VIEWPOINT
DISRUPTION AND DIGITAL TRANSFORMATION IN CONSTRUCTION
Michiel Schipperus, CEO at Sana Commerce
THE GLOBAL PANDEMIC of Covid-19 and the subsequent financial recession continues to have an impact on businesses across all industries, leaving considerable economic uncertainty across the board. These unprecedented blows to business have highlighted the need to be agile and embrace digital and e-commerce in construction. With an unprecedented shift towards e-commerce, due to social distancing and self-isolation measures, there is a critical need for builders’ merchants to rethink their strategies to align with customer expectations in a digitally led future, in order to survive these uncertain times. Sana Commerce recently commissioned Sapio to research the digital transformation and adoption of e-commerce among B2B companies, with the construction sector in the UK, US, DACH, Benelux and ANZ regions as one of its primary sectors. We asked recipients to rank what they felt were the most important e-commerce characteristics for business. We found that this aspirational e-commerce wishlist aligns with the challenges these businesses are facing; they want a solution to their data problem so they can leverage e-commerce hassle-free and:
• Reduce manual data errors (95%)
• Lower system administration requirements (92%)
• Minimise order handling for inside sales (90%)
For example, in a builder’s merchants this would mean the triangular relationship between supplier, merchant and customer would be handled more effectively, ensuring products don’t go out of stock and large customer orders can be easily fulfilled. On top of this, administration of customer
accounts is all handled online and transfer of goods between branches can be tracked and recorded with the minimum amount of input from counter staff. All of these elements result in an operation that is much leaner and more focused on delivering what the customer wants rather than spending time trying to administer accounts. While most organisations in the construction industry are in early or middle stages of digital maturity, distributors have proven themselves to be slightly more advanced. This could be a result of the cross-industry shift toward direct-to-consumer sales and the subsequent threat that comes from this, pushing distributors to digitalize. However, it is important to note that even digitally advanced companies in the construction sector still have a way to go if they want to keep up with other sectors such as media and retail.
On top of the economic uncertainty that the industry is currently facing, poorly managed business data can cause barriers to successful digital transformation. In fact, according to construction industry professionals, two of the three biggest e-commerce project challenges are related to data management and maintenance. Getting the right and complete data in one system (94%), the need for IT environments and infrastructure to be upgraded (90%) and working with just one business system to achieve a single source of truth (88%) are the three challenges facing the industry when successfully adopting e-commerce. While the first two challenges are mirrored across each of the industries we surveyed, the third is unique to the construction industry. Challenges for companies selling building products,
December 2020
www.buildersmerchantsjournal.net
construction equipment, spare parts or other items of this nature, may include a complex mix of both product lifecycle and partner companies that they sell through, as well as selling across multiple regions and time zones while ensuring they comply with national laws. These factors can be complex to manage, particularly at a time when money and resources are limited. An increase in digital maturity in the sector, particularly through the implementation of e-commerce, will help take the weight off many construction businesses and put them in a good position for tackling the imminent economic recession. Streamlining operations to save time makes perfect sense when looking at the on-going growth of the construction sector. A B2B web store can provide the level of automation necessary to achieve these goals, but only if it fits in well with the rest of the company’s IT landscape. Something that is particularly important to streamlining is the effective integration between the ERP and the webstore. An effective e-commerce platform that works together with an ERP system and provides an environment for information and transaction by region is ideal for companies with complex mix of products. Information generated through an e-commerce platform, integrated with an ERP system, ensures that information such as stocking levels is always up to date and on-site access to this information by the salesforce will be accessible from a range of devices and locations at any time of the day or night. Construction companies need to master the challenge of setting up a single source of truth, ensuring everyone in the organisation uses the same
data to base their decisions on. This requires having all key business data available in a single system, such as SAP or Microsoft Dynamics ERP. This makes it easier to keep accurate products, pricing, and client data in real-time across all sales channels.
Companies that do not operate from the same data are in danger of creating a project that will not be fit for purpose but will ultimately prove very costly for the business at a time when businesses are looking to save money. Failed digital transformation projects can be extremely costly to a business’s bottom line, making It crucial not to overlook the importance of a good technology partner to enable a smooth and effective digital transformation. Construction professionals must approach e-commerce projects in a smart way, with both the online customer experience and choice of partner top of mind. While the construction sector may lack digital maturity, there is an opportunity to embrace a mature, digital approach to transform business, even after launching and optimising a webstore. We have seen the capabilities of this through the success of Building Information Modelling (BIM) that wasn’t seen as essential back in 2011 but is now core to most organisations’ digitalisation plans.
ERP based webstores offer the benefits of centralised data and streamlined processes within the construction sector. Now is the time for the sector to invest in the future-proofed webstores that support them in reaching their goals. Automation and digitalisation can help save significant time and resources – something that is crucial right now for businesses to keep their head above water. BMJ
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