Last month, I outlined what turned out to be the first four pages of the AI 2030 Strategic Framework. I covered a basic summary of where the industry currently stands and how distributors feel about the process and the opportunity.
This month, we will move on to next four pages, which further covers steps to take to produce a workable plan to produce meaningful steps and personnel to guide management through the process and eventually to the decision making of how to invest in AI as well and execute and generate a tech investment that will pay off and keep the company in line with their competition.
But, before we dive into the details, I would like to share some data I have received over the last month that is meaningful in our current financial environment. I sent these docs to Dean, and he has them saved and available if you want to read them.
Two BDO papers on accounting for tariff transactions. A confusing topic where it would be nice to have support if you have a potential refund available.
Another paper from BDO covering the current M&A market, whether you are a buyer or seller. AI issues will drive a number of transactions, and this provides all the steps you will need to address if you are a player.
An article entitled WHAT YOU’RE NOT BEING TOLD ABOUT THE ECONOMY. The best article to date that makes sense, with parts of the conclusion dealing with the M&A issue. (FYI, I was an audit partner at BDO)
Moving on to the Strategic Framework for AI, it seems someone has to lead the charge to keep the process on track. These could all be internal people, or a tech company with the experience of getting your company from point A to point B, producing a workable, profitable new system to lower costs and improve margins.
The issues that need to be addressed
Skill gaps. Tech gaps. Training before any pilot launches. Invest in training as necessary. Executive participation a must.
Begin with HIGH -ROI applications. Those are the easiest to attain. Keep scalability in mind. Move up to advanced applications. Engage current system providers to ensure outcomes align with expectations. Make sure upside potential is available.
Invest in skills and partnerships. These are the folks who fill that “WHO” need for a partner who can guide the process and help with investment spend and decision-making. They can also help educate employees to ensure they can support this AI effort.
Management change programs are a must. Educate all employees about what is going on. Engage in role-playing before launch and thereafter until all systems are synced, providing the data needed.
Review and update all data creation and movement processes. Audit the data from each department, list any problem areas, and adjust as necessary. Be especially careful regarding data flow between existing revenue silos. This will be a tough assignment requiring assistance from your conversion partners.
Determine ROI performance against the original plan. Devise a plan to calculate the returns. Use ROI metrics to track results. Measure ROI over a 3–5-year period. Here again, your partner should help prepare the metrics used in the calculation.
A long-term plan is helpful and can be compared to financial data on a quarterly basis against the original plan and prior quarters, with adjustments made as necessary to meet goals. I would suggest that your partner should drive this process and offer suggestions for improvement. Management should also question operating results against the plan, their competitors, and industry data available. Having a performance group to assist with this process will help identify departments needing adjustments.
This gets me to page 8 of the program. More next month.
As a result of this AI work, I made it a point to try to find a PARTNER a dealer could use who has experience and can guide the process to ensure your investment produces what you need to run your business. After numerous discussions with folks, I received a call from Columbus Global, which has a small number of experienced leaders who can help set up a program and guide you through it. Columbus Global is prepared to produce a white paper based on dealer activities that cover.
- The Problem- A four-pillar framework to get it done.
- AI Governance and what Dealers need to know.
- Measuring AI return – A scorecard for Dealer Operations.
What they need, however, is some volunteers to participate in the program. In other words, they will work with the volunteers and then highlight how the process could apply to lift truck dealers. No participant information would be disclosed.
These are folks who do this for a living. If we can get some volunteers to help out, the white paper would help dealers decide how to move ahead regarding these issues. Maybe an OEM would be interested in this information.
No matter what, every dealer needs to go through this process or decide if private equity is a better option. In other words, if you do not participate in a process such as this in the near future, chances are an exit program will be more likely.
As you have probably heard, the Tech conventions have recently taken place. And guess what? Jensen Huang stated that eventually every industrial company will become a robotics company. Manufacturers are projected to more than double their use of AI and automation by 2030.
Think about helping out with the AI transition program. You will help yourself and the industry.
About the Columnist:
Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail [email protected] to contact Garry.
