.

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Channel Innovation to drive awareness, advocacy and excellence for channel innovation, and to enable an exchange of ideas between channel leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve channel excellence across a wide range of industries in developed and emerging markets.

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