How to choose analytics software for industrial distributors: questions, data and traps

Most buying decisions for analytics start from a feature list. For industrial distributors the better start is the questions that come back every month, the files already on hand, and the traps that make a tool look right in a demonstration and wrong in the first board meeting.

Start from the questions

Any tool you consider should answer these from your data, not from a sample. Ask to see it.

The data you already hold

• Ledger with category
• Account master
• Quote log
• Order file
• Order and shipment files
• Counter sales file
• CRM
• Assignment file

If a vendor needs a warehouse built before it can read these, count that in the cost and the time.

Ten questions to ask any vendor

1. What does it need in place before the first answer? A warehouse, a data model, a modelling language, a partner? Ask for the list and the typical weeks.
2. Who does the setup, and who maintains it? Your team, the vendor, or a partner, and what that costs after year one.
3. Does the AI calculate figures, or choose from computed ones? A language model that writes queries or code can produce a plausible wrong number. Ask what it is allowed to do.
4. Does every total reconcile to a control figure? Ask to see a bridge that does not sum and what the product does about it.
5. Can every figure be opened to its rows? An answer nobody can check becomes a debate in the meeting.
6. What does it cost in the first year, all in? Licences, consumption, implementation, modelling and training, not only the seat price.
7. How does data arrive, and who holds credentials? A file your systems already export, a scheduled drop, or a live connection with the vendor holding keys.
8. What happens to the data, and where is it stored? Residency, retention, deletion, and whether names can be replaced with identifiers.
9. Can we see it on our own data before we sign? A demonstration on a sample dataset tells you little about your own.
10. What does the tool do when it cannot answer? It should say so. A confident guess does more harm than no answer.

Checks specific to industrial distributors

Ask whether the tool enforces these, and what it does when they fail:

• Quote conversion: Quotes = converted exact + converted probable + lost + open within validity
• Lost lines: Lines ordered = shipped complete + shipped short + cancelled no stock + cancelled other + open
• Category penetration: Category revenue sums to the ledger; every account in one segment
• Dormancy: Customers = dormant + active + too few orders

The traps

Lost lines. No invoice means no record in the sales system. The order file has them. A branch losing 4 percent of ordered value to stock-outs is giving away more than most sales initiatives will ever add.

Quote conversion by value. Forty percent by count and 25 by value means the large quotes are being lost, and nobody has looked at which.

Counter sales without an account. The same van pays by card twice a week for a year. That is a customer nobody has opened an account for or visited.

Measures to leave out

Quotes issued. Volume of quoting is cost, not achievement. Conversion by value, and estimating hours per converted dollar, replace it.

Lines per order, alone. Interesting to operations; no sales decision follows from it.

Revenue per branch against last month. Mostly the calendar. Use the same period last year, or seasonally adjusted figures.

A scorecard

Where Covirage fits

Covirage reads the exports above, answers the questions with figures our tools compute and check, and is set up for you within a week. See analytics software for industrial distributors compared, AI analytics for industrial distributors and Covirage for Industrial distributors.

For the measures in full, with formulas and exports, read Sales KPIs for industrial distributors.