With the incredibly wide range of cloud and on-premise software solutions available to companies today, the enterprise technology landscape is not as clear-cut as it was years ago. Companies are now faced with critical decisions, balancing long-term strategy with an immediate need to meet demand for increased efficiency and effectiveness.

In the wholesale distribution space in particular, businesses are reassessing their “one-size-fits-all” legacy systems, and they’re beginning to think about how new classes of software can impact their operations––and profits.

Gaps in ERP Functionality

Ten years ago, if you asked a wholesale distributor, “What enterprise technology are you currently running your business on?”, they would almost certainly have given you the name of their Enterprise Resource Planning (ERP) system, and that would have likely been the end of the conversation.

This scenario is probably still true for many wholesalers and distributors today, but companies are increasingly beginning to realize that their ERP systems are falling short of key business needs.

ERP systems have long been touted as “all in one” solutions, with functionality for accounting, invoicing, human resources, logistics, order management, and more. Among this enormous suite of tools, some tools are able to meet the business’s unique needs while others don’t quite do the job as well as the company would like.

A recent Wholesale Technology & Sales Survey found that only 5% of respondents (self-designated as wholesalers or distributors) do not currently have an ERP system in place. As mentioned earlier, the fact that the vast majority of wholesale businesses are using an ERP to run their businesses shouldn’t be too surprising. What’s interesting, however, is the number of survey respondents who are also considering other classes of software in addition to their ERP.

Take order management, for instance. While many ERP systems do include order management functionality, survey respondents cited order writing efficiencies as their number one order fulfillment challenge. Indeed, 45% of respondents are still utilizing outdated, manual methods of order writing, like paper forms, fillable PDFs, and Excel spreadsheets.

While ERP systems remain the backbone of back office operations, the technology was ultimately not built for both the needs of both back office and front-line sales processes. According to the survey results, 31% of respondents have adopted third party order writing software to fill these gaps and combat inefficiency.

Businesses are figuring out how they can supplement their existing legacy systems with other types of third party best-of-breed solutions as well, including B2B eCommerce platforms, email marketing software, and more.

Enterprise Technology & The Best-of-Breed Transition

It’s clear that ERPs can’t do everything, and people are acknowledging that the old “one-size-fits-all,” “all-in-one” model isn’t working anymore.

While wholesale distributors won’t be eliminating their ERP systems anytime soon, they are figuring out ways to integrate them with third party cloud solutions. This approach can add functionality and support specialized business processes, without losing visibility or creating cumbersome information silos.

Some of the advantages of these best-of-breed Software-as-a-Service (SaaS) solutions include:

  • Specificity: Best-of-breed solutions were purpose-built to meet a certain need. Look for a vendor that can customize to your business’s workflow.
  • Reduced risk: In contrast with on-premise software, SaaS solutions require a much lower up-front investment.
  • Rapid time-to-value: The deployment of these best-of-breed solutions can take weeks, as opposed to months. These shorter implementation cycles mean a much quicker return on investment.
  • Scalability: You can look for a solution that will scale as your business grows.
  • Reduced ongoing cost: the solution is constantly improved, updated, and maintained by the software vendor, requiring fewer internal IT resources.

Now, there are a few questions businesses must answer:

  1. What classes of software are the most important to optimizing our business processes?
  2. Within the classes of software we consider important, what are the choices?
  3. Who are the market leaders, and which solution will be able to best meet our needs?

This is a challenging new time for an industry used to simply picking an accounting system or ERP, but these best-of-breed tools can play a huge part in optimizing the customer experience, improving sales productivity, and increasing overall efficiency.

While the discovery process is still being explored, it’s also an exciting time for wholesale distributors who are taking a new look at their existing processes and seeking ways to become more agile in an increasingly competitive market.

This blog post features just one insight from our recently published Wholesale Technology & Sales Survey Report. To get more insights on the current state of the wholesale distribution industry and how you stack up to the competition, you can download the entire report for free here.