As it proceeds to spend about $30 million to deploy new ERP software to better manage its business, Patterson Companies Inc. has its eye on a winning formula: Better data to operate a more effective e-commerce platform and team of sales reps.

Patterson’s ERP system, from business software provider SAP SE, “will ultimately help drive new efficiencies across our enterprise and provide the foundation for more ambitious and effective e-commerce platform,” Ann Gugino, executive vice president and chief financial officer, said during recently during a May 25 fourth-quarter and year-end conference call with stock analysts, according to a transcript of the call provided by Seeking Alpha.

Scott Anderson, then-president, chairman and CEO, added on the conference call: “One of the things we’re excited about is the ability to tailor the customer experience in a more personalized way. And that looks to things like self-service for the customers, scheduling online, richer data that customers can use to drive their practices.” (On June 1, Patterson announced that Anderson would resign as president, chairman and CEO, effective immediately, but would remain on the company’s board until the 2017 shareholder’s meeting. James Wiltz, a board member and former Patterson CEO, will serve as interim president and CEO until a permanent as the board searches for a new top executive. John Buck, the company’s lead director, will assume the role of non-executive chairman.)

Patterson, a 140-year-old distributor of dental supplies and animal health products, receives more than half of its $5 billion in annual sales electronically, Anderson said on the conference call.

Its Patterson Dental unit operates PattersonDental.com, where it sells equipment, supplies and services for dental offices. PattersonDental includes an app store where dental professionals can purchase mobile apps and other software applications designed to help them operate their businesses. It features apps and software, for example, designed to protect patient data, adhere to government regulations, manage marketing campaigns and place mobile orders from Patterson’s product catalog.

The company’s animal health unit, Patterson Veterinary Supply, operates Pattersonvet.com, which sells animal health equipment and supplies to veterinarians. The site also sells software applications that veterinarians can use to manage their business operations.

Anderson said that better information coming out of the new ERP system, which is expected to be completed in the first half of next year, will also increase the ability of Patterson’s sales reps to help customers research and place orders by providing more complete and updated information on available products and on customers’ past purchasing records. “Our best reps are great business consultants,” he said.

The cost of deploying the ERP system was a major contributor to Patterson’s 8.7% drop in net income for the fiscal year ended April 29, 2017, Patterson says. The company has also been dealing with a drop-off in sales in its dental business, which declined 8.3% in the fiscal fourth quarter, while animal health products increased 6.0%.

Anderson added that, going forward, Patterson expects to use its ERP technology along with its e-commerce platform and sales team to take its overall sales performance to a new level. “One of the things I love about Patterson is we were trailblazers,” he said. “And I go back to my early days as a sales rep installing electronic ordering systems pre-internet back in San Francisco. So over 80% of our business today comes to us electronically, but we have an opportunity to take this to a whole other level and that’s why getting the plumbing right, the infrastructure right and making that investment now is so critical.”

For the fourth quarter ended April 29, Patterson reported:

• Net sales of $1.445 billion, down 0.6% from $1.454 billion;
• Gross profit of $335.50 million, down 7.8% from $363.74 million;
• Net income of $61.49 million, down 6.3% from $65.62 million.

For the full fiscal year ended April 29, Patterson reported:

• Net sales of $5.593 billion, up 3.8% from $5.387 billion;
• Gross profit of $1.30 million, down 1.5% from $1.32 million;
• Net income of $170.89 million, down 8.7% from $187.18 million.

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