B2B integration: Automation for growth
As customers become more empowered and savvy, companies are under mounting pressure to meet ever-increasing expectations. For many of these companies, ensuring that products meet customer demand can be more complex than you think. Behind the scenes, a company may be engaging in hundreds, perhaps thousands, of interactions with trading partners and suppliers to make sure that the right goods and materials are sourced and delivered.
Historically, many companies have generally used a tactical approach to tackling their business processes. These organizations typically implemented point solutions that in isolation solved the most pressing problem, but never addressed the bigger picture of full automation. And by implementing one system at a time, companies inadvertently built silos, which led to integration challenges. “In the past, it’s been day to day firefighting,” says Scott Lewis, Senior Product Marketing Manager for Sterling B2B Integration Solutions at IBM. As a result, companies are often left with a tangled web of disparate systems that are connected with many manual processes, limiting a lot of the potential value of automation that companies could achieve.
The need for B2B integration
Often as a business grows, so too does the number of trading partners, suppliers and customers. And as each partner, supplier and customer has its own set of needs, a company’s business processes can become more abundant and definitely more complex. For midsized companies, growth can place pressure on the business ecosystem and reveal weaknesses in the supply chain.
A recent Aberdeen report, “Understanding the Complexity of B2B Integration: Insights for Mid-Market Leaders” found that 44 percent of midmarket companies are feeling under pressure by the lack of business process integration which leads to poor customer, supplier and trading partner communication. “With a lot of companies,” says Lewis, “even if they have an electronic connection with a supplier, they may not have a connection to their backend systems, meaning that transactions can’t flow from the system to the supplier or back without manual intervention.”
The key to holistic B2B integration is automation. Manual data entry and formatting introduces human errors that left unchecked can cause larger problems down the supply chain.
One midsize company, a leading global distributor, was experiencing a similar problem, albeit one borne out the company’s recent success. Rapid sales growth in the company, namely an expanded trading partner community and increased transaction volume, revealed some limitations with their previous EDI software. Slowed down by manual processes to format data and resulting human errors, the company’s software was incapable of supporting the company’s growth, today and in the future.
Scott Hulme, Vice President of Services, Sourcing and Software at The REMEDI Group which worked with the midsize distributor, knows this to be an all-too-common challenge for midsize organizations. “Our clients have utilized an EDI translation software application that many years ago once met their needs when they first implemented it and when the demands on the EDI environment weren’t complex at all. Now with changing complexities within their EDI environment, these companies are experiencing the need for automation of processes and integration with external trading partners and internal processes that current EDI translators cannot support.”
The key to holistic B2B integration is automation. Manual data entry and formatting introduces human errors that left unchecked can cause larger problems down the supply chain. And as midsize companies continue to grow, the inefficiency of having to reenter or massage data can take its toll. How many midsize companies still rely on processing paper or manually reentering data? According to a recent survey conducted by SmartBrief, 88 percent of their readers rely heavily or partly on manual processes when working with their suppliers.
Compounding the pressure to automate operations is the shift of many companies into a more global environment where they are faced with customers and suppliers in regions outside of their comfort zone. Over the past decade, for example, the average number of trading partners of IBM Sterling’s B2B Collaboration Network customers increased 400 percent – an increase that is mainly due to market globalization. For companies, an increasingly diverse business community often translates to a complex world of new standards and regulations, additional protocols to support, supplies and partners with varying degrees of technical sophistication and multiple platforms to address. “Something often changes for these companies,” says Lewis. “Either government regulations require the data to be treated differently or an overseas customer needs a data in a new format.”
And companies know they are in need of help. Hulme sees an increase in clients that want to move away from manual processes to full automation. “We get requests on a daily basis… from companies that are looking to move to a best of breed solution that allows them to customize workflows to their needs.”
Better integration = ready for growth
Today’s B2B integration offerings allow companies to easily and cost-effectively automate their internal business processes and extend these automated processes out to their customers and suppliers. Not long after upgrading its system and implementing Sterling B2B Integrator, the midsize global distributor began to see real business results. In addition to gaining up to 30 hours per week of productivity, the company reduced errors, eliminated many of its manual processes and was able to get unprecedented visibility into the company’s data. The distributor was able to also “automate and integrate in ways that they haven’t done in the past,” says Hulme.
According to Lewis, companies that automate processes with Sterling B2B Integrator can generally see reduction in administrative costs of 30 to 60 percent over manual processes. That kind of savings can speak volumes to a midsize company with limited resources. “The holistic platform ultimately provides a less expensive solution to operate and from a process standpoint, provides better integration with backend systems,” says Lewis.
In fact, the right solution can reduce costs and improve communication. With an integrated value chain, companies can process orders and ship product more accurately and quickly while ultimately conducting business in a more secure manner.
According to Lewis, the first step for any company that wants to get started is to look for the manual processes that can plague a business. “Start looking for piles of paper. Figure out how to automate those manual processes.” This approach allows a company to identify the low hanging fruit that will demonstrate fast results.
Companies can next try to better understand how their business functions on the front lines, namely sales and customer service. These departments have a unique insight into how a business provides customers with the answers they need from an end-to-end perspective. “Understand the process,” says Lewis. “If a customer calls in, what do you do? How long are they on hold or have to wait for an answer?”
When tackling integration challenges, companies have a plethora of software options, cloud-based solutions and managed services solutions to choose from. Hulme recommends that while cost is always a factor for smaller companies in particular; midsize companies should consider the scalability of the solution. “The key is finding a solution that accounts for the company’s needs now and is scalable for future growth.”
Lewis adds that that working with a trusted partner or advisor to lay out an upgrade plan and assessment can be critical to success. And one that understands the unique integration needs of a smaller business can make all the difference. “Each company has its own set of challenges. A one-size-fits-all approach doesn’t work. Companies need to take a step back and think of a strategic approach to B2B integration.”
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