Within distribution there is a continuous, and increasing, call for distributors, manufacturers, and manufacturer representatives to “invest in technology.” And I would presume that companies are spending more on technology / digitalization than ever before. It may not show up in the IT budget, but marketing, pricing, sales, warehousing, manufacturing and other departments now have some type of marketing spend.
And this does not include what companies have invested into websites, eCommerce, personnel and more.
This “digital transformation”, which in reality is an evolution, really is a BOAT but, for companies with vision, it can have an ROI if “soft” benefits such as customer service, customer retention, employee productivity, business scalability, redundancy, training and more are considered. Consider what is going on in the labor market? With unemployment at 3.5%, technology is needed to automate rote functions to enable business scalability.
I would venture to guess that at least 97% of the industry works with one technology supplier … Microsoft.
Everyone, for better or worse, is well acquainted with Teams! Most use tools from Microsoft Office (Excel, PowerPoint, Word and more). Others know Power BI as an analytics tool. Companies use their tools to manage their network. From a cloud perspective Microsoft’s Azure is the #2 cloud platform.
Microsoft is already contributing to the electrical industry. Other than being a software tool, many are benefiting from exponential growth of the data center market. In fact, when John Engel from Wesco talks about secular growth as one of the reasons for the Wesco / Anixter merger, technology markets (data centers, networking, and the power needs (grid / utilities) is what he is referencing.)
And this is just scratching the surface.
While Microsoft created a buzz when it announced a significant incremental investment in OpenAI, many didn’t understand it until March when ChatGPT roared onto the scene. Now everyone is talking “AI” and wondering how it will change work, and more. In fact, Microsoft is already adding functionality to Microsoft Office.
But a few months ago, amidst all of the digital transformation discussion and AI talk, and the myriad of software companies that tout how they can help the industry, I started a project with a distributor where we envisioned what their “IT” department could / should be.
I asked why it should be a cost center? Perhaps it needed to be rethought of as a profit and productivity center and needed to be measured based upon “customer” satisfaction.
This led to envisioning. Which led to “what will AI / ChatGPT” or similar tools be able to do for distributors, manufacturers, and reps? Which then led to, since companies are using Microsoft and Microsoft is a / the leader in some of this “AI stuff”, why not talk to Microsoft.
But, due to Microsoft’s go to market strategy, who could / should a distributor (or others), talk to?
So I spoke to longtime friend Matt Petersen, who works for Microsoft and said “how can we help the electrical channel better understand ChatGPT / AI and the tools that Microsoft has, and is bringing to market, that can help the channel power their business to increase sales and profitability?”
Now, Matt is not a salesperson. He actually understands distribution.
He told me about some tools that have recently been rolled-out that are being used in other distribution channels. Could they be used by you?
And, as you get comfortable with the tools, consider what the future could be …
- The industry creating its own large language model for products?
- How will AI improve warehouse operations?
- Could an industry large language model be integrated into company data to create customized applications?
- Will AI tools plus distributor data (product, sales, pricing, and more) plus weather models and geographical tools redefine pricing strategies?
- Could lighting take-offs be integrated with lighting rebates, lighting databases and more to streamline the quotation process … and eventually generate 3D lighting models that show the spread of light? (maybe there is a value in the metaverse concept!)
As always, we appreciate your comments and feedback
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