I began my career as a professional investor studying hundreds of businesses in many different industries. My biggest takeaway from this experience was that all great companies had at least one thing in common: They were aggressive adopters of technology. Their counterparts — the companies that ignored technology — suffered the consequences regardless of their leadership position.
This explains why Netflix is worth $300 billion and Blockbuster is bankrupt, and it’s why technology companies represent 8 of the 10 largest companies in the U.S. In our industry, it explains why Clark Associates and KaTom have grown sales at more than 25% per year since 2013, versus most other foodservice equipment and supplies dealers at just 2.5%. Technology is an opportunity for those that embrace it — and a potentially fatal risk for those who don’t.
When members of the foodservice equipment and supplies industry discuss technology problems, they focus on the need for better analytics, automation tools and e-commerce capabilities. I would argue these aren’t root problems but are instead symptoms of the true disease — the technology infrastructure that powers much of this ecosystem. Whether a factory or a dealer, a company’s data is typically unstructured and resides in many different applications, none of which effectively connect their teams and external parties. Quotes and product data reside in one program; transactions are in old and clunky ERP (enterprise resource planning) systems; files and important communication are in impossible-to-find emails; analytics are in static spreadsheets; purchase orders are in emails or faxes; and different teams are on disconnected systems.
This leads to redundant data entry and less business visibility, making it harder for companies to manage their teams and increasing the likelihood of mistakes. Without connected data and teams, these analytics and workflows require significant manual work (more emails, forms, spreadsheets and meetings) when they could be automated with custom software. This leads to higher operational costs, less sales productivity and unhappy teams.
It also impacts e-commerce. Creating a website with products, a shopping cart and integrated payments is easy, but if your data and teams are disconnected and you have limited analytics and automation powering these operations, then you aren’t optimizing for the customer or your bottom line.
While these problems create large costs and risks, they also create opportunities. Developing solutions requires either working with technology consulting firms, expanding your internal technology teams or partnering with technology start-ups. It doesn’t matter how these problems are solved, but it matters when. The companies that solve them sooner will take market share from the ones that solve them later.