Software as a Service gives Small-scale distributors
a leg up
BY DAVE GETTY
Special to The Wholesaler
It is no secret that wholesalers, regardless of size, face even more challenges than conventional business people. As margins gradually erode, consolidation increases and international competition continues to intensify, wholesalers must find ways to keep up.
Many look to improve efficiency and streamline processes by implementing Enterprise Resource Planning (ERP) software throughout their businesses, touching everything from inventory to purchasing to accounts receivables.
Mid-sized and larger wholesale distributors have the capital to invest in robust ERP software and hardware, giving them a significant advantage over their smaller brethren.
Historically, most small-scale wholesalers leveraged in-house, conventional accounting software packages, or simple spreadsheets to run their business. This allowed them to maintain their operations in a limited capacity, but did not provide any strategic advantages or promote growth.
Until recently, small-scale wholesalers had very few options in terms of investing in a viable ERP system, but the advent of advanced technology gives them greater choice.
The SaaS trend
Over the past few years, there has been a shift in the method of software delivery, referred to as Software as a Service (SaaS) or cloud computing. SaaS is becoming much more prevalent due to the improved bandwidth for data delivery and the pervasiveness of high-speed Internet connections among small businesses. It allows companies with limited hardware infrastructures to use software over the Internet in the form of a complete service. In most instances, access can be gained by simply logging on to a central website or another Internet-enabled application. Applications that can be leveraged as an on demand service include word processing, CRM tools and ERP applications.
Leveraging an ERP system is a necessary progression for wholesale distributors to continue to promote expansion, and maintain their position in actively served markets. This is especially applicable to smaller distributors who must take advantage of every opportunity that presents itself to maintain healthy growth.
SaaS geared towards smaller distributors
The advantages of leveraging a SaaS to run a business include the relative ease of technical setup and implementation. The dramatically lower upfront capital investment allows small wholesalers a better cash flow while keeping costs low.
These lower start-up and maintenance costs, combined with a reduced need for infrastructure and staff resources to run high-powered systems, enable distributors to finally take advantage of the process improvements and business intelligence tools that help them make better business decisions.
Another major advantage is the hands-off approach in terms of managing and maintaining hardware servers, databases and software. While larger wholesalers have the resources to devote to these tasks, smaller wholesalers do not. The SaaS model allows smaller wholesalers to use the same tools their larger counterparts use, but without committing valuable time and money to administering the system and maintaining the infrastructure. What’s more, the SaaS model essentially puts technology experts at your disposal without putting them on your staff. Those experts will run your system remotely in world-class data centers with world-class operations that include data back-ups and failover processes.
The only certainty that can be applied to business is the concept of change. With the odds stacked up against small businesses and especially small-scale wholesale distributors, change in the form of technological improvements can be the key differentiator between the 10% that succeed, and the 90% that have to start all over again.
Dave Getty, director of development for Activant®, is an expert in software for wholesalers. He can be reached by e-mail at distribution@ activant.com or by calling 800/776-7438. Activant provides distributors with the software and services they need to streamline processes, increase sales, improve customer service and reduce operating expenses. Find out more at distribution.activant.com.