ERP in Wholesale and Distribution

Transcription

1 ERP in Wholesale and Distribution Extending the Enterprise to Extend Profits October 2012 Nick Castellina

2 ERP in Wholesale and Distribution: Extending the Enterprise to Extend Profits Enterprise Resource Planning (ERP) is currently used by 92% of wholesalers and distributors. This is unsurprising since wholesale and distribution are industries that require tracking of wide ranges of products over widely dispersed distribution networks. In these industries, costs must be contained while working with the extended enterprise to facilitate communication both up and down the supply chain. A wholesaler or distributor that only focuses on internal matters is not going to be as effective as one that is working outside of itself to forecast demand and provide products to customers when they need them at a low price. This report, based on survey responses from 99 wholesalers and distributors, provides a guide for utilizing ERP to communicate internally and externally while cutting costs and extending profit margins. Defining the Best-in-Class Based on data from Aberdeen s 2012 ERP Benchmark survey, Aberdeen used five key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard ERP implementations (Table 1). These metrics were selected because of their relevance in assuring the ultimate success of wholesalers and distributors. Delivering to customers on time is paramount to retaining customers. Accurate inventories ensure that there are no surprises when it comes to shipping products and also keep carrying costs low. Additionally, in a volatile market, being able to make quick decisions based on accurate information enables agility and the ability to create rolling forecasts. Lastly, as should be the goal of any organization, top performing wholesalers and distributors are driving increased operating margins. Success in the included metrics resulting from successful ERP implementations leads to efficiencies and improvements throughout the organization. October 2012 Sector Insight Aberdeen s Sector Insights provide strategic perspective and analysis of primary research results by industry, market segment, or geography What is ERP? Aberdeen defines ERP as an integrated suite of modules that forms the operational and transactional system of record upon which any business is based. With its roots in Material Requirements Planning (MRP), it is most ubiquitous in the manufacturing industries, but has truly expanded beyond these boundaries to become a mature business application that provides value to a far more extensive set of industries. ERP systems provide much-needed capabilities, such as management of financial, product / inventory, human capital, purchasing, and other transactional data within one environment. Table 1: Top Performers Defined as "Leaders" Definition of Maturity Class Best-in-Class: Top 20% of aggregate performance scorers Mean Class Performance 97% inventory accuracy 98% complete and on time shipments 19% increase in operating margins over the past two years 40% decrease in time to decision over the past year This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

3 Page 2 Definition of Maturity Class Industry Average: Middle 50% of aggregate performance scorers Laggard: Bottom 30% of aggregate performance scorers Mean Class Performance 95% inventory accuracy 94% complete and on time shipments 7% increase in operating margins over the past two years 12% decrease in time to decision over the past year 86% inventory accuracy 87% complete and on time shipments 2% decrease in operating margins over the past two years 11% decrease in time to decision over the past year The Environment Facing Wholesalers and Distributors Many of the pressures driving ERP strategies in wholesale and distribution industries are similar to pressures facing other industries (Figure 1). The need to cut costs and grow at an acceptable rate while managing these costs remains a steady concern. Where wholesalers and distributors differ from other industries, however, is in the pressure to facilitate interactions with the extended enterprise. Figure 1: Top Business Drivers Impacting ERP Strategies Must reduce costs We need to be easier to do business with Pressures to innovate to deliver more value to the customer Need to manage growth expectations Delays in decision-making from lack of timely information 24% 30% 30% 41% 38% 0% 25% 50% 2012 ERP Research The data cited in this report was collected from 99 wholesalers and distributors in the 2012 ERP Benchmark survey as of July Aberdeen's 7th annual ERP benchmark study is being held throughout the year and is aimed at quantifying ERP usage, identifying preferences for fully integrated suites versus point solutions, measuring Total Cost of Ownership (TCO) as well as the business benefits derived from Best-in-Class implementations. The survey also compares the performance of organizations using ERP to those without ERP. To take part in the survey, please click here. Source: Aberdeen Group, July 2012 In order for wholesalers and distributors to succeed, they must working collaboratively with suppliers and identify the demands of customers. For example, wholesalers and distributors need to know when they can expect to receive products from suppliers as well as what volume and price to expect for those products. At the same time, a wholesaler or distributor needs to accurately anticipate the needs of their customers in order to ensure that they will have the right amount of product to supply. Thus, 38% have indicated that they need to be easier to do business with. This means that a secure form of communication is established between wholesalers and distributors and their extended enterprise. Roadblocks must be

4 Page 3 removed for customers, ensuring that they can receive products and information to meet their own business needs. Similarly, 30% indicated feeling pressure to innovate to deliver more value to the customer. In the case of wholesale and distribution, these organizations are not altering the products themselves, but rather the services and processes to support these products and deliveries. For example, an increasing amount of wholesalers and distributors are now offering installation services for the products they sell. Another example would be vendor-managed delivery. These innovations are directly apparent to the final customer, but other innovations are benefiting the organization internally. For example, alterations could be made to delivery scheduling, route scheduling, or direct store delivery. Of course, as the organization adds new processes, these processes must be supported by internal business processes, which is why this pressure is a leading driver for ERP strategies in wholesale and distribution. Lastly, 24% of wholesalers and distributors are experiencing delays in decision-making due to a lack of timely information. This information can include changes in order status, customer demand, shipping costs, or even road closures. In wholesale and distribution industries, forecasting supply and demand is incredibly important. Aberdeen s Financial Planning, Budgeting, and Forecasting: Leveraging Risk-Adjusted Strategies to Enable Accuracy illustrated the benefits of being able to create rolling forecasts. However, being able to constantly update forecasts to reflect business potential is impossible without timely information. Additionally, wholesalers and distributors rely on being able to secure products at a beneficial price, being alerted to timely information can help to secure these prices. By having timely information, wholesalers and distributors can make agile decisions and get ahead of their competitors. This may not be possible without the technology that provides the backbone to this data. "Our ERP solution greatly improved our ability to control margins on the front end, as well as to reduce expenses on the back end." ~ Vice President, Large Wholesaler/Distributor Best-in-Class Strategies In response to these pressures, wholesalers and distributors are enacting a select set of strategies (Figure 2). Since the leading business driver impacting ERP strategies is the need to reduce costs, it is unsurprising that 64% of wholesalers and distributors are attempting to streamline and accelerate processes. For example, this can include rerouting standard shipping routes or consolidating warehouses. Not only does this help to reduce costs, but it also aids in servicing customers more quickly and effectively. An example of this strategy in action may be found in altering shipping routes in order to reduce delivery times. Additionally, once these processes are improved, 45% of wholesalers and distributors are standardizing these processes across the organization. This is important because many wholesalers and distributors are spread across multiple geographically diverse business units. Standardizing these processes ensures that best practices are followed throughout the organization.

5 Page 4 Figure 2: Top Strategic Actions Streamline and accelerate processes 64% Standardize business processes Provide timely information to front-line employees Modernize technology infrastructure and applications Provide visibility to business processes across functions and departments 45% 34% 32% 29% 0% 25% 50% 75% Source: Aberdeen Group, July 2012 In response to the pressure to make agile decisions, wholesalers and distributors are taking action in a couple of different areas. Thirty-four percent (34%) are providing timely information to frontline employees. Additionally, 29% are providing visibility across functions and departments. Wholesalers and distributors will now know right away if other business units have access to stock that they may be low on. This information persists throughout the organization and is the backbone of all process improvements, forecasts, and decisions. So how are these actions being supported? Thirty-two percent (32%) are modernizing their technology infrastructure and applications. This does not only mean software such as ERP, but also the hardware being used to support these applications. Old technology may make it more difficult to operate at the standards that are required for business success today. Impacting ERP Capabilities In support of the actions listed above and in order to improve business performance, Best-in-Class wholesalers and distributors have implemented process, organizational, knowledge management, and performance capabilities. These capabilities are enabled, in part, by ERP. Since 45% have indicated that standardization of processes is a top priority, it is unsurprising that Best-in-Class wholesalers and distributors are more likely than All Others to have already implemented standards for many front and back office procedures (Figure3).

6 Page 5 Figure 3: Standardizing and Enhancing Processes 100% 80% 60% 40% Best-in-Class Industry Average Laggard 90% 90% 86% 78% 75% 75% Standardized enterprisewide procedures for procurement, cash collection, and financial reconciliation Standardized procedures for order management and delivery / fulfillment 76% 52% 46% Ability to do demand planning and forecasting Ninety percent (90%) of the Best-in-Class have standardized enterprise wide procedures for procurement, cash collection, and financial reconciliation. The same percentage has also standardized procedures for order management and delivery. Not only does standardizing these processes ensure that operations run smoothly, but it also facilitates customer and supplier interactions. The result is that the organization becomes easier to do business with. These top performers are providing a united front to their customers and helping to expedite deliveries. They are also more likely to earn favor with suppliers and secure better prices and quantities. When these best practices are standardized, it directly affects customer retention and operating margins. As a central repository, ERP can help to promote these standards. One process improvement that is particularly important in wholesale and distribution is the ability to forecast and plan for demand. The Best-in-Class are 52% more likely than All Others to have this capability. Accurately assessing demand gives organizations the confidence to be able to invest in the business because they know the likelihood of future performance. Accurate demand forecasts allow wholesalers and distributors to procure an amount of product that is necessary to please their customers. Inventory holding costs can be avoided, sales opportunities are less likely to be missed, and the organization can secure a better price for its products. "Having real-time data and a more intelligent means of tracking transactions has made a world of difference. It would be hard to remain competitive without ERP." ~ Manager, Small Wholesaler/Distributor Organizational Capabilities Organizationally, ERP is helping organizations to continually improve and stay ahead of their competition. This includes supporting innovation to deliver more value to the customer. Of course, this all starts with continued commitment to ERP itself. The Best-in-Class are 82% more likely than All Others to hold the line of business accountable for the ongoing success of

7 Page 6 ERP (Figure 4). This ensures that ERP becomes a part of the organizational culture and is relied on to continue to drive operational improvements. Figure 4: Using ERP to Drive Organizational Improvements 90% 60% 30% 89% 49% Line of business is held accountable for the ongoing success of ERP strategy Best-in-Class 70% Cross-functional continuous improvement teams are responsible for improving operational performance All Others 44% 38% 37% Ongoing ability to quickly change ERP solution to react to business change 40% 31% Job role (e.g., Chief Knowledge Officer) or group dedicated to data management So how does ERP help to drive organizational improvements? The Best-in-Class are almost twice as likely as All Others to have cross-functional continuous improvement teams that are charged with improving operational performance. The collaboration and communication capabilities that ERP provides are used to support these teams. Employees from geographically disperse locations can share ideas and teach other business units what works for them. Additionally, in relation to the goal of continuous improvement, since ERP should be a reflection of the business itself, ERP needs to change to reflect these organizational improvements. At the same time, these changes cannot disrupt the business and add increased cost. Best-in-Class organizations are 19% more likely to have the ongoing ability to quickly change their ERP solution to react to business change, such as new business units, products, or processes. Even though these changes are facilitated by flexible ERP software, they should be given the same amount of commitment and respect as a full ERP implementation. An employee such as a Chief Knowledge Officer must be in charge to ensure that data continues to be consistent and reliable. The Best-in-Class are 29% more likely than All Others to institute a similar role. Knowledge Management One of the key benefits of a successful ERP strategy for wholesalers and distributors is the visibility that ERP provides and how that visibility aids in decision-making. The Best-in-Class are more likely than All Others to have

8 Page 7 real-time visibility into events and data both internal and external to the organization itself (Figure 5). Figure 5: Data Drives Decisions 70% 35% 0% Best-in-Class Industry Average Laggard 65% 63% 63% 63% 58% Real time visibility into status of all processes from quote to cash 45% 44% 39% 25% Ability to automatically and immediately notify decision makers when certain conditions occur Ability to share with and integrate data from the extended enterprise The majority of all wholesalers and distributors have real-time visibility into the status of all processes from quote to cash. Since operations in wholsalers and distribution take place over an extended network of locations, this allows decision-makers to know exactly when processes occur and helps them to ensure the organization is sticking to schedule. Where the Best-in-Class really differentiate themselves, however, is in the ability to notify decision-makers when certain conditions occur. The Best-in- Class are 66% more likely than All Others to have this capability. On one end, they can track when shipments have been completed or when customers are in need of more of a product. Fast Facts Eighty percent (80%) of the Best-in-Class have the ability to drill down to individual transactions from summary data compared to 64% of All Others. The Best-in-Class are over twice as likely as All Others to automatically and immediately alert decisionmakers when scheduled activities fail to occur on time. On the other end, these organizations can be alerted when products become available from their suppliers. Additionally, the Best-in-Class are over twice as likely as All Others to have the ability to notify decisionmakers when certain conditions occur. For example, notifications could be sent when shipments are going to be late. The organization can then alter routes for future shipments and begin damage control with their customers. Many of these alerts are reliant on the exchange of data with the extended enterprise. Since the success of wholesalers and distributors is so dependent on buying and selling from suppliers and customers, it is necessary to include data from these factors in forecasting and decisionmaking. The Best-in-Class are 38% more likely than All Others to have the ability to share and integrate data with the extended enterprise. This ensures that all possible factors are considered in decision-making. For example, a wholesaler or distributor may be forecasting a large amount of sales for a certain product. If that organization is unaware that their supplier is not going to be able to meet their needs, forecasts will be wildly inaccurate. Automatically connecting business systems to exchange this data is a major competitive advantage of the Best-in-Class. "Our staff became more engaged as our ERP system was user-friendly and gave us the ability to easily extract pertinent data." ~ CFO, Midsize Wholesaler/Distributor

9 Page 8 Enabling Business Decisions The capabilities listed above are enabled, in part, by a technology backbone. Ninety percent (90%) of wholesalers and distributors are including ERP as a part of that technology background. The purpose of ERP is to be an end-toend business system that forms the system of record for a business. Some organizations, however, may find that they need technology beyond what is included in core ERP functionality. This may be because they have legacy systems in place that they desire to continue using or they have other software packages that they have already purchased. Sometimes this extended functionality is purchased from the ERP vendor itself. Still, the idea of a one stop shop for data should not be lost. These systems must be integrated seamlessly and effectively. For this reason, 79% of the Best-in-Class integrate their business systems in order to create a complete and auditable system of record, in comparison to 71% of All Others (Figure 6). Figure 6: Integrated Systems Fast Facts Seventy percent (70%) of the Best-in-Class enable data to appear to be shared across applications seamlessly and transparently. 85% 60% 35% 10% 79% 71% Integrated business applications serve as a complete and auditable system of record 61% 52% Master Data Management integrated into ERP Best-in-Class 50% 53% 46% 45% Business analytics / intelligence integrated into ERP All Others Ecommerce integrated into ERP / order management 28% 15% Customer selfservice portals integrated with ERP The Best-in-Class are 47% more likely than All Others to have process flows that span different applications able to be completed without consciously switching between applications. As an example of how these integrations work in theory, there are several ways in which integration of tools are beneficial to wholesalers and distributors. Wholesalers and distributors with wide networks are subject to an increasing amount rapidly changing data. Sixty-one percent (61%) of the Best-in-Class have integrated Master Data Management into ERP, in comparison to 52% of All Others, to ensure that this data is accurate and can be relied upon. Also important is the ability to actually make use of the data contained in ERP. As illustrated in Aberdeen s ERP plus BI: Maximizing the Return on your ERP Investment, Business Intelligence can help to make ERP data more consumable and searchable for employees. Thus, the Best-in-Class are more likely to be integrating BI effectively. As far as external facing technology is concerned, 53% of the Best-in-Class have integrated Ecommerce into ERP and order management, compared to 45% of All Others. They are also

10 Page 9 almost twice as likely as All Others to integrate customer self-service portals into ERP. These technologies help to streamline operations, please customers, and make the organization itself easier to do business with. Beyond the technologies listed above, there is a series of modules and extensions that are crucial to success in wholesale and distribution specifically. The Best-in-Class are more likely to use technologies such as Warehouse Management, Distribution Requirements Planning, and Supplier Collaboration in order to more successfully manage the business. Further, this report has stressed the importance of demand planning and forecasting largely due to the fact that 59% of the Best-in-Class have implemented this functionality in their business systems. Part of that planning and forecasting necessitates data from the extended enterprise. The Best-in-Class are 40% more likely than All Others to have an Enterprise Data Interchange Translator in order to automate this process. Combined, these technologies help to support ongoing operations. Table 2: Wholesale and Distribution ERP Modules and Extensions Best-in-Class All Others Forecasting / Demand Planning 59% 47% Enterprise Data Interchange Translator 56% 40% Warehouse Management 47% 31% Distribution Requirements Planning 27% 17% Supplier Collaboration / Scheduling 18% 11% Mobility Matters Since quick decisions need to be made by employees that spread across multiple locations, mobility is an important capability in wholesale and distribution. Still, only 27% of wholesalers and distributors have implemented this capability. There is, however, some differentiation between the Best-in-Class and All Others. The Best-in-Class are 32% more likely than All Others to enable users to access ERP from mobile devices (Figure 7). Additionally, another 50% of the Best-in-Class plan to implement this capability compared to 45% of All Others. This indicates that mobility will continue to be a differentiating factor for the foreseeable future. This is because mobile applications allow decision-makers access to data no matter where they are or what time of day it is. This enables agile decision-making and more accurate forecasts. Similarly, the Best-in-Class are 38% more likely than All Others to have Event Management technology. While this technology does not necessarily need to be mobile-enabled, it is a valuable tool for alerting decision-makers of important events that could hinder or benefit the business. "ERP is what we live and breathe; the cornerstone of our daily business." ~ Manager, Small Wholesaler/Distributor

11 Page 10 Figure 7: Power in your Palm 90% 50% 10% 33% 25% Users have access to ERP from mobile devices Best-in-Class 65% 47% Event Management (Triggers & Alerts) 35% All Others 17% 86% 62% Mobile app for Data entry at the warehouse users point of activity that include pick, put away, etc. Fast Facts The Best-in-Class are over twice as likely as All Others to have role based homepages. So how does mobile ERP affect an individual employee s ability to do their job? The Best-in-Class are over twice as likely as All Others to have mobile applications for warehouse users. These can include actions such as pick, put away, and more. Work instructions become more accessible and employees can perform their duties more quickly. Additionally, 86% of the Best-in-Class have data entry at the point of activity, compared to 62% of All Others. In the warehouse this saves employees from having to walk back to a workstation and enter data. This saves time and also makes it less likely that data will be entered incorrectly. On the road, drivers can interact with the home office immediately and help to maintain schedules and records. Of wholesalers and distributors that have mobile access to ERP: 87% provide access to sales 78% provide access to management 48% provide access to warehouse employees Measure to Improve In order to truly maximize the benefits of processes and technology, these processes and technologies must be fine-tuned. Of course, these alterations are not possible without measuring the ongoing success of these processes and technologies. Best-in-Class wholesalers and distributors are outpacing All Others in their ability to perform these measurements (Figure 8). But in order to measure, the organization must define the Key Performance Indicators (KPIs) that are to be measured and communicate them throughout the organization. The Best-in-Class are twice as likely as All Others to have a central repository of metrics and KPIs available ondemand. Often this repository is contained in ERP.

12 Page 11 Figure 8: Measurement Leads to Optimization 70% 50% 30% 10% 42% 21% Central repository of metrics and KPIs available ondemand Best-in-Class 53% 35% Measurement of accuracy of demand planning and forecasting All Others 61% 20% Quantifiable business benefits resulting from overall implementation of ERP are measured 33% 15% Measure employee usage of individual modules and extensions of ERP One important process that needs to be measured is demand planning and forecasting. If a demand forecast is inaccurate, it is useless. The Best-in-Class are 51% more likely than All Others to be able to measure the accuracy of forecasts. This is in the hopes of devising more accurate forecasts as time goes on. But what about ERP itself? The Best-in-Class are over three times as likely as All Others to be able to measure quantifiable business benefits that are derived from ERP. These organizations can then figure out which functionality is working best for them, identify areas where the organization is lagging, and then alter their solutions to be more appropriate for the business. This capability extends to the employees using ERP themselves. The Best-in-Class are over twice as likely as All Others to measure employee usage of individual modules and extensions of ERP. They can then alter training materials and promote the functionality of underutilized modules to encourage employee adoption. When wholesalers and distributors do measure the business benefits from their ERP, they are finding improvements in many areas (Table 3). Responding organizations were asked to indicate the percentage changes in several performance metrics that have changes as a direct result of their ERP solution. Even Laggard organizations are seeing improvements, which include cost savings and operational efficiencies. Customers are receiving their purchases on time and more quickly as a result of ERP, which could lead to repeat business. By using ERP to enable strategic actions and capabilities, wholesalers and distributors are seeing marked improvements in the way that they conduct business. Fast Facts The Best-in-Class are over twice as likely as All Others to measure ROI for ERP projects. The Best-in-Class average 16 hours from order taking to shipment compared to 45 hours for All Others.

13 Page 12 Table 3: Measurable Benefits to be Derived from ERP Benefit Achieved through ERP Best-in- Class All Others Improvement in inventory turns 51% 25% Reduction in operational costs 22% 11% Reduction in administrative costs 17% 11% Improvement in complete and on time shipments 16% 11% Improvement in internal schedule compliance 16% 11% Improvement in cycle time from order to shipment 23% 13% Key Findings and Recommended Actions By combining ERP with the actions and capabilities illustrated above, top performing wholesalers and distributors are extending their enterprise to work together with their customers and suppliers to become easier to do business with and keep costs low. Additionally, the Best-in-Class are providing visibility across the organization to make the entire business run cohesively. Of course, this is easier said than done. What follows is a road map for a successful ERP strategy based on current company performance, but organizations looking to improve should take heed of all these recommendations. Laggard Steps to a Successful ERP Strategy Accurately forecast demand and measure the accuracy. The difference between an accurate forecast and an inaccurate forecast has a great effect on the organization. Inaccurate forecasts can lead to either missed opportunities or increased costs. Additionally, if an organization cannot rely on their forecasts, they may have less confidence when making investments. Less than half of Laggards can forecast and plan for demand and only 35% can actually measure the accuracy of those forecasts. Share analytical data outside of the enterprise. The Best-in- Class are 49% more likely than Laggards to have the ability to share data with the extended enterprise, including customers, resellers, suppliers, and regulatory bodies. Sharing this data allows the organization to take more relevant factors into consideration when planning. It also facilitates interactions, making the organization easier to do business with and reducing costs by streamlining processes. Integrate business systems. Integrating business systems ensures that data is being pulled from one consistent source, reducing inaccuracies. Seventy-three percent (73%) of all wholesalers and

14 Page 13 distributors have this capability, but it is important to provide employees with a one stop shop for data. The Best-in-Class are 79% more likely than All Others to have data appear seamlessly and transparently across applications. They are then more likely to be able to find the data they need, and actively search it out and use it. This should be as painless as possible, which is why the Best-in-Class are over three times as likely as All Others to enable process flows that span multiple applications to be completed without consciously making an effort to switch between applications. Industry Average Steps to Improving an ERP Strategy Continuously improve. Whether it is updating business processes or optimizing ERP solutions, continuous improvement teams lead to the organization s ability to get ahead of its peers and catch up with its larger competitors. Seventy percent (70%) of Bestin-Class organizations have cross-functional continuous improvement teams tasked with improving performance in comparison to 42% of the Industry Average. Measure returns on investment. Only 26% of the Industry Average measure quantifiable business benefits derived from ERP. Further, only 25% of the Industry Average measure ROI for ERP projects. How do these organizations know if their ERP solution is truly benefitting the organization? By performing these measurements, these organizations could see where their solution is underperforming and make alterations to the system in order to achieve greater benefits. Look to wholesale and distribution specific modules and extensions of ERP. Modules and extensions such as Warehouse Management, Distribution Requirements Planning, and Supplier Collaboration help wholesalers and distributors to get further control of their businesses. Further, an Enterprise Data Interchange translator will help automate data sharing with the extended enterprise. Still, according to this survey's data, they are far from pervasive amongst the Industry Average. By combining these enablers with ERP, leaders will find further visibility into their businesses and identify additional efficiencies. Best-in-Class Steps to Improving an ERP Strategy Enable mobile access to ERP. While the Best-in-Class are differentiating themselves from All Others in providing access to ERP from mobile devices, only 33% have this capability. By giving access to decision makers in this 24 / 7 business world, successful organizations are becoming more able to make agile decisions, combat adverse events, and proactively grab hold of opportunities in tightening decision windows. "ERP has made accounting for inventory flows easier. The real-time activity keeps management up to date on inventory levels and outflows." ~ Manager, Midsize Wholesaler/Distributor

15 Page 14 Select a system that is easily tailored. ERP is designed to be the backbone of a business. As such, it needs to be an up-to-date reflection of the processes, products, and business practices of the organization. If any of this change, ERP must change as well. Of course, these alterations could prove costly. They could consume IT resources or require additional technology purchases. Unfortunately, although they are 19% more likely than All Others to have this capability, only 44% of the Best-in-Class have the ongoing ability to quickly and cheaply tailor their ERP solution to reflect business change. Give employees the tools that they need to perform. The technology backbone that ERP provides is only valuable if employees can actually use it. While 50% of the Best-in-Class have integrated BI to pull actionable insight from the data contained in ERP, there is still more to be done. Every job role has different data needs. Their path to insight should not be obstructed by data that is not pertinent to them. By implementing role-based homepages and preconfigured dashboards for users, the Best-in-Class could facilitate data access and promote more agile decisions. By combining these steps with a well thought out ERP strategy, wholesalers and distributors extend their networks and improve their profits. For more information on this or other research topics, please visit To take part in Aberdeen's 2012 ERP research, click here. SoMoClo s Impact on ERP; August 2012 ERP in Manufacturing 2012: The Evolving ERP Strategy; July 2012 Related Research ERP plus BI: Maximizing the Return on your ERP Investment; June 2012 ERP in Wholesale and Distribution; October 2011 Author: Nick Castellina, Research Analyst, Enterprise Applications (nick.castellina@aberdeen.com) For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen or call (617) , or to learn more about Harte-Hanks, call (800) or go to This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2012a)