Why ‘One More Tool’ Won’t Fix Distribution?

by Mehak Jaggi

Dec 18, 2025 | 04 min read

At the RI Tour: Chennai Edition, leaders across CPG and allied industries came together to discuss a question that is becoming increasingly urgent: what will brands need to get right over the next 30 years to sustain growth?

The discussion was refreshingly honest. It wasn’t about adding more salespeople, launching more schemes, or tightening follow-ups. Instead, it centered on a hard truth: many leaders are already confronting people-led distribution models that are reaching their limits.

Across the room, there was agreement on three realities:

SFA and DMS are no longer transformation initiatives; they are hygiene.
Distributors, many of whom have partnered with brands for decades, are not the problem to be solved, but the ecosystem to be strengthened.
The biggest bottleneck to growth today is not execution intent, but a lack of real-time visibility and system-led decision-making.

That naturally led the conversation to a familiar yet unresolved topic: why does DMS adoption remain so difficult, even when everyone agrees on its importance?

The Cost of Poor DMS Adoption: An Industry Reality

Before discussing solutions, it’s worth acknowledging the scale of the problem.

Across traditional trade and emerging markets, industry estimates show that:

Over 70% of distributors still operate with fragmented or semi-manual systems
Brands lose 5 – 8% of potential revenue annually due to stock-outs, delayed replenishment, and secondary sales blind spots
20 – 30% of trade spend leakage occurs due to delayed or inaccurate claims processing
Sales and finance teams spend significant time reconciling data across multiple systems instead of acting on insights

These are not technology gaps. There are adoption gaps.

Most brands already have systems in place ERPs, CRMs, billing tools, and DMS platforms. The real challenge lies in the fact that these systems often don’t speak to each other, forcing teams to rely on manual reconciliation, delayed reporting, and individual judgment. The result is slower decisions, strained distributor relationships, and capital locked unnecessarily in the system.

Why Adoption Breaks Down

One of the takeaways from Chennai was this: DMS adoption fails when it is treated as a mandate instead of an enabler.

Distributors operate under constant pressure, tight margins, working capital constraints, and high operational complexity. When DMS is introduced as “one more system to use,” adoption becomes superficial. Data quality suffers, usage drops over time, and brands fall back to manual interventions.

What leaders agreed on was simple: adoption improves only when DMS directly solves the distributor’s day-to-day problems, not just the brand’s reporting needs. To understand what this looks like in practice, the discussion turned to a real-world case.

A Case in Point: When Adoption Was Designed, Not Forced

A large enterprise in the cement and building materials industry faced challenges that will sound familiar to most CPG leaders.

Despite using enterprise-grade systems like SAP and Salesforce, the company struggled with fragmented data. Distributor information, sales orders, inventory levels, and financial records lived in different systems. Sales teams didn’t have real-time visibility into stock availability. Order rejections were common. Distributors faced delays in claim settlements and reconciliation, leading to frustration and mistrust. In short, growth had outpaced the systems supporting it.

The turning point was not introducing another tool, but rethinking how systems worked together and how distributors experienced them. Instead of asking distributors to change how they operated overnight, the company focused on integration and automation. Distributor master data was centralised. Inventory and warehouse systems were synced in real time. Orders placed by sales teams flowed directly into the ERP without manual intervention. Credit and debit notes were generated automatically, reducing disputes and accelerating cash flow.

What changed was not just visibility, but confidence. Sales teams could place orders knowing stock availability was accurate. Distributors could see real-time balances and outstanding amounts without chasing teams. Finance and sales worked off the same data, eliminating reconciliation delays.

Most importantly, distributors started seeing immediate value. Claim cycles shortened. Disputes reduced. Operational effort dropped. Adoption followed naturally, not because it was enforced, but because it made business easier.

What This Teaches Us About DMS Adoption

The Chennai discussion distilled this case into a few critical lessons that apply across industries:

Integration drives adoption, not instructions
DMS works when it connects sales, inventory, and finance seamlessly without adding duplicate work for distributors.
Visibility must benefit everyone
Adoption increases when distributors gain real-time control over inventory, cash flow, and balances, not just when brands get reports.
Remove friction to drive usage
Automating reconciliation, claims, and order-to-cash eliminates the manual effort that quietly kills adoption.
Trust is the real outcome
A shared source of truth shifts conversations from disputes to decisions and strengthens long-term partnerships.

A More Practical Adoption Approach

Leaders at the RI Tour agreed that increasing DMS adoption requires a fundamentally different approach:

Design for distributor realities, not ideal processes
Offer flexible deployment models based on digital maturity
Reward compliance through operational ease, not just incentives
Ensure faster claim settlements and financial transparency
Measure success by usage quality, not just login metrics

When these elements come together, adoption scales organically.

Looking Ahead

The Chennai discussions made one thing clear. DMS adoption is no longer about digitisation; it’s about intelligent system design and empathetic change management. The next phase of growth will belong to brands that stop asking, “Why aren’t distributors using our systems?” and start asking, “Have we designed systems worth using?”

Because in a market where complexity is the norm, the real competitive advantage isn’t more data, it’s systems that make data usable, trusted, and actionable for everyone in the ecosystem.

And that is where the future of distribution will be won.