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Source: The Wholesaler, Jan 1, 2003

The world is changing.

It doesn't seem that long ago that distributors used cards and carbon paper to run their businesses. Then came computer systems that users accessed from dumb terminals (also know as green screens). Gradually, personal computers (PCs) with graphical user interface (GUI) began to replace the green screens - first in the executives' offices, then in accounting, and eventually throughout the entire organization.

Today about 70 percent of the solutions used by distributors utilize GUI - either a PC or a thin client - and only 30 percent use green screens. Yet about 80 percent of the business software that distributors use, utilize a character-based environment with emulation software to make it appear as GUI.

The distributors that run a GUI environment are at distinct advantage.

Windows to the World

Recently, our entire family got together. Being late on a Sunday afternoon, a few of my nieces and nephews had homework to do. What boggled my mind was that they were all using laptops.

Not having any kids, I was dumfounded. No longer did kids use pencil pens and paper - just a keyboard and a mouse. I was curious as to what the kids that cannot afford this technology do. My sister, who is very active in the local board of education, explained to me that there are a lot of grants available for low and middle-income families to keep everybody on the same playing field. She also explained that Bill Gates and his wife have been donating billions of dollars to rural and urban school districts to fund technology purchases.

When my nieces and nephews, and their peers go to work in the distribution industry they will likely expect their computers to have a Windows interface. Think about what the learning curve for a new employee would be like if they already knew the basic features and navigation of you software solution.

What I observed with my family validates what I have been observing lately in the distribution industry.

A Brief History of PCs in Distribution

We need to understand why distributors brought PCs into their businesses in the first place and how it relates to the evolution of software for the distribution industry.

Originally, distributors used PCs for non-core business functions such as creating spreadsheets for financial analysis and word processing for letters. At the time, PCs cost anywhere from $1,500 to $2,500; while dumb terminals were in the $500 to $600 range. As PCs came down in price and their popularity grew, their use in businesses expanded.

Then came digital catalogs and the Internet. This caused the highest proliferation of PCs in the distribution business. At first distributors would put a PC in a central location in their inside sales group. Whenever anyone needed to look up a part or get a spec sheet, they had to go over to the PC to find what they were looking for and either print it or write the information down. Eventually, more and more suppliers expected distributors to go online to get product information.

As the price of PCs dropped further, more distributors chose to replace their dumb terminals with PCs or WIN Terms (a graphic terminal). This was due in large part to the value PCs provided with respect to further automating their offices. But the software distributors used to run the core functions of their businesses remained character-based and required a terminal emulator to run on a PC.

Now that distributors have seen how giving their employees PCs has increased their productivity, they are starting demand that their business systems have the same interface. The expectations are that if their business systems had these interfaces, they would experience the same type of productivity gains.

More than Screen Deep

Unfortunately, it is not possible for a distributor to simply put a graphical front end on a character-based software solution and expect to succeed. Software is more than just what you see on the screen. To gain the same functionality of many of the Windows programs you rely on to help run your business, you need a solution that's built from the ground up to take advantage of the backend database, such as SQL, and the Windows operating system.

The technical term for this is integration, i.e., functioning as a unified whole. You can't sell to customers without knowing the status of the stock in your warehouse and you can't order new inventory unless you know what your general ledger says. You must be able to integrate your business processes into everything you do in order to survive. In distribution this is even more important because you serve as the middleman, so for customers to get the service they expect, you must be able to provide them the service even if it is depends on your supplier, such as delivery of product or getting a specification document.

This need for tight integration is the reason why you can't just put a Windows interface on your character-based system. It's nice to have a pretty front-end, but it's the backend functionality of the solution that provides the power you need to run your business successfully.

The Power Under the Hood

Think of a car. You could have a garage-kept, mint-condition car - no dings in the paint, spotless interior, shining chrome. But if the engine lacks power, that car won't take you where you need to go.

With respect to technology, the power under the hood is the operating system and the database - two key components to technology. One of the reasons why Microsoft Windows-based software - Word, Excel, PowerPoint, etc. - is so popular is because the data is easy to share information between applications. You can take an Excel spreadsheet and turn it into a Word table. You can even send a Word document from one computer system to another and still read the file. While the interface has made these tools very easy to use, it's the backend operating system that allows them to share information. A Windows-based solution enables you to integrate your business processes so you can better service your customers at a lower cost, thereby increasing your bottom line.

A SQL Server database provides the performance, scalability, and reliability that is the key to this integration. From a data management and analysis perspective, it is critical to turn raw data into business intelligence and take full advantage of opportunities. SQL Server provides agility for data management and analysis, allowing distributors to adapt quickly and gracefully to derive competitive advantage in a fast-changing environment. In addition to being the record-holder of important benchmark awards for scalability and speed, SQL Server is fully Web-enabled, providing core support for Extensible Markup Language (XML) and the ability to query across the Internet and beyond the firewall.

The SQL Server database and the Microsoft Windows backend operating system, are rapidly becoming the distribution industry standard. Not only because it provides the most scalable, reliable, and easy to use infrastructure on the market today, but because of the low cost of ownership.

Would you put a Yugo engine in a Porsche and race at Indy? Of course not, so why would you buy a software solution with a GUI interface, but no SQL Server database and compete in this market for your customer's business? In order to be successful, you must maximize your use of the data in your solution and that requires the functionality of a Microsoft SQL Server database.

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