In-Depth
Eight B2B Integration Resolutions for 2008
We offer key integration resolutions that will help you build true connections with customers and trading partners.
by Robert Pease
Has your company missed out on revenue opportunities or cost savings because integrating with your customers or suppliers has proven too difficult? Do exceptions, errors, and manual workarounds slow down your ability to process orders, get status updates, or realize new revenue? Like all of us, IT departments should look back on the previous year and commit to both improving existing operations and trying a few new things. For many, New Year's resolutions for 2008 will include better alignment of business processes and systems through more robust integration with business partners.
The following key 2008 integration resolutions will help you build true connections with customers and trading partners. The result creates a competitive advantage, helping to realize new sales opportunities, reduce delayed revenue streams, and minimize manual exceptions.
1. Say "yes" to customer requirements
Effective customer integration enables your business to get closer to its customers, creating the "stickiness" that keeps them loyal. Make it easier for your customers to do business with your company than with competitors. Make "Yes" the only answer when customers request support for their ordering requirements.
You must make it easier for customers to buy from your company. Integrating directly into customer back-end ordering systems (to create purchase orders) will lead to more transactions at less cost for longer periods.
2. Remove manual workarounds to increase revenue and reduce associated costs
An IT department can have a direct impact on its company's bottom line by taking direct action to remove errors within the integration chain. Electronic order processing does not eliminate data errors and manual exceptions. IT departments are crippled with manual exceptions to automated processes. On average, 10 to 25 percent of orders received require some form of manual intervention. This drives personnel costs higher and delays the booking of new revenue.
3. Link incompatible business processes
Companies operate differently by definition. This includes business processes, data formats, and transaction languages. True integration links infrastructures to ensure seamless information exchange despite disparate processes and IT systems, aligning IT with sales initiatives for an immediate impact.
4. Know when EDI is not enough
The New Year is the perfect time to shed the "good enough" mentality. EDI is a time-tested solution, but it is important to recognize when it is no longer enough.
Do you need real-time or near-time information exchange? Are batch transactions sufficiently flexible? Then it is time to look beyond EDI for a platform that better aligns business processes with integration. By constructing complete transactions that flow through your back-end order management systems and your customer's back-end procurement systems, you can achieve a streamlined flow of information for real-time transaction processing.
5. Make e-business a priority
Everyone is responsible for e-business, not just IT. Making e-business a priority means connecting and sharing information with customers and suppliers regardless of data format or infrastructure. Managed integration services ensure seamless e-business compatibility and processing, showing customers and trading partners that e-business integration is a priority.
6. Extend the ERP system to trading partners
If plans call for ERP upgrades, increase the return on existing infrastructure investments by extending the system outside of corporate firewalls to include business partners. The result delivers true integration and tighter relationships. By enabling secure and efficient delivery of communications across the entire value chain, you define yourself as an invaluable partner in the process.
7. Stop dwelling on cost reduction and start thinking about increased sales and margins
To improve customer service metrics, ask what customers truly want. The answer usually includes faster responses to pricing, order status, ship date, and availability. To implement deeper integration with your customers for faster access and delivery of information, think about what your customers want upfront to create tighter back-end integration that will improve the entire demand chain.
Begin to think strategically; augment cost takeout initiatives with revenue and projects focused on profitability. Deeper integration with customers and sales partners delivers top-line and bottom-line results, which increases margins and profits.
8. Reduce days sales outstanding by integrating invoice delivery and receipt
Leveraging best-practice approaches to integration deployment and management improves operational results and financial results. Electronic invoicing simplifies the sourcing reconciliation process and allows customers to pay for goods and services up to 30 days faster than manual means. Consequently, accounts receivable reconciliation becomes easier and cash flow into the organization materially improves.
By creating initiatives that get the ear of the CFO, the IT department will impact quarterly financial results by accelerating the delivery, receipt and payment of invoices. Direct integration to customer accounts payable systems reduces the time an invoice takes to process, and provides true visibility within the revenue stream.
Conclusion
Whether you fully or partially adopt these resolutions in 2008, these eight items serve as a roadmap as you weigh priorities and chart a path to the future. At a minimum, adopting practices and services that streamline business integration, improve information flow, and make it easier for your customers to do business with you results in more revenue and greater profits. In the end, the C-suite and sales teams will thank you – as will your customers.
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Robert Pease is vice president of marketing at Hubspan (http://www.hubspan.com), a provider of B2B integration services. You can reach the author at robert.pease@hubspan.com