Making distribution digital
There's a lot spoken about digital transformation. The overuse of this tech industry buzz term, the differing stages of digital maturity and unique circumstances every company finds itself in, means that while analysts such as Gartner may be able to give us a definition, in reality, it's open to wide interpretation.
For some companies, digital transformation is simply adding a website, for others, it means completely re-engineering the business and creating new revenue streams.
Andrew Moodley is chief digital officer at Axiz and has spearheaded the launch of a platform that he hopes will not just digitally transform Axiz, but will be the foundation used across parts of the distribution company’s parent group Alviva. He even has plans that the Axiz Digital platform will be used by customers and competitors alike, here and abroad.
The story begins a couple of years ago when Axiz was looking at how to build a platform to support its Microsoft CSP offering. “I was working in the Axiz advanced technologies unit, which housed our software business – IBM, Red Hat, Oracle, VMware and so on. We could see Microsoft’s approach might become more widely spread across the software space,” he says.
After listening to vendors about their plans and international players about the Microsoft CSP platforms on offer, Moodley failed to find a platform that suited Axiz’s requirements.
“There are probably 200 to 300 players that can give you a Microsoft CSP provisioning platform. But we carry about 30 software technologies, so how do we do this for all of them? Or do we, at the southern tip of Africa, sit and wait in line for a global software provisioning company to make other technologies available on a platform?” The answer Axiz settled on was to build something itself.
“We used local dev teams, but we were the architects for the platform, which means Alviva owns 100% of the IP,” he says.
A consideration had to be made around the inclusion of other vendors that weren’t ready to enable the full digital experience. “We also had to look at what to do with our analogue technologies – the traditional hardware business. Cisco and Dell are big vendors, and we sell physical stock from them. Cisco is also a vendor in transition to becoming a software company; how do we deal with vendors in transition?”
What is the job of the reseller?
“While e-commerce-type functionality is one of the aspects of the platform, we decided not to focus solely on that. We wanted to be a marketplace platform, and also a technology platform, a digital platform where we can inject services and do our own IP,” he says.
Moodley explains that the platform was built using microservices architecture, so that it’s scalable and agile.
“Our theory was to build as if we had many portals and aggregate them into a sophisticated routing engine that we call Ava, which collaborates between all the different upstream and downstream tech platforms – vendors, customers, our own ERP and third-party providers (such as couriers).”
Ava is built on microservices and is really the brains and glue of the operation, pulling information from the various subsystems to then be presented in the front-end.
The platform also uses APIs from those vendors that currently offer them. For vendors that don’t yet have suitable APIs, the system is integrated with Axiz’s ERP to enable the platform to offer whatever products reside in the ERP.
Moodley says the well-trodden approach to distribution still focuses on the product supply chain. But digital transformation provides an opportunity to rethink and refocus.
“Traditional distribution had difficulty looking at the jobs resellers had to do, other than through the lens of product supply. So, we asked: ‘What is the job of the reseller? And how do we create capability, or use the capability we have within the organisation to enable the job the customer needs doing to be done better?’”
One aspect, says Moodley, is pricelists, which are still a big part of the distribution offering to market.
“Because we have digital integration into the ERP, we’ve made the pricing live. Now instead of a reseller customer downloading a static pricelist, the customer can do real-time pricing.”
Once logged into the platform, customers are given specific access to vendors and products based on their certification and partnership status. But there’s also the capability for customers to access a marketplace, which lists all of the products Axiz distributes, go-to-market pricing and stock levels. “Reseller customers can also get a management screen and a buy screen, so they can push the buy screen downstream to their customers,” he says.
Customisation can also be added. “One customer has over 550 permutations of services to be injected into a quote. They currently have two Cisco-certified internetwork experts that do this. Our digital services engine absorbs the complexity of the pricing model.”
Time to change
Going digital doesn’t just happen at the flick of a switch. While the technology can be mastered, it requires a period of transition and change management.
“'Build it and they will come’ doesn’t exist in digital. What we found is that if we moved too fast with digital, we lost the attention of our own people and customers.
“When we started on the journey, we said we would have a digital business and an analogue one. But we couldn’t do the transition, so we started to modernise the analogue business, to get better adoption, such as modernising the pricelist; it was our mechanism to get people adopting so they could transact with us other than via fax, email or telephone call.”
He explains that for many resellers, sat with a client out in the field, there’s the traditional method of calling into Axiz and speaking to their nominated sales agent or downloading a pricelist. But things are starting to evolve.
“We found that customers were coming to the platform for a price-list, but now the first stage is a digital catalogue in the marketplace where resellers can query the price and check stock digitally. The next evolution will be a transactional digital catalogue where customers can see the product, request a quote or reserve it digitally, and customers can still call their agent to finalise if they choose. The full marketplace will be when customers fulfil the entire transaction on the digital platform.”
The platform is also finding new customers for non-traditional distribution services. A systems integrator has strict SLAs with an end-customer and was looking for the ability to do compliance management and order tracking, SLA compliance, reporting on rebates and duties. “If the systems integrator failed, it incurred penalties. It didn’t want to talk to us to buy stock, but wanted an audit trail of all transactions that it could dispense to the customer, which means that the end-customer can only hold the systems integrator to the SLAs if it used our platform.
“We’re now in discussions with the systems integrator, which is international, to take this platform to all the territories where it provides services to that end-customer. The systems integrator will use our platform to provide services to its customer, but not procuring the product from us in all the territories, such as South America and Asia, where we don’t have a presence. The idea is that we’d be able to provide software, so we’re moving to selling IP-as-a-Service.
“Our traditional revenues are selling licences and subscriptions. What the digital platform is looking to do is help us change our business model so that we can aggregate the IP that sits disparately in our organisation to be able to provide value to a customer. This is about creating new revenue streams using the inherent capability of our organisation, and how to start reducing friction for our customers in the world of work.”