Investing in human capital is critical to using IT as a tool to meet your strategic goals, according to the author of Facing the Forces of Change: Decisive Actions for an Uncertain Economy, Guy Blissett.

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Blissett, leader of IBM's distribution research and a fellow of the NAW Institute for Distribution Excellence, told me recently in an interview on the book that without the right skill set, it is difficult to use technology effectively. Technology is an enabler to help distributors use data at a higher level to make better business decisions.

In fact, in the book, Blissett separated his discussion of analytics from technology. He explained: "We wanted to highlight that doing the analysis is one thing – but being able to use that analysis in your business requires some new skills and capabilities on the personnel side and new organizational considerations."

In other words, when looking to optimize inventory management or grow smarter about pricing, employees that deal in these areas must understand the variables they are picking and the limits that are set, and why you might want to change those and what the implications would be to doing that. "It's not just about installing software and hitting run – and your prices are optimized," he said.

The CEO of industrial rubber products distributor Lewis-Goetz and Company, Pittsburgh, PA, No. 26 on MDM's list of the top 40 industrial distributors, has made it a priority to educate employees on using analytics properly. In a recent interview, part 1 of which was published in the Feb. 25, 2011, issue of MDM Premium, Jeffrey Crane said success in using a new technology tool is dependent on Lewis-Goetz's work force understanding how and how not to use it.

For example, the distributor did an in-depth study on pricing in 2008, educated the work force on better pricing practices and from there implemented improved pricing tools. "We continue to use the same tools today, and we face the same margin pressure but with the knowledge and training our people had we're still making good pricing decisions," Crane said.

Part 2 of MDM's interview with Crane, which goes into detail on Lewis-Goetz's use of technology to support strategy, will be published March 10, 2011.