Distribution's Secret IT Weapon

VARBusiness State of Distribution Report

Yet, the distribution industry is in a period of transition. Vendors are questioning what role distribution plays in such businesses as software license activation. Solution providers are wondering whether distribution will be an ally or competitor in the blossoming managed services space. And the distributors are eagerly looking for new opportunities to support their businesses--that already operate on razor-thin margins.

You could argue that distribution will always play a role in supply chain management, solution provider financing and partner recruitment for vendors. But that's still the old school of distribution. What many distributors are finding are efficiencies that will carry them into the next era of success. Ironically, it's technology that will carry them there.

I recently sat with Steve Phillips, CIO and senior vice president of Avnet, who is overseeing his company's internal IT development. Number four on the VARBusiness Top 25 Distributors list, Avnet is implementing new tools and infrastructure to support partners and make it easier for them to do business with the company and run their businesses better. It's Phillips' job to design and make those systems work.

"Every dollar we save gets reinvested into new capabilities for the business to create new efficiencies or open new business opportunities," Phillips said.

Some of the things Phillips and his team have either implemented or are in development for at Avnet: a new portal for accessing product availability and pricing, which enables smoother ordering; a rebate management system that shows what rebates are available, if a VAR qualifies, and tracks payments; and partner connection tools, allowing solution providers to link up with peers with complementary skill sets and expertise on projects. Other distributors are embarking on similar IT projects, as well as enhancing financing programs, education and technical support for their clientele.

"The constant evolution of new capabilities and tools are what will drive (our) success," said Phillips.

On the surface, efforts of Phillips' and his distribution peers seems pretty self-evident: everyone wants efficiency and IT is a way of getting there. The tools distribution's IT teams develop will make it easier for solution providers to do business with them, but it will also enable the next generation of distribution that will feature virtual warehousing, just-in-time delivery systems, resource sharing and cooperative purchasing.

The systems solution providers sell just might be the thing that not only keeps distribution relevant, but prosperous.