The Data Synchronization Challenge

Earlier this year we conducted a survey entitled “Channel Challenges” where we solicited input on the challenges that persist between manufacturers, distributors and reps. We’ve recently written a couple of articles on some of the challenges.

An upcoming article will cover a number of operational issues, including data synchronization, error generation (and the potential for savings) as well as pricing.

While the quality of data in distributor ERP systems is integral to the success of their businesses, and quality data facilitates electronic interaction between manufacturers and distributors (and eventually between distributors and their customers and potentially between manufacturers and end-users), the survey unveiled a potential dictonomy between what people say and what they do.

Some examples…

• 72.4% of manufacturer respondents stated that data synchronization is important to their company, but 56% of companies are investing less than $100,000 in time (people – essentially 1-2 FTE employees) on the issue and only 45% of respondents stated that they have actually budgeted some money towards this issue.
• 80.6% of distributor respondents state that data synchronization is important but a vast majority are budgeting <$50,000 towards the issue.

And this does not take into account that the vast majority of small distributors (<$20M in sales) were not represented in the survey. (Anecdotally, data synchronization appears to be a large(r) distributor issue - possibly due to costs, technical sophistication, understanding of the issues, manufacturer attention).

While IDEA has announced a number of new customers throughout the year and introduced initiatives to stimulate IDW usage (see last newsletter), the challenge remains that the industry has almost 3000 distributors, and in an economic environment that will encourage distributors to allocate resources to revenue generation to maintain share and expense management, it’s questionable the inroads that can be made in the forseeable future.

What needs to be done to get channel partners on the same page? Based upon interviews we’ve been conducting with contractors, interest in customer connectivity is growing (amongst larger contractors). How could contractors be better supported (plus the more “connections” you have with your customer, the potential for a tighter relationship)?

Just some food for thought. We’re conducting a follow-up survey on the issue to add some more depth to our article. You can find the survey here.