Through this blog, I’ve worked to raise awareness about the critical importance of integrating information and business processes across a business-to-business (B2B), or supply chain, network. It’s important because more supply chain business processes and information flows occur and reside throughout the external supply chain network, and needs to be integrated into internal systems, applications and decision-making.
Interoperability and exchanging information is especially critical – in some cases, a necessity –for manufacturers supporting direct materials and product value-chain needs across a global network. Interoperability should not be considered as supporting a singular functional process need, but rather an electronic connection that integrates all information flows among suppliers, customers, trading partners, financial institutions, logistics providers or any valued supply chain ecosystem partner, across the globe.
What’s more, B2B integration technology must be adaptable to today’s rapid pace of business. And it must enable the journey toward supply chain process maturity and more informed and timely decision-making. The longer-term requirement is often the ability to seamlessly support not only P2P and order-to-cash, but also broader B2B decision-making process needs leveraging near real-time information exchange.
More and more, analytics and timely decision-making capabilities are now network considerations. Information visibility must be more than static in nature; it must be dynamic (for instance, how much on-hand inventory currently exists across the network) and contextual (such as associated inventory coupled to customer orders).
The B2B network must further be seamless, non-disruptive to the current systems landscape, and it must support a transformation beyond just two-way electronic transactional flows to more interactive forms of business process collaboration, electronic workflow, information exchange, and supply chain business intelligence requirements, today and in the future.
The emerging choice for supporting that journey is cloud technology. Cloud can bring together data management, analytics and connectivity to integrate key information about customers, suppliers, trading partners and other support partners and create a modern B2B network.
Importance of Cloud-Based Technology
In our view, an organization’s journey toward mature B2B integration is made possible by today’s advanced cloud-based platforms, applications and infrastructure.
Cloud-based technology is seen as a response to growing industry frustrations with rising IT technology costs and service challenges. All corporate functions are under enormous pressure to reduce costs. That includes IT; studies consistently show that up to 75 percent of IT costs stem from maintaining existing IT infrastructures or business software applications, particularly those that are external.
Throw in ongoing line-of-business and supply-chain frustrations with on-premise ERP and legacy business applications — those designed before the emergence of modern business and supply chain frameworks — and the pressure to change is even more compelling. Processes are continually being created, changed or incorporated into broader network-focused needs and requirements.
Businesses must avoid the costly time and expense of upgrading their IT systems. This has spurred major enterprise system vendors to bring cloud-based technologies to market to provide technology optimization with minimal cost and disruption. Another benefit to cloud-based systems is their ability to be continually updated to reflect changing business needs. Why settle for innovation every one to two years when every six months or less is an option — and with lower capital and overhead costs?
It is no surprise that many of today’s supply chain network providers have elected to develop their solutions on, or transition to, cloud platforms, because they clearly understand that the network is inherently cloud-based.
Conclusions and Recommendations
When considering an investment in an integrated B2B network, or expanding the scope of an existing platform, a cloud-based platform can minimize disruption to existing systems while supporting short and longer-term needs for business growth, process and external partnerships. Consider a cloud-based platform that can support multiple supply chain business process needs, while adhering to the varied data security standards and practices that exist around the world. And look for a service provider that can deliver leadership and expertise, as well as the services needed to support quick, efficient growth and enhanced capabilities to deliver innovation.
There is no question that analytics and broader, more predictive business insight capabilities are opportunities to transform B2B business and supply chain business networks. The opportunity — and indeed the necessity — is to leverage an end-to-end business network to synchronize planning, execution, customer fulfillment and more predictive decision-making needs.
© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
Disclosure: This blog is sponsored by OpenText.