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March 04, 2016
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With the presence of numerous players in each segment and sub-segment, the consumer goods market is an extremely competitive space. As consumers are offered enhanced choices, enterprises have to continuously devise ways of remaining competitive. The growth of user-centric enterprises is driven by the retention of old customers as well as the acquisition of new ones, and businesses are facing increasing pressure to come up with solutions in this regard as consumer expectations increase. Enterprises across different verticals have begun focusing on making their sales and distribution networks more robust so that they can respond to the changing industry dynamics. They have recognised the massive role of information and communications technology and are leveraging telecom and IT infrastructure to build a dynamic, flexible and scalable model.

tele.net takes a look at the emerging technology trends in the sales and distribution space…

Consumers go digital

With the proliferation of smartphones and high-speed networks, consumers are spending much more time online. This has led to the emergence of a host of online goods delivery platforms, which are fast changing sales and distribution technologies. In this digital era, consumers interact with enterprises through multiple channels, leading to the declining appeal of physical points of presence as primary point-of-sales interactions. To utilise the opportunities that have come up with the digitisation of communication, enterprises are evolving from being pure retailing centres to encompassing many more aspects that contribute to customer experience.

A significant development in this regard is the increasing use of data analytics. Apart from providing the necessary data to push new product promotions for retailers and distributors, analytics helps enterprises create real-time offer management capabilities and target consumers in a better manner. Even though analytics already exists as a capability in most enterprises, its access by sales and distribution systems in decision-making processes is still limited.

Well-established and mature enterprises have been slow to embrace online channels, but it is only a matter of time before the benefits of digitisation make it imperative for all businesses to have an offline as well as online presence.

For instance, automotive manufacturers still rely on offline channels for marketing and selling automobiles. However, dealers are facing competition from new rivals that are using digital marketing technologies to siphon profits from the automotive value chain. Along with dealers, automobile manufacturers are now being forced to build first-class digital sales and marketing capabilities to remain relevant. This is possible only by making fundamental changes in the role of dealers and geography-based distribution systems, which have not been designed for online marketplaces as traditional sales and distribution systems lack these capabilities.

Use of enterprise applications

To streamline operations and increase efficiency across sales and distribution chains, enterprises are increasingly adopting specialised applications. In this regard, customer relationship management (CRM) is one of the oldest applications. While it traditionally helped organisations maintain and strengthen relationships with consumers through email and SMS, CRM has now evolved into a more intelligent form. Enterprises are becoming consumer-centric and relying on personalised experiences, and this focus has led retailers to experiment with newer models of customer involvement. The consumer’s role has grown from being a feedback source to that of an active participant in the entire user lifecycle.

Meanwhile, supply chain management is helping enterprises streamline business processes and bring in greater efficiency. Together with enterprise resource planning (ERP), logistics and point-of-sale applications, it helps in keeping track of inventory and product locations. In fact, applications are rapidly substituting traditional means of communications like phone calls and SMS.

As enterprises expand their presence across geographies, sales force automation becomes a key element in their operations. Business communications have now shifted to mobile devices and the internet. The use of web-based systems is increasing as all employees of an enterprise do not necessarily have access to the same hardware, neither do they work at the same location. In such a scenario, systems hosted on business VoIP and cloud-based email servers are better options as they only require web browsers. In addition to email and phone communications, businesses across industry verticals have begun to embrace texts, chats, videos, file sharing and screen sharing. This has increased the uptake of unified communications, which has emerged as an effective solution for managing the overload created by multiple mediums.

Emergence of cloud

Cloud is changing the way enterprises operate by having an impact on the manner in which technology is delivered and consumed. It has helped them reduce the costs of maintaining IT infrastructure and running enterprise applications and enabled them to save on data centre costs.

The rate of cloud adoption is particularly high in Indian start-ups. The platform offers savings in terms of infrastructure costs; by using software-as-a-service and platform-as-a-service, these start-ups are only paying for what they use. As their client base grows, they can ramp up their use of technology without having to invest massive amounts of capex.

While the interest in cloud is increasing, businesses are cautious in their approach towards this solution. Most of them opt for migrating a specific business application to the cloud rather than taking up the full-fledged migration of enterprise applications. Data management and governance pertaining to the movement of sensitive data between various clouds and on-premise applications is another critical issue. This problem is more acute in a public cloud environment than in a private cloud where information and applications are still under the direct control of enterprise IT teams.

Despite the obvious benefits, security, data management and integration concerns are deterrents in cloud adoption. Most cloud systems leverage different interfaces to access data and different cloud vendors can have their own approach to data storage and access. To ensure that the benefits of cloud services are seen widely, there is a need to move beyond merely delivering IT at a lower cost to delivering tangible business benefits. Cloud service providers will need to involve enterprises in choosing services relevant to their organisation to help them realise the benefits of cloud.

Emerging trends and the way forward

While most industry experts believe that there is a rising uptake of business applications among enterprises, there are some who contend that this has not been matched by the increasing use of these solutions. For instance, while enterprises might install ERP software, its actual usage is not always guaranteed. This is especially true for the Indian sales and distribution industry, which is very mature and resistant to change. In any case, new technologies take time to be adopted in a big way.

However, young enterprises, which are increasingly based online, are looking at deploying advanced IT infrastructure to enable greater customer acquisition and drive growth. They also pose competition to traditional offline channels in an era where consumers can be targeted anywhere at any time owing to the ubiquity of mobile devices. Enterprises that do not make the change towards digital platforms might find it difficult to compete and handle operational aspects in introducing new kinds of partners and products. Therefore, any system meant for supporting sales and distribution must gear up to meet the demands of the digital era.

Meanwhile, as enterprises adopt more and more technological solutions, there is a rising awareness about the threat to business data. Protecting business communications has emerged as a key priority for enterprises when spending on telecom infrastructure. Businesses are expected to invest more in securing their communications networks, marking a shift from earlier technologies that did not place security at the foundation of a solution.

Going forward, enterprises are likely to increase their investments in IT and telecom. Despite the potential cost savings of web-based communication solutions, their implementation and the requirement of security infrastructure  will contribute to an increase in overall IT spending.

Moreover, the emergence of new communications technologies will require enhanced IT capabilities at all levels, especially in sales and distribution, so that enterprises can deliver a consistent IT experience to employees and customers.

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