Comparing wholesale distributors to teenagers may be quite a leap. But one e-business professional makes that very analogy when discussing the attempts by many distributors to move their companies from what he calls "a paper environment" to one that is fully connected electronically.

Andy Duncan is CEO/president of Advanced Data Exchange (ADX). Nearly seven years old, the Newark, Calif.-based company has contracts with more than 300 of the Fortune 1,000 companies.

Duncan feels that with family-owned distributorships, "as a generational change happens, and the younger people come in, there'll be more and more automation. And we see this especially in the industrial distribution space."

Sons and grandsons (and daughters and granddaughters) come in and implement these technological changes. After all, they've been surrounded by connectivity, in many senses of the word, for most of their lives now, much like Duncan's two teenage daughters.

Unlike teenagers of generations past, they don't a lot of time on the phone, Duncan laughs, "but they cannot live without a computer, can't live without 'chat.' Years ago, teenage girls would be on the phone all the time."

It is a far cry from the days when some distributors were viewed as "laggards," by Dun-can and his colleagues at ADX, a provider of supply chain integration services. But the "laggard" label is one he cites sympathetically.

"Anytime you ask someone to change their business process away from something they've been doing for 20 or 30 years, it's difficult," Duncan says. "In wholesale distribution, there has been a slower-than-normal adoption of electronic connectivity to the suppliers. But when a distributor peels the onion back and takes a look and asks 'What's going on in my business?' one of the first places they can look to reduce costs and drive efficiencies is by getting their supply chain connected."

Duncan has some advice for distributors who are contemplating such changes. One area he has seen evolve in recent years is in the demands companies make when they purchase software. More companies are asking potential providers to deliver what he calls "a service versus a software solution."

"Any great software salesman could walk into a big distributor and say, 'You need to spend $5 million on this software package and it will do all these wonderful things for you,'" he says. "That's the old days. Companies are not spending $5 million anymore on software packages."

Instead, many companies who finally decide to leave their old paper environment behind go with a services solution provider that can act like a clearinghouse for their data translation. Duncan says this has enabled many businesses to make the electronic transition more smoothly. He sees this trend continuing.

In 2002, Duncan told INDUSTRIAL DISTRIBUTION that he felt 2003 would be "the year of the supplier, the year of e-commerce transactions for the supplier." He was confident then that many cost barriers that had been preventing some distributors from getting fully connected were starting to drop. So far, so good. Any predictions for 2004?

"I won't say that 2004 will be the year of the supplier," Duncan says, "but I will say it is going to be the year of deep industry self-evaluation about the way in which processes are managed, particularly between the wholesale distributor and their supply chain."