With an overwhelming number of technology choices, is there a “dream stack” for distributors looking to boost profit margins and improve efficiency?
This question took center stage in a recent webinar hosted by Distribution Strategy Group’s Jonathan Bein.
The panelists included:
- Daniel Edwards, Net at Work, Practice Director
- Jeff Botsch, Infor, North American Industry Field Executive for Distribution and Equipment
- Justin Kao, Spiro.ai, COO
- Niall Diamond, ECI, VP of Product Management
The discussion explored how distributors navigate technology selection, infrastructure must-haves, and the evolving role of AI and automation.
All-in-One vs. Best-in-Breed: Finding the Right Approach
When investing in technology, businesses must decide whether to adopt an all-in-one platform or assemble a best-in-breed stack. While an all-in-one approach offers simplicity and lower management overhead, best-in-breed solutions often provide deeper functionality in key areas.
Kao explained that smaller companies typically prefer all-in-one solutions to minimize pain points, management challenges and overhead. However, as businesses grow, their needs evolve, and they often transition toward specialized solutions. “We see them start to split out and find best-in-breed solutions,” he said. At the same time, he noted, “I see huge distributors decide not to invest in technology. They’ll invest in more salespeople or better facilities instead.”
Diamond said that smaller organizations often struggle to manage the complexity of best-in-breed approaches due to limited resources. “When you’re a small organization you can’t manage the complexity of a best-in-breed approach. You may not have the level of investment,” he said. The tradeoff is functionality; choosing an all-in-one system means sacrificing some advanced features to gain efficiency.
Edwards described how many distributors initially embrace consolidation, bringing everything under one umbrella. While this approach offers efficiency, it can lead to limitations. “A lot of all-in-one solutions are 10 miles wide but only five miles deep,” he said, meaning they cover many functions at a basic level but lack depth in key areas. As distributors expand, they increasingly turn to best-in-breed solutions for critical functions like CRM.
Botsch emphasized that a company’s ability to manage a tech stack depends on its people. Even with advanced tools, distributors must have the internal staff to effectively use these technologies. “Ultimately, it comes down to whether I have the people capabilities to handle that. The company is advancing, and they’re looking to grow. But they must have the functional staff to leverage these tools to their full extent.”
Building a Strong IT Infrastructure
Beyond software, distributors must consider the foundation of their IT infrastructure. Cloud-based solutions have become the preferred choice, as SaaS platforms offer a level playing field by eliminating the need for self-supporting on-premises hardware.
“It’s an equalizer for anyone that wants to avoid technology that they have to self-support. If you’re really looking at AI and advanced functionality, you can quickly outgrow your stack,” Botsch said.
Edwards reinforced this, stressing that distributors who delay cloud adoption risk falling behind. “Competitors are eating their lunch if they’re not moving to the cloud. In some cases, it’s a forced movement, but it is a necessary evolution.”
Diamond underscored the importance of scrutinizing cloud providers. “Don’t shy away from asking about scaling, capabilities, how quickly they can deploy code into their infrastructure, where it’s hosted, their data protection policies and more.”
Cybersecurity concerns are driving more distributors to rethink their technology choices, Edwards said. He shared that in recent months, several companies running legacy systems had been hit by ransomware attacks, forcing them to prioritize security in their tech stack decisions. “Suddenly, cybersecurity is at the top of their minds, and they realize they need something more.”
Key Features That Differentiate Tech Platforms
Selecting the right technology stack requires understanding which features matter most. Whether it’s ERP, CRM or ecommerce platforms, integration and AI capabilities are critical differentiators.
Diamond noted that for distributors exploring ecommerce solutions, integration with ERP and CRM systems is often the deciding factor. AI is also becoming an essential part of modern tech stacks. He referred to AI as “table stakes” today, as businesses increasingly incorporate it into their operations. “We’re figuring it out, learning it and increasingly fitting AI into our tech stacks.”
Kao outlined three critical layers of a modern CRM: “Database, automation and intelligence. Marketing, sales and customer service features stem from these three layers.” He recommended that distributors evaluate CRMs by asking key questions:
- Does it have a strong database with easy-to-manage structural controls?
- Does it have automation that makes your life easier when using it day to day?
- How does AI or some kind of intelligence layer provide analytics, or help you make your life easier and faster?
Many distributors, he observed, are hesitant to adopt CRMs because they view them as additional data-entry tools. However, modern CRMs proactively gather and analyze information from multiple systems, reducing the manual workload. “It’s a mind shift for distributors,” he said, explaining that as technology improves, CRMs will shift from passive data repositories to active intelligence tools that drive performance.
Lessons from Successful Tech Stack Integrations
Edwards emphasized that many tech initiatives fail due to a skills gap among users. “There’s a paradigm shift moving from a place of constant system maintenance to giving information to a proactive software giving you the information.”
Kao warned that the sheer volume of AI-driven tools can be overwhelming, making it essential to remain focused on use cases that provide real value. Edwards echoed this sentiment, explaining that distributors must assess whether a technology tool fits into their model and aligns with their priorities.
The most successful implementations prioritize internal process improvements. “What capabilities are there for my industry so that I’m not starting from scratch and gain that value right away?” Botsch said.
To implement a technology dream stack successfully, distributors must align their investments with business goals, address skills gaps and adopt a strategic approach to integration.
Kao summed it up: “The right technology advisor— whether in-house or third-party – can make all the difference.”
Want more? Watch the webinar on demand.
