With his team, managing director Chuck Cohen has put his money where his mouth is by changing every foundational IT system at Benco Dental, a dental products distributor. The result of this transformation is a better online and offline customer and employee experience, as well as better efficiencies and effectiveness for Benco.
Cohen’s grandfather founded Benco Dental in 1930. It’s a privately owned, third-generation family business. Cohen’s distribution career started at the company, and today, he and his brother are co-managing directors and co-owners. From being the company’s first marketing director to a territory rep and beyond, Cohen helped Benco become the third-largest dental distributor in the U.S. Benco Dental sells everything you see in a dentist’s office, including exam chairs, gloves, filling materials, instruments and more.
Distribution Strategy Group (DSG): We’ve looked at literally billions of dollars of transaction data from companies, and everybody thinks they have bad data. What spurred you into such an aggressive digital transformation with a huge emphasis on analytics?
Cohen: Digital transformation is one of our greatest challenges and opportunities right now. First, let’s start with Jeff Bezos, clearly one of the century’s great entrepreneurs and business leaders. No matter what space you’re in, Amazon is a competitor. What I think is the most powerful insight of Jeff Bezos, which he doesn’t get any credit for, is this idea that every business is an IT/data business that happens to do something else, which is profound.
When you look at Bezos’ career, you see books were just a place to start for Amazon. He wanted to create an IT business that also sold something else. I think most distributors think of ourselves as distributors. At Benco Dental, we sell dental products, so we are a dental products distributor.
How we apply the idea that every business is an IT/data business that happens to do something else at Benco is to say we’re an IT/data business that happens to sell dental products. When you reorder the priorities in that way, it changes the way a business and business leaders think about their strategy. You think about, number one, do we have enough data people on our team? Number two, if that’s true, the most valuable resource we have is our data. The questions we then ask ourselves are:
- What are we doing with the data?
- How are we leveraging it?
- What are we learning from it?
- How do we apply things like artificial intelligence and other tools to that data to get the most value out of it?
Again, we happen to sell to dentists and happen to distribute dental products. At our core, we need to think of ourselves as an IT/data operation that does something else in an ancillary fashion.
DSG: That’s a massive goal. When you start to think about the transformation, what are the steps that you’re taking?
Cohen: It is an audacious goal, but if we’re going to compete with Amazon as an industry, we need to think like they think, we need to understand what they’re doing, and we need to compete with them head- on. Otherwise, we run the risk of falling behind.
We will never have as many data scientists as Amazon. But that doesn’t mean we can’t have a number relative to the size of our business. There’s an interim step between doing nothing and hiring an army of data scientists. We don’t need to do as well as Amazon. We do need to do certain things well to compete with them.
We realized we needed to do a wholesale change of our IT foundational infrastructure three or four years ago. Everything had gotten to the point where it needed to get replaced all at once. To us, the first step was to look at an ERP conversion. We looked at other systems attached to our ERP and tried to figure out what we needed to change and how to become more IT-driven. About the same time, we started thinking about our data and data resources.
Part of the insight came from my son, Benjamin, who founded and runs proton.ai. He took a whole different approach to leveraging data in his business. I’ve really enjoyed having the opportunity to reverse the parent-child role with him where he is teaching me new skills. He is very helpful in getting us to understand how best to leverage this power of data.
So, the answer to your question about what is happening in our digital transformation is:
A wholesale tear out and rebuild of the foundational IT infrastructure and different thinking about the data we have in the business already. Every day there are terabytes of transactional data that we generate that we should and could do more with.
DSG: You mentioned the amount of transaction data that you have. There are dozens of data fields on a distributor transaction on average. It’s not like retail where people come in and you don’t even know who they are. But distributors aren’t doing that much with that data. And Chuck, it sounds like you concluded there’s a lot more intelligence in that data that you could use.
Cohen: I’ll go one step farther to what you said. Not only do we have terabytes of data that we’re not leveraging to the point we should be, but we also have data that other people would kill to have. For example, every manufacturer probably pays for the data in our systems that we basically get for free as part of the transaction. I think this is true of every wholesale distributor. We have complete data pictures of purchasing profiles that every startup in America would die to have.
We’ve done some stuff with our data. But are we leveraging it to its maximum extent? The answer is no, we’re not. Most of the distributors I know of are not. Maybe Amazon does.
DSG: Do you think you could provide value to your suppliers with this data if you did the right things with it?
Cohen: Absolutely. 100% we could. We need data scientists working for us. Companies need the right people, with the right training, working with the right tools to really leverage that data because it’s so vast. Without the insights, tools and people to figure out what to do with it, you’re just banging your head against the wall.
DSG: How do you arrange the marriage of data? What are the things that you’ve gone through to allow data to get married?
Cohen: How we handle data is a journey. I’m not sitting here saying, “I have the perfect marriage, and we never have any problems.” I’m here to say we have a marriage with handling data that’s a little ugly sometimes.
The first thing we did was begin this transformation by upgrading all the foundational pieces. Among that is where we keep the data, to ensure we’ve got the right tools and systems. We followed this up with taking an inventory of all the people who use the data, and we tried to figure out how we can get them all on the same team, so they don’t duplicate effort.
When we started looking in every corner of the business, we realized we had a lot of people using data, oftentimes working on a similar or the same project, but from a different perspective. We also found different teams using different sets of data, using different skills.
One of the things we started figuring out in our organizations was how we can centralize all the people who oversee and manage the data into one place. This way we can efficiently leverage this group to the best extent possible and make sure they’re working with the right tools.
DSG: Does this mean data warehouse or data mart?
Cohen: Yes. Data warehousing would be part of it, but also a central data analytics team including people who understand how to manage data. Data jockeys were valuable players who were hard to come by. If you had this person on your team, you could ask a question and they would come back with an answer. If you were lucky enough in your function to have one or two of them, you protected them very closely.
Getting the team to start thinking about getting all those people to be part of a centralized team was difficult. At the same time, we used to have the same mindset about data warehouses.
DSG: As part of the centralizing, you’ve gone through an ERP reimplementation. Is it a cloud ERP?
Cohen: Yes, we’re doing the Infor system, and we are doing a cloud ERP. We are in the process of doing that ERP conversion now. In parallel, we are changing other systems, too. We’ve also decided to centralize all our data and analytics people into one department with a direct line to our head of IT and a dotted line to the specific function that they serve. Getting us to this point was not an easy set of conversations and it took us a couple years to get everyone to agree to this structure.
DSG: Did you and your team ever come together and just say, “What is all the data that we have and what could be the value that we could get out of it?” Would that be a useful exercise?
Cohen: It is a useful exercise. We’ve done it a little bit so far, and we’ve come up with a few insights along the way. One was the shopping cart data. Other ones were the lead time data and what gets back ordered. What we also decided was to get the full value out of the inventory, we first had to get someone knowledgeable to lead the effort.
We are now searching for a director of data and analytics reporting into the IT team, so we have a team of people who can help us figure all that out. We started by taking inventory of the data, the pools of data, the different spreadsheets, and everything that people have, places that data is housed, and the people we have working with that data.
DSG: And it yielded insights.
Cohen: Absolutely, we are finding insights just by saying, “We’re going to just go look everywhere for the data, and then we’re going to figure out how we can better use it, even for ways it’s not otherwise intended.”
DSG: In your case, you’re having the CIO lead that effort. And I would say in some organizations, they’re probably having the CFO lead that. Does that depend on the individuals you have in those jobs as to who the right choice is? Does what you’re doing with analytics require a CIO with different strengths than what have traditionally been seen to be required in that role?
Cohen: We happen to have a very talented team, and we have a very talented CIO, as well as a talented CFO. Our CIO embraced this as a project and really was interested in it. The added advantage of tasking these responsibilities to our CIO is knowing that this kind of data will not be weaponized. I’ve met aggressive CFOs at different places who like having control of the numbers. Control of dollars, in addition to the control of these numbers, can weaponize that level of information and use it in a way that does not promote love and teamwork in the organization. Instead, it results in finger-pointing, however subtle.
Watch the full interview with Cohen: