Scenario Planning: Strategy, Steps, and Examples

This article on scenario planning is useful for business managers, decision-makers, and anyone interested in risk management and forecasting future events for businesses. It provides an overview of the scenario planning process, steps involved, scenario planning tools, and examples of scenario planning. It also outlines the pros and cons of scenario planning and the importance of scenario planning for businesses.

Scenario planning is an integrated approach to risk management for businesses. Besides helping the manager forecast cash flows and profits, scenario planning enables them to predict future situations. It is ideal for determining the impact of known and unknown events. As a decision-making tool, scenario planning can let us develop disaster preparedness plans based on forecasted outcomes. 

Scenario planning goes beyond the identification and mitigation of business risks. It supports business expansion and growth programs. Based on the current demand and supply forces, a company can visualize its performance in the future. Although developed by the US military, the scenario planning process and tools support countless global companies.

Scenario planning process

The scenario planning process may vary based on the type. There are four different scenarios you can predict and plan. These include quantitative, strategic management, operational, and normative. The process features a series of steps. We will discuss this under the next subtitle.

Essential Steps for Scenario Planning

The scenario planning process has six steps. We will discuss them below. 

Step One: Brainstorming

Brainstorming is when you predict future events based on your past experiences. So the first step is to determine a time frame for your future scenarios. For instance, you can choose to create a five-year scenario. In this case, you should use the past five years as your reference point. 

What things occurred in this past period, and how did they affect your organization? The odds of the same events happening in the next five years are high. Several factors come into play when brainstorming potential scenarios for a business. Some include technology changes, increased rivalry, product lifecycles, and political situations.

Step Two: Pinpoint the causes and trends

What drove the occurrence of the events you identified above? Likely driving forces and trends could be workers, stakeholders, competitors, suppliers, consumers, government, etc. After identifying the driving forces, analyze them one by one. Consider their current actions, interests, and positions. It is necessary to seek advice or assistance from professionals in technical areas. 

Step Three: Design a template

Find the macro-environment sources of the causes or driving forces you identified above. These forces may originate from technology and innovation, political climate, economic situation, consumer behavior, and the company’s competitiveness and abilities: separate high-predictable and less-predictable causes and their likely effects. 

Step Four: Create a scenario

Investigate the current trends in the market before creating a scenario. Hence, choose a condition and develop it using the facts you have gathered. Classify your touchpoints and make your scenario revolve around them.

Step Five: Review the scenario

A systematic evaluation of your scenario is necessary. Creativity, knowledge, and expertise are all vital when reviewing the scenario. Think of any factor that could affect the issue at hand. There will be uncertainty in your predictions, but past knowledge and experiences can help. 

Writing sensible questions is the best way to forecast and review your scenarios. These questions can be about future price changes, consumer reactions, technology growth rate, and changes in government regulations. 

Step Six: Implement the scenario and make amends

Your scenarios rely on predictions. However, a few months after implementing them, you will capture actual data as the market trends shift. Hence, upgrade your business strategies for which you built the scenario based on actual data. Update these strategies periodically as the macro-environmental factors affecting the market conditions change. 

Scenario planning tools

As we noted earlier, scenario planning allows you to prepare for future events. You can also plan for the future based on past occurrences. Scenario analysis helps organizations keep pace with the changes in the micro and macro environments. But, they need special tools.  

These are usually in the form of software. There is scenario Analysis software already. It only does scenario planning and not anything else. The scenario modeling software can eliminate human error by automating the prediction process. It is an agile tool that helps you answer different What-if questions. 

With it, managers can understand the impact of market changes on revenue, cash flows, and other financial elements. Other tools for carrying out scenario planning include the following:

• Customer Relationship Management software can provide necessary data for scenario analysis. For instance, it can provide sales data for a particular period and allow you to analyze trends and factors that could influence sales. 
• Market automation software – In the scenario planning steps, we mentioned that market surveys are essential. With a market automation software tool, you can simplify your research. For instance, you can evaluate your market campaigns to identify the most profitable ones. At the same time, you can spot the less profitable ones and discontinue them. With this tool, you can set the best marketing budgets. 
• Human Resource Information System – The HRIS software is a human capital database. It stores every piece of data you would like to know about your employees. Employees propel your company forward and feel the impact of top management’s decisions. In scenario planning, you need to gather accurate employee data from the HRIS to make scenarios that address recruitment and retention issues. Scenario planning focuses on the financial impacts of events. In this context, it may help answer What-if questions about the onboarding costs, the cost of losing a valuable worker, or the employee turnover rate. 

Scenario planning examples

Organizations had to change their scenario planning tactics after the 2020 COVID-19 disaster. Countless organizations were stable and profitable before the pandemic. All that changed suddenly, as lockdowns and border restrictions emerged everywhere. Considering that most companies had not foreseen such an enormous disaster, some did not survive the aftermath.  The survivors had to begin their scenario planning afresh, considering what had just happened.

That included creating a new set of mitigation tactics and finding ways to stay afloat in future disasters. Older companies had higher chances of survival even without any scenario planning because they had seen the Great Recession of 2008 and similar past occurrences. 

With reduced warehouse operating capacity due to social distancing, delayed shipments and accounts receivables, and massive losses, scenario planners only managed to stay ahead of market trends by studying data from the government and different industries.

Scenario Planning Pros and Cons

The following are the pros and cons of scenario planning:

Pros

• Scenario planning helps decision-makers predict future events from past ones
• It helps the financial accounting department make near-accurate estimates about future prices, customer behaviors, market forces, etc
• Allows companies to predict future disasters and develop strategies for business survival and continuation
• It creates a knowledge base that managers can rely on when they need to save the company without its shareholders.

Cons

• Scenario planning is a complex, expensive, and lengthy process. The data collection step can be time-consuming if the company is huge. 
• Requires constant updates and reviews as the market forces change.

Scenario planning software

We talked about the scenario planning software earlier. It is the tool that could give your planners What-if solutions. The scenario analysis software saves time as it carries out human tasks in a fraction of a minute. The software analyzes a situation’s impact using the most relevant metrics, including ROI, strategic yield, payback, cost, etc. 

With the software’s intuitive wizard, your team can define the scenarios and choose the best portfolios to add to the analysis. You can select the best scenario analysis timeframe and quickly share the outcomes across departments.  

FAQ

Why Is Scenario Planning Important?

Scenario planning can enhance your competitive advantage. It allows you to decide and respond faster to a crisis. After the problem, the managers need only peruse the documented actions and solutions to save the business. 

Scenario planning gives the chief finance officer and other stakeholders the framework for making perfect decisions during an emergency or at any time. It enables them to brainstorm future events using historical data and metrics. 

What is the purpose of scenario planning?

Scenario planning allows a business to prepare for future problems or events by predicting and solving them before they occur. It is a multipurpose business management tool.

Conclusion

Scenario planning is an important tool for businesses to prepare for future events and potential risks. It involves a process of brainstorming, identifying causes and trends, designing a template, creating a scenario, reviewing the scenario, and implementing it. Various tools, including scenario planning software, can be used to facilitate the process. While scenario planning has its pros and cons, it can provide decision-makers with a knowledge base to make informed decisions and respond quickly to crises. Overall, anyone interested in risk management and business strategy could benefit from scenario planning.

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Posted on September 27, 2022December 15, 2023

Cloud Migration: IBM Power system, IBM i (AS400) & AIX

This article would be useful for businesses and individuals who are interested in learning about IBM Cloud migration and specifically the migration of IBM Power Systems, IBM i (AS400) & AIX to the cloud. It provides information on IBM Cloud migration strategy, key features, use case examples, network architecture, connectivity configuration, backup and migration strategies, workload migration planning, migration checklist, storage tiers, and benefits of migrating to IBM Cloud.

As technology advances, businesses are shifting their operations to the cloud. The cloud is the internet. So, cloud migration is the transfer of on-premise business data to the Internet for convenient storage, retrieval, and usage. Companies have several options when planning to do the cloud migration process.  Nevertheless, IBM provides one of the best cloud computing services. IBM Cloud is an integrated service with two cloud computing infrastructures: Platform as a Service and Infrastructure as a Service. In IBM Cloud Migration, you shift your configuration data and applications to a newer version of the IBM Power System. 

IBM Cloud Migration Strategy

A cloud migration strategy is robust for transferring and entering on-premise workloads and co-related data into the cloud. Many cloud migration strategies exist, including rehosting, retiring, re-platforming, refactoring, etc. 

What is an IBM Power Systems Virtual Server?

The IBM Power Systems Virtual Server is an autonomous server within the data management centers. It boasts its networks and storage facilities but utilizes the IBM Power Systems hardware. The Power Systems Virtual server and the IBM cloud server are dissimilar. 

However, those using the former have a range of connectivity choices. Like on-premise software, the Power Systems Virtual Server has an independent certificate. It can use different operating systems, including Linux, AIX, or IBM I (AS400). 

Customers who use this virtual server service can access hardware computing resources and the infrastructure. However, they must manage their OS, data, and software applications.

IBM Cloud Key Features

The IBM Cloud Power Systems Virtual server service includes the following features: 

• Upfront billing – Power System Virtual Server customers should pay a monthly installment to have permission to run the IBM or AIX OS. They only pay for consumption-only resources they add to their Power Systems Virtual Server. Thus, the monthly billing rate is unique to each person’s configuration options and business needs. Those who prefer to use Linux should use RHEL OVA or SLES image formats. This virtual server does not include stock photos for Linux users. 
• Customizable infrastructure – The Power Systems Virtual Server is reliable, scalable, and easy to configure and personalize. For instance, you can alter the server’s memory, data type and volume, virtual server instances, cores, and network interfaces(private or public).  
• Run SAP applications – Do you prefer using the virtual server for SAP HANA or SAP NetWeaver applications? If yes, you should not use the IBM i operating system and custom AIX or Linux images for SAP workloads. Instead, support your SAP NetWeaver workloads via IBM’s AIX OS and stock image. For SAP HANA applications, only use the IBM-preferred Linux stock image.
• Red Hat OpenShift Cluster – The Red Hat OpenShift Cluster simplifies creating Power Systems Virtual Server instances for monthly billing. You can automate the procedure by creating a server cluster and installing the Red Hat OpenShift at once.
• A range of hardware options – Hosting the Power Systems Virtual Server is easy, thanks to an assortment of servers. Customers have several options, from the IBM Power System E880 to S922 to E980. 

Cloud Use Case Examples for IBM Power Systems Virtual Server

When can you use the IBM Power Systems Virtual Server? Situations requiring solutions from this server type are many. To help you understand, see two use scenarios below: 

• The first client wants to use the Power Systems Virtual Server to create a short-lived development and testing environment for AIX and IBM i. Hence, they will need to use the IBM Cloud resources from a distant location to test-run their hardware and OS. By so doing, they can avoid acquiring and deploying an expensive E880 or E980 system to run an easy application test. At the same time, the client can test an E980 system when their small business grows more prominent. 
• The Second client wants to process an enterprise workload in an IaaS(Infrastructure as a Service) setting and still benefit from the IBM Cloud. The IaaS is a traditional platform, and this client can modernize its core functions via the IBM Cloud applications. They might need a Power Systems Virtual Server for Db2 and Oracle or bespoke enterprise apps. Lastly, this client might require the server to manage to acquire several data centers temporarily.

Network Architecture

If you want to try the Power Systems Virtual Server, first understand how to connect it. A Direct Link connection is ideal for those looking to run a private network via the Power Systems Virtual Server. You have two choices: Direct Link Connect 2.0 and IBM Cloud Direct Link on Classic. 

One direct link in an account can handle several Virtual Private Clouds. A Direct Link connection between the On-premise network and the IBM Cloud is fast and reliable. 

How to Configure Connectivity to IBM Power Systems Virtual Server?

An essential thing to establish first is Direct Link connectivity. However a direct link between your internal network and the IBM cloud network is not as easy as you might think. A network configuration process is necessary to make the connection work. So, what are your options? You have up to four options to try. 

1. Connect to the IBM Cloud Classic environment

To connect to the IBM Cloud Classic Environment, here are your solutions:

• IBM Cloud SSL VPN that has a jump server
• Get an IPSec VPN and a VRA
• Connect directly via a Direct Link Connection plus a VRA.

2. Link to the Power Systems Virtual Server Environment

After connecting to the IBM Cloud Classic Environment above, you need a new Direct Link connection to get to the Power Systems Virtual Server.

3. Use Megaport Connectivity Services to access the Power Systems Virtual Server Environment directly

The IBM PS Virtual Server NNI Private Port at MegaPort Connectivity Services allows a direct connection. Before doing this procedure, you must familiarize yourself with IBM’s Service ID. 

4. Generic Routing Encapsulation Tunneling

You need to request access to the PSs Virtual Server’s support case. Also, it would be best if you had the Direct Link Connection to create GRE tunnels manually. 

IBM Cloud Backup and Migration Strategies for IBM Power Systems Virtual Servers (IBM i and AIX Power systems)

1. Backup techniques

Backup methods for Power Systems Virtual Servers users mainly entail the Veeam for AIX and IBM Spectrum Protect. Veeam for AIX backup will only work for computers running the UNIX OS. It provides physical storage solutions using a file-based backup approach. 

The IBM Spectrum Protect backup can protect and store file servers, applications, and virtual objects. The IBM Spectrum Protect can grow with the organization as an extensible backup solution. Users of IBM i, can backup their resources using BRMS (Backup, Recovery, and Media Services. 

They also have the IBM Cloud Storage Solutions for saving and retrieving objects from distant places. The IBM Cloud Object Storage is a caching location enabling you to store your on-premise server files and transfer them via secured links.

2. Data migration

When it comes to data migration, you need MDM. In short, you need a Mass Data Migration strategy to send data to the IBM Cloud Object Storage. This will enable access to that data in your Power Systems Virtual Server. 

For the MDM procedure to work, IBM should first send you an approved device. Then, you should upload your in-house data to this device before transferring it back to IBM. After that, IBM will add your on-premise data to the Cloud Object Storage and save it for future use. 

• Shifting AIX data – If you want to move your AIX, you must use the mksysb command to send data. And for your IP duplication strategy, you need the GLVM (Geographical Logical Volume Manager).  
• Shifting IBM i – You can use BRMS and ICC to shift your IBM i data. To store or retrieve your image catalogs from remote stores like COS, you can merge BRMS and ICC. For activities like network monitoring and instant failover support, use the PowerHA SystemMirror. Lastly, use GeoMirroring plus the PowerHA SystemMiror for logical replication across remote locations.

Workload Migration Planning to IBM  Cloud

Two things matter the most when shifting the workloads onto a new system. First, you need to identify the configuration style and the hosting. Power System Virtual Server hosting requires these IBM systems: E880, E980, and S922. If you choose AIX, you need the 7.1 version or a newer one. IBM i OS shifting needs a 7.1 version or newer one. 

IBM Power system Cloud Migration Checklist

Moving to newer IBM Power Systems requires thorough considerations. See the checklist below: 

• Creating a plan to help you execute the migration process
• Upgrading your current software if you do not have a compatible version
• Determine your LPARs(logical partitions) and create the best processor compatibility modes for them
• Set Virtual Processors for your LPARs
• Do the migration process according to the I/O guidelines
• If you get stuck or not, seek the assistance of IBM Systems Lab Services.

IBM Cloud Storage Tiers for Power Systems Virtual Server Instances

A Power Systems Virtual Server instance has storage tiers. These tiers use IOPS (Input/Output Operations per Second). They include the following:

• Tier 1 – Its current storage settings are 10 IOPs per GB. Hence, it is perfect for applications that need adequate storage.
• Tier 3 – Its storage settings are 3 IOPs per GB. It suits small production workloads.

What are the benefits of migrating to IBM Cloud for a business?

IBM Cloud migration can be beneficial to a business. It can bring about agility and flexibility to its operations. Additionally, IBM migration can lower operation costs, enhance customer relations management, and support those using IaaS and PaaS infrastructures. Cloud data storage allows users to access it anywhere with any mobile device. IBM Cloud is beneficial in several ways, including higher performance and security.

Conclusion

Cloud migration is a vital process that businesses are adopting to take advantage of the benefits of the cloud, such as convenience and flexibility. IBM Cloud provides an excellent platform for companies to migrate their data, applications, and workloads to a newer version of the IBM Power System. The IBM Power Systems Virtual Server is a versatile server that provides users with customizable infrastructure and a range of hardware options to choose from. Additionally, IBM Cloud offers a Red Hat OpenShift Cluster, and customers can run SAP applications and benefit from IBM Cloud applications. However, companies need to carefully plan their migration process and consider factors such as connectivity, backup and migration strategies, workload migration planning, and the IBM Cloud storage tiers. Overall, IBM Cloud migration can be beneficial to a business, and it’s crucial to seek help from IBM data migration services when necessary.

Related article

• What is AS400?
• IBM AS400 ERP SOFTWARE
• Things to know about IBM Solutions

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Posted on September 23, 2022December 15, 2023

What is Legacy ERP? Why need to Upgrade?

This article is relevant for B2B businesses that are currently using a legacy ERP system and are looking to understand why it may not be suitable for their modern customer expectations. It is also relevant for those who are in the market for an alternative cloud-based ERP system and are interested in learning about Ximple Solution’s wholesale distributor ERP and its features.

Enterprise Resource Planning (ERP) software is a crucial business management tool. It comes in two forms, including legacy and cloud ERP. Legacy is the oldest ERP type, while the cloud is the modern kind. We will explain why legacy ERP solutions cannot manage B2B activities in our article today. We will describe the features they lack to meet B2B customers’ expectations. Moreover, we will introduce Ximple Solutions wholesale distributors ERP, compare it to competitor ERPs, and tell you why it makes the best legacy alternative. 

Why is legacy ERP unsuitable for running modern B2B organizations?

A B2B business must focus on its relationship with customers and value-added partners. Having the best ERP software can help your company enhance those relationships. It had better not be legacy ERP because it is old, rigid, expensive, and complicated. To compete effectively with your B2B rivals, do away with legacy ERP and embrace cloud ERP. Here are the reasons why legacy ERP can no longer meet the needs of modern B2B customers. 

•  Inflexible and complex – Legacy is on-premise ERPs, making them rigid and complicated. Customizing legacy ERP is hard. If you try it, you can trigger issues in other business systems. Inflexibility, rigidity, and complexity make legacy ERPs inapt when looking for growth opportunities. A more robust and extensible cloud ERP system is more reliable when moving to new markets or developing new product lines. 
• Lacks scalability – The best ERP system for distributors should help them respond quickly to change. Unfortunately, legacy systems are not scalable. They will not help you take advantage of new opportunities before your rivals see them. Also, they will not let you solve customer complaints, respond to shifting demand patterns, or make decisions promptly and accurately.
• Outdated and immobile – Forward-looking B2B organizations recognize their employees’ role in improving sales, revenue, and customer relations. Hence, they capitalize on modern technologies to help their workers become as productive as possible. Those still using legacy ERP put their employees through the torture of working with an outdated system. Some of these workers are millennials who cannot stand obsolete ERPs. They instead want a system they can access from anywhere, anytime. Legacy ERPs are office-based. So, they are immobile and impossible to access from anywhere.
• Complicates legal compliance – B2B distributors must comply with stricter regulations than before. Those still using legacy ERP systems cannot meet the ever-changing government policies for businesses. An outdated enterprise resource planning tool cannot accommodate unceasing policy changes. As legacy ERPs use Excel spreadsheets and manual data entry methods, they create room for error. Inaccurate data is unreliable and can lead to compliance issues. Besides, correcting mistakes can be expensive.
• Lacks crucial ERP features and benefits – Legacy ERP cannot meet the demands of modern B2B companies because they lack essential features found in cloud ERP. Legacy systems are more expensive to maintain because they run on in-house servers. On the other hand, cloud systems are more flexible, adaptable, and cheaper to use because the vendors incur maintenance costs. Cloud ERP systems provide extra features that help customers achieve all their goals. With the traditional legacy ERPs, you are stuck with an inextensible system with no agility. It is easier to take advantage of business intelligence, artificial intelligence, robust encryption and security, and other up-to-date features with cloud ERP software. You can afford to expand your B2B organization beyond your national borders.

Why Ximple Solutions Wholesale Distributor ERP is the best alternative

If you run a legacy ERP, you should not hesitate to change it. It would be best to substitute it for a cloud ERP at once. Ximple Solutions is among the best legacy ERP alternatives. First, it is ideal for wholesale distributors. If you are a distributor, Ximple ERP is the best software for managing your supply chain, regardless of size. 

Ximple Solutions ERP covers all areas of distribution business management. As cloud software, Ximple ERP produces accurate live data for everyone’s perusal. Hence, it promotes confidence and promptness when making managerial decisions. A highly customizable cloud ERP system, Ximple Solutions works better than its rivals. 

As a result, Ximple wholesale distributor ERP can help you meet B2B customer demands and solve their complaints in real time. It solves all legacy ERP problems. Below, we will show how Ximple Solutions ERP compares with its competitors’ ERPs based on the following characteristics.

• Scalable– Ximple ERP for wholesale distributors is scalable. Although its competitors’ ERPs are also scalable, Ximple Solutions’ software is better because it is highly agile. In contrast, its competitors provide structured ERPs. Scalable but super agile ERPs offer several modules, advanced reporting capabilities, flexible workflows, ease of adding users, and web-based platforms for mobile users. 
• Adaptable – Ximple ERP system entails microservice/APIs for internal and external integration. Offering user-friendly template models, Ximple Solutions ERP is highly flexible and reliable. It will accommodate your business requirements even if they are complicated. Whether you own a multinational organization with several teams or a small enterprise with one premise, you can adapt Ximple ERP to your requirements. On the other hand, competitor software options are static and not easy to customize according to your needs. 
• Visibility – Ximple wholesale distribution ERP provides real-time data. In contrast, competitors’ ERPs provide batch data. Real-time data is more reliable because the processing occurs right after capturing information. Batch data is less reliable because processing starts only after gathering adequate information. The system only processes batches of data rather than small pieces of it. Ximple ERP provides live visibility from one end of the supply chain to the other. 
•  Process orientation – The best ERP for distributors should be customer-oriented. After all, no business can succeed without customers. Ximple ERP focuses on the customers’ needs, allowing you to react to their complaints and requirements on time. On the other hand, its rivals’ software systems emphasize back-office activities. Although back-office activities like record maintenance, legal compliance, settlements, IT services, and accounting are vital, they should not come before client-facing activities. Customers will trust your brand more if they receive top-notch services and attention. That’s why an ERP with a robust and focused CRM module is more reliable. 
• Configurable- Ximple wholesale distributor ERP is a dynamic order orchestration platform. Due to its configurable and versatile features, Ximple makes the sourcing and order fulfillment process simpler. Its order management solutions cover all the stages, including sourcing, inventory management, customer service, order alterations, sale closure, shipping, and returns. On the other hand, Ximple Solutions competitors provide a system of record that may not meet all business environment constraints. 
• Channel support – Ximple ERP solution provides an Omni-channel system while its competitors offer limited channel support. Omnichannel customer service is the best choice because it can ensure consistently high customer service standards. It is a network of integrated devices that enable flawless communication no matter the channel. An omnichannel customer support service relies on various advertising tools, including web push notifications, social media ads, SMS marketing, and email marketing. Ximple ERP system is compatible with many languages and languages. Therefore, it can help your business meet international customers’ requirements. Tax requirements compliance and other international barriers to doing business are easier to overcome with Ximple Solutions ERP.

Conclusion

In conclusion, legacy ERP systems are outdated and unsuitable for modern B2B organizations. They lack the flexibility, scalability, mobility, compliance, and crucial features needed to meet today’s B2B customer expectations. Cloud ERP systems like Ximple Solutions Wholesale Distributor ERP provide a better alternative to legacy ERP. Ximple Solutions ERP is highly customizable, scalable, and adaptable, offering real-time data and process orientation. It also provides configurable order orchestration platforms and omnichannel support, making it the best option for wholesale distributors. Transitioning to Ximple Solutions ERP from legacy ERP can help businesses meet B2B customer demands and enhance their supply chain management.

Related topics

• How to Select The Right ERP System?
• What is Future of Cloud ERP?
• What is Cloud Based ERP Systems and How does it Works?

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Posted on September 6, 2022October 1, 2024

How can ERP technology help distributors become value-added partners?

This article is relevant to wholesale distributors who want to become value-added partners in their industry. It explains how ERP technology can help distributors achieve their goals of improving sales, reducing costs, enhancing collaboration through data sharing, and building closer customer relationships. It emphasizes the importance of an open-architecture ERP system for distributors to manage disruptive forces and changes in the wholesale distribution industry.

Wholesale distributors should understand their industry well to become value-added partners (VAPs). Value-added partners are independent distributors who unite to manage the whole supply chain as a team. Each VAP uniquely contributes to the team affairs to ensure combined success. When VAPs join forces, they run the value-added chain at a reduced cost. VAPs need to be financially strong business associates. One way to become a viable VAP is by implementing the best ERP software for distributors. 

What is Distributor ERP?

ERP is one of the modern software technologies that simplify and enhance communication between value-added partners. ERP for distributors is an industry-specific software system for addressing disruptive forces and inflection. Distributors must cope with new customer demands and expectations, increasing competition, expanding digitalization, new product innovations, and other challenges. 

As the wholesale distribution field constantly shifts, value-added partners must still navigate it and stay stable. The industrial ERP software system is among the best tools for that purpose. But how can your company use ERP technology to become the best value-added partner? It has to attain the following goals via industrial distributor ERP.

Improve sales

Enhancing sales should be the aim of every business. Wholesale distributors should take this more seriously because they work in a competitive B2B market. Without the best ERP for distributors, they cannot capitalize on the rising customer demands to improve sales. 

There is a direct connection between service levels and inventory levels. Traditionally, you must have higher stock levels to enhance your customer service. Things are different today because you can use ERP software to improve service levels without increasing your inventory levels. You need an ERP system with an open architecture for this process to work. 

A traditional ERP system has a closed architecture with siloed, erroneous, and inconsistent data sources. ERP software for distributors is versatile, scalable, highly customizable, and extensible. Due to its open architecture, this ERP is simple to augment with the most reliable order and inventory management solution to avoid losing sales. 

Advanced ERPs can unify different data sources to show the actual inventory levels available to customers. Wholesale distributors aiming to become the best value-added partners can use real-time inventory insights to provide adequate inventory levels for proper order fulfillment. 

Moreover, proper inventory tracking and visibility can allow VAPs to improve customer experience when handling complex orders. They can provide accurate order delivery estimates to gain customers’ trust and loyalty.

Reduce costs

Besides investing in the best cloud ERP for distributors, companies aiming to become the best value-added partners should embrace big data analytics and business intelligence. Dealing with massive data levels is unavoidable today.

With inefficient data capturing, analyzing, storing, and responding to methods, wholesale distributors can lose their competitive advantage. 

Besides, the cost of managing excessive data levels with inefficient techniques is high. This is why companies can become better VAPs by finding innovative data management methods, including BI and big data analytics.

• They can minimize human error through their automation capabilities.
• With artificial intelligence, distributors can avoid depending on humans to choose the best ways to source and deliver orders. AI can assess different order fulfillment choices and select the most cost-effective option. 
• Advanced cloud ERP software for wholesale distributors can allow you to lower inventory management expenditures.
• As ERP provides a real-time view of inventory units, distributors can identify redundant expenses and do away with them. 
• Distributors can avoid harsh penalties for unmet contractual demands by employing the modern data analytics systems mentioned above. These smart supply chain management tools can help distributors fulfill orders on a priority basis. Thus, they can first deliver the most urgent orders to evade penalties. 

Enhance collaboration with data sharing

Organizations that do not work together do not need to share valuable data. After all, sharing data with a competitor is more like giving away your success secrets. In contrast, value-added partners should embrace data sharing to enhance their teamwork. If they trust each other, they should not fear sharing success tactics.

Data sharing among distributors who work as a team can provide real value to their association. Data sharing can offer these benefits to all stakeholders in your VAP team.

• Efficient resource coordination – Data sharing allows distributors to channel resources where they can be financially beneficial. 
• Improve customer experience – Accurate data sharing across the supply chain improves visibility. Thus, it helps every participant play their role promptly so the team can deliver goods on time and in proper condition. In return, customers can feel satisfied and develop undying loyalty to the company. 
• Saves delivery cost and time – Data sharing can help united distributors deliver goods to the correct customer faster by tracking distance. They will identify who among them is closest to the customer and has what they require. If that person delivers the goods to the customer, the team can save time and money.
• Improves supply chain visibility – Via distributor ERP software, every VAP can receive up-to-date data from different sources. They do not need to call or write an email to gather vital information. Real-time visibility of the value chain allows participants to be self-reliant and react swiftly to unanticipated events.
• Increases profits – Better supply chain visibility via distributor ERP system elements promotes decision-making on sourcing. Distributors can act upon shifting customer demands, track orders and inventory levels, and raise their odds of making higher profits in peak times. 

Closer customer relationships

You must mind how you relate with your customers, no matter what type of wholesale distribution business you do. Also, if you want to join forces with other distributors and become the best VAP, you must demonstrate your ability to serve customers right. An industrial distributor’s eCommerce ERP system is one of the tools you require to serve customers well. 

It automates different processes, enabling distributors to access a central database when they need to learn the truth. Investing in ERP software for food distributors or any other field can help meet your customers’ expectations. Offering personalized eCommerce experiences is possible with distributor cloud ERP. 

For instance, you can create pricing options and product catalogs to meet customers’ expectations. Also, you can enhance customer relations by making the most straightforward online ordering process to encourage self-service. Customers cannot see the need to shift to the next vendor if they can understand the entire order placement process without making a call. 

In short, customers can feel more confident and trust you to deliver their goods on time. Investing in distributor ERP, artificial intelligence, and other technologies that produce intelligent data insights can promote customer confidence and trust in your brand. If customers feel satisfied, they will buy repeatedly and boost your revenue. 

ERP is one of the best value-creation tools as it can manage customer relations. Value creation works only if customers and distributors unite and work harmoniously. Besides, distributors will only thrive if they can attract new customers and retain the existing ones. Distributors’ software ERP can help you improve customer relations via the CRM module. 

A customer relationships Management (CRM) module can help you review each customer relationship and categorize your target audiences based on their needs. If customers have complaints, your CRM will help you respond to them quickly and efficiently.

Conclusion

Wholesale distributors can benefit from implementing ERP technology to become value-added partners. By improving sales, reducing costs, enhancing collaboration with data sharing, and building closer customer relationships, distributors can enhance their competitiveness in the market. An open-architecture ERP system is a valuable tool for distributors to manage their supply chain efficiently and navigate the challenges of the constantly shifting distribution landscape. While implementing an ERP system can be costly, the long-term benefits of increased efficiency and profitability make it a worthwhile investment for distributors looking to succeed in today’s market.

Related topics

• Best Distribution ERP Software in 2022
• How to Select The Right ERP System?
• Why is Digital Inventory essential to drive up profitability?

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Posted on September 6, 2022October 1, 2024