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Business Transformed: B2B Communications Hold the Key for Success in Today’s Economy.)
In this two-part series, Business Transformed, we discuss how today’s businesses need to adopt of broad spectrum of B2B communications methods that connect the enterprise to their trading partners, customers and government entities.
In this part one we discuss the requirements for B2B communications across four main focus areas: Logistics Processes, Commercial Processes, Product Development and Standards, and Customs (import/export information and requirements).
Introduction: World in Transition
Our global economy operates in networks of business relationships driven by a myriad of complex processes. This web-based marketplace has created new models of competitiveness, catalyzing an urgency for enterprises and their trading partners to collaborate in new and profound ways. Organizations have to execute both globally and locally with the same precision. Supply chains are stretched across the globe, yet customers expect precise delivery windows right to their door. Governments are demanding digitized and accurate data as goods move across borders. Intermediaries want precise to the hour — the minute — information so they can manage the many services and hand-offs required for effective supply chain management.
Executives have spent countless hours and millions of dollars fretting over their enterprise solutions. However, scant attention has gone into the technology we rely upon to operate with our trading partners: B2B communications. In most firms this is often outmoded or, at best, incomplete. Now that has to change. Though Electronic Data Interchange (EDI) is the major glue utilized today (as well as vast custom system-to-system integration programs), the job is incomplete.
The world of information technology is rapidly evolving. Within today’s networked economy are rich information networks that are supplanting the old, limited-in-scope and difficult-to-integrate enterprise technology. Supply chain technology networks, the Internet of Things (IoT), as well as mobile and social integration are now expected as part of the modern “glue” that holds the chain together. These networks can manage ecosystems of partnerships that explode with information that we are only beginning to understand and leverage.
But first, business executives need to re-insert themselves into B2B communication strategy and understand how it can help them achieve the next level of competitiveness. And IT needs to educate and ignite their attention to ensure that B2B communication is a priority.
We will explore the world of B2B communications in this paper and the modern processes that are driving today’s virtual, outsourced and webbed world, driving a new generation of customer expectations and trading partner requirements. We will highlight the B2B technologies that can help achieve exceptional collaboration and competitiveness.
Enabling Global Commerce
Is your business commerce ready to do business with any and all new customers — the way they want it? Do you have timely visibility into your supply chain across your commercial processes such as order-to-cash and purchase-to-pay (P2P)? Are your processes and systems geared for real time to reduce risk and take advantage of opportunities that materialize? Critically, logistics has taken center stage for many, requiring integration and visibility with carriers and logistics service providers. And what about global trade? Today, governments, customs, and logistics service providers need all the data as early and accurately as possible to secure capacity, reduce operating costs, and ensure frictionless border crossing.
These concerns are shared by trading partners. 80% compliance will no longer sustain an ecommerce-driven world that demands 100% data transparency and precise execution. To compete in the global economy requires digitalizing core communications. These core operations and the supporting integrated information (Figure 1) represent the operational foci of global chains.
Let’s look at these core operations and see how they are transforming.
Commercial Processes: It All Starts with the Order
Today, end markets (retailers, manufacturers, distributors) are demanding visibility into upstream inventory for allocation and available-to-promise. They expect brilliant responses from their suppliers. Suppliers, conversely, want information about end markets so they can understand changing customer demand and innovate new products and services. All these needs are fueled by digitizing the supply chain with real-time and granular information.
The digitized purchase order, for example, holds key data to be shared across multiple upstream constituents — n-tier suppliers, freight forwarders, and carriers — in interconnected processes.
As more processes get transferred to suppliers (e.g., relying on suppliers to drop ship or manage free-trade zones in target markets), traditional EDI alone may not complete the connectivity set.1 Task instructions and queries need to flow system to system and person to person, relying on application interfaces (APIs), emails, faxes, and workflow management tools. Task-level functions such as available-to-promise, engineering change orders, new configuration requests and data updates to existing shared data syncs2 are beyond the purview of EDI.
Across the commercial relationship, the financial interactions are critical elements, often overlooked in a B2B communications strategy. Yet finance is the raison d’Ãªtre of commerce! Collaboration falters when financial information is not handled with care. Thus, e-invoicing, rating and other financial transactions should be envisaged in the B2B environment.
Digitalizing import/export processes is not just about customs compliance, but is a key enabler of frictionless global trade. Even the smallest enterprise requires the ability to manage the countless complexities of cross-industry/cross-border supply chains with their attendant financial and trade regulations. With electronic filings, lack of adherence3 to regional and country-specific regulations will preclude doing business in your desired target markets. Yet, trade regulations are constantly changing, making it difficult to keep up. Here again, precision across processes allows not just accurate duty, VAT and other taxes, but cost saving duty drawback.
Though some enterprises rely on freight forwarders to create customs filings, the information contained therein is a rich data source that can be shared between service providers and shippers, supporting many other communications streams.
These global trade communications streams, in a sense, represent the various interactions between container and conveyances, facilities and locations), the commercial activities (contracts, orders, and other transactional information), the entities (customers, shippers, consolidators, carriers), and regulators (licensing agencies, customs, and border security). It is rapidly becoming a requirement for these streams to harmonize at the border to meet multiple party concerns, from product authentication and inventory visibility to anti-terrorism.
Product-centric issues, though not transactions per se, are still a critical focus of many B2B interactions: product lifecycle management; product standards, certification, and authentication; catalogue management; and inventory visibility.
To ensure required inventory levels as well as maintain freshness, there needs to be a stream of inventory messages and status updates flowing between sellers and suppliers. As the complexities in channel management grow, location data about inventory to inform demand planning and outbound shipping is also required. This information not only feeds replenishment activities, but more strategic analytics such as designing supply chain networks.4 Product data flows inform a myriad of activities for discrete product chains (such as electronics, appliance, and other mechanicals) for their distributors, service parts-depot managers, and repair technicians.
Today, product data is also shared with consumers in a variety of media formats — print, web, kiosks, mobile, configuration and design systems,5 and at the point of sale (POS), to name a few, requiring information systems to be able to interpret and present big data formats — graphics, video, temporal data and sensor data.
Catalogue data synchronization6 is becoming more widely adopted, reducing constant data re-entry and errors.
For a brand manufacturer leveraging the information, creating a catalogue entry once ensures that your product is properly described, displayed, and priced. The benefits of speed to market and cost reduction from not having to recreate these catalogues at each end point are huge.7
Transportation is increasingly at the forefront of corporate strategy as companies grapple with global sourcing and Omnichannel. And, now, with the internet of things, there is an implied immediate service response.8 Customer logistics services to support these changing models are revamping the entire transportation industry, requiring a new approach to B2B communications.
Across global chains, change is happening. Today’s importers want information and control to inventory within the container and the ability to reroute products to different end markets. This means a real change in the business models of ocean carriers and port operators who have not been part of the “visibility” game to date. Talk of smart containers or fast-lane container management will need to be backed up with collaborative information systems from shippers to freight forwarders, carriers, customs, and other logistics service providers, right through to the importer.
Omnichannel is the ultimate, inclusive operation in commerce today, demanding a behind-the-scenes dynamism not experienced before. While a customer is shopping, the merchant is checking inventory across multiple stores, warehouses, suppliers, and, possibly, multiple carriers to offer the customer the best availability and pricing options. That “in stock” and “order by 10 pm and have by 9 am” is a promise even before the customer hits the buy button.9
These searches represent more than random queries: suppliers have to be ready to promise actual inventory. Then, once the purchase is complete, all the parties must execute. A confirmation must be delivered in seconds with all the transactions committed to by partners in the background. Drop ship is also becoming the norm, especially with larger products such as appliances and furniture. To do this takes both a rich API library to connect to the network of trading partners’ real-time availability, terms, and pricing; and EDI transactions for orders and commitments. The old “store-and-forward” approach to EDI just won’t support this responsiveness.
To master a process such as this requires not just purchase/confirmation communication, but must also traverse transportation transactions that are operating almost in unison. This highlights the need to improve transportation efficiencies and information connectivity.
In the next installment of Business Transformed, Part Two, we describe the technologies that are essential today — not just EDI, but others such as APIs, IoT (connected/mobile equipment and device networks) workflows, etc. and the benefits of these technologies to enable a digital supply chain.
1 More than the EDI procurement transaction set. — Return to article text above
2 This can include details from inventory, configurations, discounts, and so many other tasks between customers and suppliers. — Return to article text above
3 ACE/AES, Intellectual Property and other licenses and regulators: in Japan, AFR; or Europe, EU. — Return to article text above
4 Facility and inventory optimization exercise. — Return to article text above
5 Computer Aided Design (CAD), Product Lifecycle Management (PLM), and Product Information Management (PIM) systems, for example. — Return to article text above
6 “Catalogue Item Synchronization is the process of continuous harmonization of item information between trading partners which ensures that the master data is the same in all trading partners’ systems.” (GS1 definition.) You can read more about these standards here. — Return to article text above
7 Product traceability is another area of benefit for companies, but has already been widely written about elsewhere. — Return to article text above
8 Read Optimizing the Customer Experience with Exceptional Home Delivery. — Return to article text above
9 Home Delivery is not just an issue for retailers. Read Always On and read more at Home Delivery strategies. — Return to article text above
To view other articles from this issue of the brief, click here.