Why do some digital transformation initiatives in the wholesale distribution sector produce results that far surpass expectations while others fall short? It’s a question I’ve been contemplating a lot recently both in my work supporting wholesale distributors in executing their digital strategies, and in my other gig as a college lecturer who teaches a Master’s-level “Digital Distributor” course.

The answer, I believe, comes down to two things: having a clear intention in executing a transformation strategy; and, as part of that strategy, giving IT teams the role of digital change agent within the organization.

Let’s tackle the intentionality part first by defining why organizations pursue digitalization in the first place. Digital transformation, in essence, is the continuous effort to capture quantitative and qualitative business-related elements as data points, which then can be utilized with technology to augment or substitute human agents, with the goal of optimizing, extending and transforming how a company conducts its business in order to create a competitive advantage.

What might that look like in practice? For a distributor, it could mean moving along the continuum from descriptive analytics to diagnostic analytics to predictive analytics and prescriptive analytics. Applied to customer incentive programs, for example, the analytics ultimately could help a company understand why traditional programs are losing impact, then, using intelligent technologies, prescribe a pathway for developing new programs that drive a higher margin or larger sales volumes. It could also mean using a digital twin of the organization, or a specific operational area, to develop better B2B eCommerce processes, or to redesign solutions so they appeal more to customers. Or it could mean leveraging the Industrial Internet of Things (IIoT) to develop new business models that, for example, monetize the data collected through the lifecycle of a product by providing a manufacturer with data-driven insights on how to improve the product’s performance in a future version.

What we’re really talking about here is a fundamental, technology- and data-driven shift in how a distribution organization operates and serves its customers. To successfully orchestrate a transformation of this magnitude, an organization needs a change agent. Who better than IT to fill that role, given its position at the confluence of people, processes and digital technology?

Digitalization and the move to the cloud are forcing IT out of its classic role managing hardware, software releases, large-scale tech infrastructure projects and code development. The logical evolution of that role is to support end-to-end digitization as an end-to-end change agent within the organization.  What might that new role entail? The job description as I see it focuses on two key areas: lifecycle management and operational management. Let’s dig a little deeper into the skillsets and responsibilities involved in each of those areas.

On one hand, IT should be given the reins to manage:

• Process lifecycle. Process excellence is recognized as one of the cornerstones of successful digital transformation. IT teams should be highly engaged in bringing process transparency to the entire organization, employing technologies like digital twin to drive simplification, minimize process deviations, measure and control improvement initiatives, fix inefficient processes, remedy bottlenecks, and drive automation and process compliance.
• Data lifecycle. Data excellence is another pillar of successful digital transformation, and another area where IT can play the role of change agent by bringing to bear the technologies to enable a distribution organization to collect, integrate, harmonize, standardize and understand both quantitative and qualitative data — from internal as well as external sources.
• Solution lifecycle. Nowadays, business capabilities are being compartmentalized and new capabilities are consumed in a modular fashion. In its role as change agent, IT’s responsibilities thus must shift from managing monolithic on-premise software solutions to architecting a modular digital infrastructure in which all the pieces are tightly integrated by default, regardless of where they are running.

In addition to managing lifecycles, IT, in its role as change agent, will need to focus on operational management in three key areas:

• Innovation. Here’s where IT must take the lead in bringing to bear technology and systems that enable the organization to innovate on an ongoing basis. The customer experience is one area where supporting innovation with technology is critical. IT can be instrumental in creating touchless digital experiences; for example, recognizing that since the onset of the pandemic, some distributors reportedly have seen more than a 700-basis point shift toward e-commerce, e-procurement and other digital channels. And let’s not overlook how important data and digital modeling tools are in helping distributors develop, launch and sustain more of the outcome-based services that customers want.
• Value. As tight as margins are these days for distributors, helping organizations tap new sources of value must be another key facet of IT’s role as change agent. In that role, IT can help uncover new ways to reduce risk, increase efficiency, drive sales and improve decision-making. IT could, for example, drive improvements in cost recovery by identifying margin destroyers, inefficient sales rebates, etc., while highlighting the most favorable promotional buying opportunities and order channels on the procurement side.
• Change. Digital transformation puts a whole new set of tools at employees’ disposal. Responsibility for improving adoption, overcoming resistance and shrinking time to value logically must reside with an organization’s IT teams. In short, IT will be critical to shaping the business user’s experience, from the C-suite all the way to the warehouse.

The same holds true for many of the responsibilities that accompany digitalization within a wholesale distribution organization. For a digital transformation effort to succeed, organizational decision-makers must continually be asking themselves, “If not IT, then who?” Then they must give their IT teams the breathing room they need to evolve into their new role as change agent.