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Digital transformation helps distributors survive in challenging environment

Global distributors are investing in digital transformation, circular economy practices and servitisation to combat a challenging business climate, claims Sage in a new report. 

Global distributors transform to adapt, survive and thrive, produced in partnership with IDG, reveals that almost 80% of distributors currently have a digital transformation strategy in place to improve customer service/experience (39%), implement cloud-based apps (37%) and improve e-commerce capabilities (36%). 

While nine out of 10 distributors have found implementing new technologies into their operations a challenge due to a lack of in-house expertise and high associated costs, most have already realised significant benefits from digitisation. 

These include cost reductions (45%), improved data security (45%), faster delivery (42%) and better customer service and experience (39%). 

Key enabling technologies include the cloud, with most distributors now running core business applications on the public cloud (42% describe themselves as early adopters of the cloud, with a further 22% claiming to be innovators), robotic process automation (RPA) used by 81%, and the Internet of Things (75%). 

In response to growing pressure from consumers and legislators for more sustainable business practices, 75% of distributors have adopted a circular economy strategy to reduce their carbon footprint (39%), address environmental concerns (38%), increase productivity, efficiency and resiliency (32%) and improve competitiveness (31%). 

Three quarters (74%) say they are finding it difficult to align profitability with sustainability goals, such as waste reduction and the operation of local supply chains to reduce mileage. 

Commenting on the report findings, Rob Sinfield, Sage VP Product, said: “Across the board, distributors are leveraging business cloud applications powered by AI and automation, the IoT and data analytics to improve their operations. They’re using this new and emerging infrastructure to drive efficiencies, build more agile supply chains and meet with customer demands to improve sustainability. It’s an interesting time for distributors as they embrace new models like the circular economy and servitisation to drive growth and remain competitive.”

https://www.sage.com/en-gb/cp/ idgdistributionreport/#download

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2020