ERP for Distributors in 2024
The distribution industry is undergoing major transformations in 2024 as Enterprise Resource Planning (ERP) technology continues to advance. Adapting to key trends in ERP software is important now more than ever for distributors who want to stay competitive in the market and optimize their operations.
This article outlines the top 10 ERP trends that distributors should know about in 2024. As we move deeper into the new year, your business needs to keep up with innovations in ERP software to streamline processes, gain insights and meet customer demands. The distribution landscape is rapidly changing thanks to new ERP capabilities such as artificial intelligence, advanced analytics and cloud platforms.
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The Growing Significance of ERP Systems in Distribution
The distribution sector has weathered a storm of difficulties over the past 12 months, including rising prices, wary consumers and a weakened economic climate. As we gaze ahead, these ERP trends seem destined to persist, underscoring the critical need for adaptability and agility for distributors.
With today’s fast-moving business landscape, your business can ill-afford to bide time awaiting sales trend analyses or economic variable reports. Instead, the immediacy of real-time transparency into all facets of your operations helps you make informed decisions at a moment’s notice.
Outdated, siloed systems can’t provide the comprehensive insights you need. This is where Enterprise Resource Planning (ERP) systems come into play. ERP systems integrate accounting, finance, sales, marketing and operations information into a single centralized system. This eliminates fragmented data silos and provides instantly accessible analytics. With a comprehensive overview of your business and data-driven insights, ERP solutions empower your company to make informed strategic decisions.
Distribution companies yet to embrace next-gen ERP software may struggle with change in 2024. But those leveraging real-time integrated data in cutting-edge systems can thrive. The competitive advantage goes to agile organizations that can respond quickly to shifting conditions. This year, rapid adaptability powered by ERP software will separate market leaders from the rest. The time to prepare is now.
Key ERP Trends for Distributors in 2024
1. Cloud-Based ERP Software
The most dominant ERP trend for distributors to embrace in this upcoming year is the transition to cloud-based ERP software platforms. Cloud ERP has gained immense traction in recent years and its popularity will continue to surge in 2024 as an essential platform enabling businesses, rather than something that might improve business processes.
According to IDC, by 2024 approximately 75% of ERP software will be deployed on cloud-based solutions, underscoring the accelerated adoption as the market continues to grow. Distributors that migrate to the cloud stand to harness substantial advantages that can drive competitiveness, including:
- lower total cost of ownership
- better visibility with real-time insights
- a reduction in repetitive tasks
- faster implementation
- automatic updates
- scalability to support business fluctuations
- reduced IT infrastructure and maintenance burdens
- real-time access to organizational data from anywhere
By eliminating large upfront investments in on-premise ERP hardware and instead utilizing convenient pay-as-you-go or subscription models, businesses can realize significant cost savings. Cloud ERP software also enables much quicker deployment, allowing your company to get up and running in weeks or months rather than the years it often takes to roll out on-premise solutions and integrate complex modifications. The accelerated speed-to-value in a cloud ERP system is a key driver boosting returns on investment.
The automatic updates feature ensures that the constantly evolving ERP releases, fixes, enhancements and innovations are immediately available to cloud users at no additional upgrade cost, unlike other systems, such as on-premises systems where sizable upgrade projects are required. Because cloud platforms readily scale up or down to match your business expansion, businesses in industries with seasonal fluctuations and growth peaks have the flexibility and agility needed to adapt quickly.
By 2024, assessing cloud ERP options will become an urgent imperative for distributors rather than a distant consideration. Those who modernize onto cloud-based platforms will gain the agility, mobility, resilience, real-time data access and performance advantages needed to outpace rivals who delay the move.
2. Artificial Intelligence and Machine Learning in ERP Software
In addition to cloud migration, exploiting the immense power of artificial intelligence and machine learning is another ERP trend for distributors to embrace in 2024, as these technologies transition from convenient capabilities to must-have necessities. According to Gartner, over 80% of ERP solutions will leverage AI and machine learning features by 2025, highlighting the scale of integration. By choosing ERP software that has built-in predictive analytics and intelligent features such as integration for IoT devices, your business can unlock transformative benefits ranging from predictive forecasting to process automation to personalized recommendations and enhanced decision making.
The predictive insights from machine learning algorithms help your company with supply chain management by accurately forecasting demand, optimizing inventory levels and enhancing supply chain efficiency by detecting patterns within data and extrapolating possible future trends. This enables data-driven decisions rather than guesswork for critical areas such as procurement, capacity planning and workforce management.
AI allows your company to automate repetitive, redundant and routine finance and operations tasks, freeing up human employees from routine tasks, enabling them to focus on higher-level strategic roles that drive growth and innovation. ERP systems embedded with AI provide customized workflows, individualized search results and personalized recommendations tailored to each user based on their talent strengths, behavior patterns, role and preferences.
The data crunching and analysis capabilities of AI also enhance the speed, quality and effectiveness of decision making across the enterprise by continuously assessing massive amounts of information, uncovering problems and recommending the most optimal solutions. By integrating ERP platforms with continually advancing AI and ML capabilities, distributors in 2024 can reach new heights of productivity, speed, forecasting precision and competitive differentiation.
3. Internet of Things (IoT) and ERP Software Integration
IoT technology integration with ERP platforms will become a crucial development for distributors in 2024. Access to meaningful real-time data and information about operations will be greatly improved by these technologies. This enables you to monitor inventory levels, the activities within the supply chain and the status of your equipment at all times. Thus, your company will be able to make informed decisions quickly.
Your business can leverage these capabilities to make data-based decisions that drive supply chain efficiency, cost efficiencies, operational efficiencies and customer deliveries. For instance, IoT sensors can supply live information about product availability in stock to automate inventory management. Monitoring with IoT also enables predictive maintenance of equipment.
The integration of IoT and ERP systems will enable distributors to have enhanced visibility across their businesses, improved efficiency and enhanced customer satisfaction—and all of these are key to keeping ahead of competitors in the industry.
4. Blockchain in ERP Software
While still in its early phases, blockchain is another technology that offers tremendous potential to transform ERP systems, and its integration will accelerate in 2024 according to industry thought leaders. Blockchain enhances security, transparency, efficiency and trust in ERP platforms through its distributed ledger infrastructure and decentralized consensus-driven verification protocols.
Blockchain’s distributed ledgers provide enhanced protection against cyberattacks and hacking by eliminating single points of failure. The emphasis on consensus verification before transactions are approved reduces the potential for fraud and errors by requiring multiple points of independent authentication. The ability to create detailed transaction records that are immutable and tamper-proof in a decentralized blockchain database also fosters greater transparency and accountability across ERP processes.
Distributors can grant strategic partners selective visibility to approved transactions to build trust and collaborative relationships. Smart contracts that trigger automated workflows once conditions are fulfilled also enable streamlined, paperless processes. According to Deloitte, 55% of companies plan to adopt blockchain technology by 2024 as more integrate it into ERP systems. Evaluating ERP systems that harness blockchain alongside artificial intelligence and the Internet of Things will provide your company with an integrated technological foundation for the future.
5. Emphasis on Differentiation
While technology integration is crucial, thought leaders emphasize that distributors must also focus on differentiating their products, services and customer experiences in 2024 to drive sustainable growth amid intensifying competition. As customization, personalization and distinct user experiences become expected, forward-thinking distributors will seek to differentiate their businesses through tailored solutions aligned to local customer preferences.
Conducting demographic and buyer preference analyses of target regions and customer segments will inform which product or service adaptations may resonate best. Your business may customize certain product components and features or bundle complementary offerings such as delivery, installation, training or other value-added services that surround your core product with greater appeal.
Developing private label brands is another avenue to address niche needs ignored by mass-market national brands while fostering customer loyalty. Geographical customization allows your company to adjust elements such as packaging, materials, sizing or design to better match the preferences of different regional demographics.
Leveraging integrated ERP and CRM data provides customer intelligence that allows your company to craft highly personalized offerings. The most successful distributors in 2024 will be those who harness data sources and technology to deploy precise customer solutions while sculpting their business around the unique needs of local and niche markets through strategic adaptability.
6. Supply Chain Efficiency
Optimizing the supply chain resilience and agility will also play a major role for distributors who want to quickly adapt to volatility, disruptions and shifts in customer demands in 2024. Industry experts emphasize building flexible, responsive global supply networks supported by integrated ERP visibility and collaboration capabilities.
Creating multi-sourced supply chains reduces risk exposure to sole suppliers. ERP integration with IoT sensors and GPS trackers provides real-time supply chain transparency down to the pallet and package level to swiftly identify delays and disruptions before they escalate.
Conducting scenario analysis will be crucial for your company to assess potential supply chain risks—such as natural disasters, cyberattacks or supplier bankruptcies—and develop contingency plans to redirect orders and safeguard uptime. Collaborative demand planning, inventory optimization and production scheduling with partners and suppliers also helps balance fluctuations in volumes and meet surges effectively.
Self-service supplier portals enable on-demand onboarding of new suppliers to expand capacity quickly when needed. Combined with upstream and downstream data visibility across the value chain, advanced ERP analytics delivers actionable insights to enhance supply chain agility and resilience in the face of volatility.
7. Sustainability Practices
Sustainability is another essential trend that industry thought leaders strongly encourage distributors to embrace in 2024, as environmental considerations become urgent priorities for consumers and regulators.
Your company must align ERP-enabled operations, supplier collaborations and inventory management processes with renewable energy, waste reduction and emission-lowering goals. Optimizing packaging sizes and materials as well as transportation plans improves carbon footprints, transport efficiency and recyclability.
The right ERP system brings important data visibility, letting you precisely measure greenhouse gas emissions for your entire company, your customers, as well as upstream and downstream supply chain partners. These insights allow your company to pinpoint high-impact areas to reduce environmental footprints and even develop closed-loop circular supply chains that recapture, reuse and recycle materials.
IoT data integrated with ERP helps monitor energy consumption patterns to identify savings opportunities. Rather than treating sustainability as an after-thought, forward-looking distributors are advised to transform ERP systems into central “sustainability cockpits” to drive measurable environmental impact reductions. Doing so will future-proof branding and prevent non-compliance penalties in response to tightening regulations on carbon emissions and waste.
8. Improved User Experience (UX)
Consumer-grade interfaces have heightened user expectations that distributors must meet to drive ERP software adoption and productivity. Just as consumer apps provide intuitive interactions, your company must deliver streamlined ERP interfaces with graphical workflows, smart search capabilities, role-based personalization and ease-of-use features to minimize the training required.
Personalized homepages and dashboards display relevant apps, workflows and reports tailored to individual users’ roles. Conversational interfaces allow users to simply chat or speak requests to quickly find data, rather than hunting through complex menu structures. Intuitive navigation schemas that leverage touchscreen conventions streamline workflows and reduce errors.
Responsive design ensures seamless usage across desktop and mobile screens. Digital assistants and chatbots can be integrated to guide users, answer common questions and provide individual recommendations. By emphasizing user-centric design principles, your company can maximize ERP system utility and adoption across generations of employees with varying technical proficiencies. This drives higher workforce productivity, while improving both employee satisfaction and customer responsiveness.
9. Mobile ERP Applications
The bring-your-own-device (BYOD) revolution is another compelling shift in ERP solutions. Mobile ERP software applications allow users to access ERP functionality on mobile devices such as tablets, laptops and wearables and are becoming a critical component of business technology capabilities in 2024. With eMarketer forecasting mobile devices to represent over 75% of total media usage by 2024, integrating mobile access is imperative to enable productivity and real-time decision making wherever employees are located.
Mobile ERP apps empower your company’s field teams, drivers, technicians and off-site employees to seamlessly view dashboards, enter data, retrieve information and perform workflows remotely from home offices, client locations or on-the-go. This ensures continuity of operations and quick customer issue resolution. Mobile access also enables you to reduce downtimes and delays by allowing technicians to immediately lookup product manuals, review diagrams, confirm warranties and access other required information on their mobile devices at customer sites.
Wearables such as smart glasses further enhance productivity for warehouse employees, allowing hands-free scanning, voice-controlled navigation and inventory lookups to speed order fulfillment. Real-time push notifications on mobile apps also apprise employees of urgent emails, KPI threshold violations, abnormal transactions and other time-sensitive alerts to drive rapid response.
With a distributed remote workforce becoming more prevalent, having ERP systems with robust mobile capabilities is pivotal for distributors in 2024 to empower continuous operations and deepen customer connections.
10. Continuous Learning and Digital Transformation
Your distribution business must nurture a culture of perpetual skills enhancement and process refinement. Regular training programs, digital ERP portals with on-demand tutorials, idea management platforms that crowdsource innovations and interactive workshops help employees continually expand ERP competencies and identify opportunities to leverage new features for business gains.
Developing power user groups and communities of excellence fosters collaboration around maximizing ERP’s capabilities. With continuous learning, your company can derive full value from ERP investments by keeping employee skill sets aligned to emerging solution possibilities and evolving needs. Embracing digital transformation will enable you to optimize your business processes, gain competitive advantages and drive growth in 2024 and for years to come.
Conclusion
Distributors must take initiative to comprehend and embrace the major Enterprise Resource Planning (ERP) technology trends in 2024. These top trends that your company should pay attention to are cloud-based ERP software, AI and ML integration, IoT and ERP software integration, mobile ERP apps, blockchain technology, distinctiveness, supply chain efficiency, sustainability practices, improved UX and continuous learning. Your business can improve decision-making, increase operational efficiency and obtain a competitive edge in the changing distribution market by adopting these trends. In 2024 and beyond, you can stay ahead of the curve by making the proper ERP investments to spur growth.
As your trusted ERP advisor, Ultra Consultants guides you through digital transformation with expertise and experience, from selection to implementation and value realization. We understand your unique challenges, and we can provide your business with strategic guidance to drive success in the flooded ERP market. We are your one-stop partner for implementing future-proof ERP to enhance efficiency, leverage data analytics and sustain a competitive edge.
With complexity ahead, Ultra Consultants unlocks your potential. Invest in your future by partnering with us today. Together we can flourish in 2024 and beyond through operational excellence and tech-forward strategies tailored to your needs. The future starts now. Contact us today to get started with your technology selection and implementation project.
