The increasingly collaborative nature of modern business has opened the door to opportunity, but it has also created new challenges. In the push for collaboration, companies must connect to each other and to their customers to facilitate information exchange and connect business processes. As the need for this connection among stakeholders grows, the prevailing theme for many organizations is the problem of growing complexity.
As businesses facilitate higher levels of communication with customers and suppliers, maintaining oversight over the networks and processes supporting those interactions can become more difficult. As a result, researchers from Stanford University found that one of the most significant causes of inefficiency in B2B integration stemmed from the way companies communicate - more than 50 percent of information exchange was conducted by fax, email or phone. Analysts noted that companies stand to gain a lot by adopting solutions such as EDI and XML rather than rely on disparate exchange platforms that may be less secure.
It is worth noting that the challenges identified in the study affected companies in numerous industries, including manufacturing, financial services and retail, as well as businesses of all sizes - survey respondents' annual revenue fell between less than $100 million and more than $5 billion. While some of their motivations may have differed, analysts were able to identify a common solution among many organizations.
For example, one of the most prominent trends among businesses that had made an investment in B2B integration is the use of managed and IT consulting services to facilitate these projects. Part of the reason for this is to address the core challenges that emerge in implementation.
"B2B integration presents a unique set of challenges that does not exist with other types of technologies," the report stated. "Some companies especially smaller ones may lack the budget, resources or expertise to do business electronically. Other companies especially large ones may be fearful of sharing data with suppliers that work closely with their competitors."
Despite the data security and budgetary challenges, many businesses found that leveraging third-party expertise could ease the burden of implementing a B2B integration or supply chain management solution. In fact, 87 percent of respondents indicated they utilized some form of managed services to integrate with their customers while 68 percent said they did the same for vendor integration. Analysts identified the top reasons for investing in third-party implementation and support services, highlighted by:
- Improved customer experience (52 percent)
- Enhanced process efficiency (48 percent)
- Reduced IT costs (46 percent)
- Needed to upgrade an existing B2B integration solution (45 percent)
- Consolidated multiple B2B solutions into a single platform (32 percent)
Another possible motivation was to aid in global market expansion. Although this was only a primary business driver for 28 percent of organizations studied, researchers speculated that not every company was interested in expanding at the time - for those that did, the majority said facilitating expansion was the most important motivation for investing in B2B integration services.
Changes in the B2B integration market
While businesses themselves face an ever-growing complexity, they must also contend with the number of different solutions available. Particularly as demand for more robust B2B integration solutions increases, vendors will begin expanding their service portfolios. This is already apparent with the rise of cloud-based integration tools, and Stanford's analysts also highlighted the fact that managed service offerings would likely expand to include infrastructure and architecture modernization.
Enterprise interest in outsourcing everything from software development to IT resources has grown as businesses find they can do much more with an expanded pool of expertise to draw from. It can be helpful to allow a third party to handle some of the more complicated IT tasks to ensure that solutions are configured and implemented optimally. However, choosing the wrong partner creates the risk of losing oversight of these projects.
Whether businesses choose to leverage IT consulting services while handling most of the implementation themselves or they utilize a fully managed service offering, it is important that they consider how these technology partners fit into a comprehensive IT strategy. Fortunately, improving the processes used for communication can help in this area as well. For instance, a Smart Data Collective article noted that it helps to approach outsourced software development processes with a specific list of changes that need to be made. It is important to ensure that all changes, techniques used and software components involved are well documented.
The same strategy will prove beneficial for any IT project because it ensures that the business stays involved and clearly identifies expectations. The latter is essential for determining whether a partner is ultimately worth the investment because setting those specific goals allows organizations to measure performance. A partner that has their customers' interests in mind will provide data to back up their claims, clearly showcase progress throughout the project and work closely with key stakeholders to identify and resolve issues as they emerge.
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