The Call for Change: Digital Transformation for Distributors

The pace of digital transformation for small- to mid-sized distributors underwent a dramatic change in the face of 2020’s supply chain disruptions. What began as an essential response to a pandemic forced companies to evolve, adapt, and accelerate their digital transformation. Six years later, countless businesses have become accustomed to the efficiency, security, and ease of doing business in the cloud, and are looking ahead to even more new innovations. Poised on the edge of whole new ways of using data to improve the customer experience across the supply chain, distributors need to keep moving forward to realize real value.

Why do some distributors still find the idea daunting? Despite the benefits of the cloud and other digital initiatives such as agentic AI and machine learning, there are still concerns about reliability, third-party integrations, and business disruptions when migrating to the cloud. This has discouraged some distributors from pursuing digital transformation, despite their peers' measurable benefits.

If this sounds familiar, you’re not alone. Help is at hand! We’ll describe the key elements of digital transformation and explain how you can track the savings in time, money, and security across your organization.

First things first. Why move to the cloud?

At the top of the list are security and reliability. Staying on-premises exposes your business to unnecessary risks and operational challenges—from exposed data and server failures to vulnerability to unexpected events like hurricanes or fires. A report by IBM showed that the average cost of a data breach to organizations is around $5,000,000, including lost profits, recovery costs, and reputational damage. For distributors, those losses translate into halted operations, missed shipments, and eroded customer confidence. MPT Drives quickly made the move to the cloud after a ransomware attack.

In contrast, a cloud-deployed ERP system delivers built-in disaster recovery and advanced cybersecurity — reducing your downtime, mitigating risk, and eliminating hardware failures. Automated updates also provide you with the flexibility to scale as your business needs change, so you can focus on achieving operational excellence instead of managing your IT infrastructure.

Put simply, digital transformation is the act of integrating digital technologies to replace older processes and create new value, ultimately driving quantifiable impacts on your business.

The cloud isn't just safer, but it's a smarter way to future-proof your business and your distribution operations.

Three Reasons Why Your Business Needs Digital Transformation

1. Leveraging new technological possibilities

How many things are you still doing in your business for no other reason than, “That’s the way we’ve always done it”? Constraints such as analog processes, spreadsheets, and manual data entry may be holding your organization back from growing at the pace of change. New technological possibilities can unlock time and value by challenging the prevailing ideas about how a business “should” work.

2. Blending experience with innovation to keep a competitive edge

Just like Netflix disrupted the distribution channels of video rentals back in the day, all industries are susceptible to new entrants who present themselves as the next big digital innovator right from the start. The things these startup companies often lack, however, are established customers and supporting data — things you likely have in large amounts.

By taking a proactive approach to using cloud-based solutions to transform your business (even if you didn’t have much familiarity with digital automation in the past), you can be one of the disruptors in your industry, rather than being disrupted.

3. Building agility and operational excellence

There’s no denying that the rate of change and volatility in the markets today shows no signs of slowing down. Digital technologies can help your business sense these challenges sooner, so you can pivot quickly based on new insights while monitoring progress with clarity and precision.

Key Cloud Capabilities

When your ERP system is built on and delivered via the cloud, as opposed to on-premises servers, you accelerate your digital journey without worrying about upgrades with cumbersome customizations, an unexpected server refresh, or a threat of ransomware.

What you can track:

• Reduced operational costs: With integrated data across your operations, you can identify and address inefficiencies quickly and precisely.
• Decreased security costs: With Cloud solutions, your vendor makes security their top priority, allowing your team to focus on growth.
• Reduced administration: Free your IT department from the burden of administrating a database, operating systems, or applications, so they can focus on projects that drive revenue and serve customers.
• Automatic upgrades: Get the latest releases on a regular cadence, avoiding periodic and manual organization-wide updates.

“Move to the cloud, I will be telling everyone. Don’t be afraid of the initial cost. I don’t have to buy new servers every 5 years, I don’t have to maintain the servers, and the software maintenance is rolled into the monthly cost. It may seem like a lot when you first look at the per user cost, but when you factor it all in, it just makes sense.”

Keith Nowak,
President | MPT Drives

Data analytics and visualization

Unshackle your team from the grind of data collection and static reporting. This technology brings numbers to life through dynamic reporting and compelling visualizations that help you pay proactive attention to revenue, expenses, and other KPIs that matter. With real-time analytics delivered digitally, businesses can stay connected to their revenue and performance numbers in order to make data-based decisions quickly.

What you can track:

• Time savings: Increase productivity through fast and easy monthly reporting, consolidations, comparisons, customized statements, and permission-setting.
• Reduced reporting oversight: Automatically report, analyze, and track numbers for legal and non-legal entities like branches, area departments, and specific product lines without relying on manual administrative tasks.
• Faster, better decision-making: Refer to a single source of truth that is always up to date, without the high potential for errors and inconsistencies of updating static spreadsheets.

Like all major milestones in the evolution and maturity of your business, embracing digital transformation and the path to the cloud takes time, careful consideration, and a willingness to tackle the unknown. The results reward your initiative; however, as you celebrate a business that is safe, streamlined, and ready for what’s next.

When you’re ready to transform your business, increase customer and employee satisfaction, and take the path to outperforming your competitors, reach out to your account manager to learn how easy it really is.