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Tech Spending by Distributors to Exceed $80B by 2008, Says Consultant;EFR Chief Cautions that Acqui

PHILADELPHIA - New research from Pembroke Consulting indicates technology investments by wholesalers and distributors will boom through 2008. The report, titled "Facing the Forces of Change: The Road to Opportunity," included survey responses from more than 1,000 wholesale distribution executives.

Spending on computer hardware and software by wholesalers and distributors is forecast to exceed $80 billion in 2008, according to the study. Over the next four years, wholesale distribution executives plan to expand purchases most quickly in these areas:
* Online Ordering
* Customer Relationship Management (CRM)
* Salesforce Automation
* Warehouse Management Systems (WMS)

"Last year, wholesalers and distributors spent approximately $53 billion on computer hardware and software, equal to one out of every $5 spent by U.S. businesses," said Pembroke Consulting President Adam J. Fein, Ph.D. "In the coming years, distribution executives will invest in technologies that improve productivity, enhance existing service offerings, and meet new demands for customer self-service in B2B supply chains."

Mark Allen, executive director, Efficient Foodservice Response, Falls Church, VA, is not surprised by the expected increase in technology expenditures by distributorships. However, Allen adds, "As companies make decisions as to how to serve their customers in the most efficient and effective manner possible, technology will be introduced that will facilitate customer-facing processes. This is evidenced in the Pembroke research that documents expenditures in online ordering, customer relationship management, and sales force automation as areas where purchases will expand most rapidly."

Allen explained to ID Access that distributorships would have to properly access their needs and how they will do business in the future and then make technology purchases accordingly.

"Foodservice distributors spent a lot of money in the past that didn't produce an acceptable return on investment. Companies are more cognizant of this fact and in the future will allocate dollars on technologies with a proven track record and quantifiable return," Allen noted.

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