By Nick Roquefort-Villeneuve, Global Marketing Director – Amalto Technologies
Regardless of where your organization is placed on the B2B exchange spectrum, whether you are a supplier or a buyer, it is utterly vital that you be able to exchange all sorts of business documents with your trading partners in a private, secure and customized environment. Why is it vital? Any dysfunction at any stage of the processing of a purchase order or an invoice can ultimately affect your business’ efficiency, productivity and consequently its bottom-line, which quickly creates a situation that is not sustainable.
There are definitely hurdles to streamlining exchanges with business partners, and one of which resides in the fact that they may have different standards than yours regarding the format and/or structure of the documents exchanged. How about poor, low-end or quasi-inexistent automation among partners? Let’s face it, the Excel and QuickBooks of this world immediately become obsolete as soon as an organization says goodbye to a Rookie League to start playing Double-A baseball. Sorry if you’re not familiar with the fascinating world of minor league baseball... But those teams sure have the best mascots (google the Montgomery Biscuits and the Jacksonville Jumbo Shrimp). Moreover, a mid-size company may have a pretty decent ERP system, but what’s the true value if its data tables store information that was keyed-in manually upon receiving a purchase order by fax? Those practices quickly become inadequate if not unacceptable when a business envisions to tap into a greater dimension, where B2B exchanges get much larger and more complex.
A solution: Integration.
B2B Exchanges: Business Growth Challenges
5 main challenges:
- Lack in supply chain cooperation: There needs to be a recurring exchange of information among trading partners, so suppliers and buyers can transact with the least volume of friction possible. To that effect, the following metrics need to be quantified: the buyer’s inventory turnover, the time it takes the buyer to place an order, the time it takes the supplier to process an order and ship the merchandise, the time it takes the buyer to prepare the stock receipt for sale or use.
- Significant increase in trading partners: To step into a new business dimension signifies having to integrate and accommodate new business partners along with their respective set of requirements: specific document fields and format, hubs and everything in the middle.
- Existence of multiple sales channels: Large enterprises aren’t immune to resort to what may look old school today to send purchase orders or push their invoices. Email and fax are still channels of predilection for some. Anyway, the more channels to manage the more complex it is to deliver on time and fully satisfy customers.
- Cost of B2B integration: There is still an arbitrage between the perceived cheaper good old ways and the expensive technological integration of trading partners. The problem is that those good old ways become hardly manageable and viable in the mid-run.
- Absence of IT infrastructure: Hiring individuals with specific skillsets to handle IT-related tasks internally is costly and might not be on the top-management’s agenda.
Competitive Advantages of Integrating Trading Partners
The idea behind integrating trading partners is to go paperless, by replacing manual processes with automation, so all parties can engage in business transactions seamlessly and efficiently.
The advantages are multiple:
- Faster processing: Documents travel electronically between the ERP systems that buyers and suppliers have in place, without requiring any human intervention, which eliminates the possibility of data entry error.
- Enhanced accuracy: Integration also means that you are given the ability to immediately absorb the transferred data in your internal applications, so you can use it and proceed accordingly. What does it mean exactly? Senders and receivers may not be using the same type of document format, the same fields, the same naming convention, etc. Trading partners integration allows to “translate” those requirements into yours and vice-versa, so you and all the other parties involved can transact smoothly. This feature tends to eliminate manual labor and therefore human errors. Furthermore, integration solutions can also offer workflows as a feature. If permission to proceed needs to be escalated, a reject/submission button is available on the solution’s user interface, so a superior can confirm or put an end to a step from the click of the mouse.
- Reduced costs: System automation puts an end to a wide array of costs associated to human labor, paper-based operations, discarded purchase orders and misplaced invoices, delays in merchandise deliveries, mismanagement of inventories, among many others.
- Strengthened relationships: Efficient internal operations have an impact on relationships with trading partners. For example, a supplier’s speed of execution can only satisfy his buyers, create loyalty and repeat business.
Integrating Trading Partners: Leave That to the Pros?
There are solutions on the market that specialize in connecting trading partners with one another and, throughout the implementation process, are able to handle an extremely high level of complexity coming from all ends of the spectrum. Those solution providers bring indeed their extensive IT expertise and resources. Thus, organizations are given a broader access to instruments that have the true potency of boosting their overall business operations in spite of being confronted to their own technological limitations.