Many think that supply chains are more digitally connected then they are in reality. The industry is still lacking vital B2B supply chain integrations across the entire ecosystem due to the late digital boom in the industry. Small changes have been happening, but the ultimate transformation of supply chains is yet to come.
Lack of connectivity has negative impacts
The lack of connectivity has many negative impacts on competitiveness. Some of these negative impacts are inefficient processes, longer delivery times, prolonged order to cash periods, or high overhead costs. Ultimately, these inefficiencies of supply chain management can be improved with the help of system and data integrations. Streamlining processes will result in significant cost savings. Finally, enterprises have started to recognize the value of digital transformation, and they are now starting to put more emphasis on data integration strategies.
Correlation between supply chain performance and B2B Integrations
There is a clear correlation between supply chain performance and the maturity level of B2B integrations. The better an enterprise is connected, the better it will be able to cooperate with its business network in real-time to streamline its operating processes.
In this blog, we are identifying the business drivers of why supply chains need to become truly digital and connected and how business-to-business integrations sustain the transformation.
Become a truly digital business
Supply chains are extremely complex business networks. Suppliers, third-party logistics providers (3PLs), customers, and manufacturers need to be able to communicate with each other.
The ultimate purpose of connectivity is to share information, preferably in real-time or as close to real-time as possible. Nevertheless, it’s a daunting task. Data is often located in data silos, some architectures do not support connectivity and data sharing, or there are a variety of formats in use. Overcoming these obstacles is a top priority.
Digital change leaders need to find solutions for their complex system integration challenges to enable the flow of the data in real-time. A well-connected enterprise can ensure that the information is always available for all the relevant parties at the right time and place.
Increasing pressure from business network
Better connectivity with your stakeholders will result in improved cooperation with them. The lack of data and system integrations may even result in lost business opportunities. Some of your competitors may already offer B2B integrations with speedy on-boarding times and they can perhaps send electronic messages in the preferred message format. This clearly speeds up the way two parties are able to cooperate with each other.
Data integration strategy
Developing integrations across the entire B2B ecosystem is challenging. It requires a good plan, excellent change management skills, constant communication, and most certainly top-level support. Additionally, you need to find an integration vendor to partner with and support your integration strategy. Once you need to connect with more than two parties, building integrations in-house is not an option anymore.
You need to start out small before you would be able to connect with everyone. Start with a small pilot, so you can prove that the partner you chose is the right one for the tasks at hand and the solution is exactly that you have been looking for.
Once the solution is proven, go ahead and implement a bigger project – perhaps one that is crucial for your operations in terms of efficiency and overhead costs.
The digital change will clearly take time, but once you were able to connect with all your network and the data is flowing back and forth in the data format you prefer, things will improve a lot.
How to improve collaboration?
The answer is simple and we have already brought up this topic briefly above. The information must flow better across different parties, therefore it’s top priority to connect with everyone.
Why is it then not done yet properly? There are several reasons for that.
Developing integrations take time
Traditionally, it took months to develop connections across your business network. Nowadays, building integrations on top of cloud-based integration platforms and using managed services, new connections can be deployed into production within days.
The variety of technologies used at companies has been complicating the development process of integrations. With modern integration solutions, it’s possible to overcome the challenge of connecting legacy on-premise technology with cloud-based applications.
Integrations are expensive
This is a common perception. We published a blog post previously on why integrations were quite pricy earlier. Clearly, when you needed to purchase software licenses and pay for integration work by the hour, costs could add up if developing a single connection took months.
This is something we wanted to change to democratize integrations so it would be available for large enterprises and SMEs equally: you pay a one-time setup fee, then based on your message volumes, and for support work. If you want to know more about how iPaaS solutions are priced, you should read our blog.
Data formats
Many still use EDIFACT as the primary format for EDI. Nevertheless, some has already started to use formats, such as XML, JSON, X12, or in-house formats.
Heterogeneous data slows down data sharing. Real-time information is crucial for optimizing supply chains. Harmonizing data can give an edge by ensuring the availability of the data to all stakeholders at the right time.
It’s important to note that the information should be also flawless. Data must be validated during the transfer to enrich it as necessary as soon as possible.
Redesign and digitize supply chains
Integrated supply chain ecosystems will have a great impact on the industry, as well as on the global economy too. The information will flow better across stakeholders, boosting the transparency of organizations and establish visibility into the processes.
It doesn’t only improve the efficiency and the profitability of companies, but also heavily impacts one’s competitiveness. The available data can be utilized for generating insights. This can not only be the foundation of improving processes but also to find new business opportunities and develop digitally enhanced products, innovate and create new digital business models and improve the digital customer experience.
There are a few tangible benefits of digitizing supply chains, such as:
- Preventing delays in manufacturing and production
- Shorter delivery times
- Faster order to cash cycles
- Better inventory management
- Improved days sales outstanding
- Faster invoice processing times
How does iPaaS impact B2B supply chain integrations?
iPaaS has been developed to facilitate the connectivity between trading partners to enable the real-time flow of information to both ways. It is also commonly used for EDI integrations to speed up data exchange and move the transactions through the cloud. iPaaS is the catalyst of digitalization and it accelerates the automation of processes.
Developing complex integrations with iPaaS is easy, fast, and agile. The solution is provided as a managed turnkey service and it is maintained by the iPaaS vendor. On-boardings can happen within hours or days and the platform supports the scalability of the solution. As your messaging volumes are growing, the solution can be adjusted accordingly.
iPaaS is also the ideal tool for managing the data, translating the message formats, and ensuring data integrity. To streamline processes, it is crucial that the data is validated and enriched as needed.
There are endless possibilities with iPaaS in terms of data and system integrations, so if you are wondering whether you should evaluate it as an option for digitalizing your supply chain, you want to continue following our blog for more insights.
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