EDI

What’s the Difference Between e-Commerce, EDI, B2B Integration and B2B Collaboration? And why Should you Know and Care?

e-commerce

There are lots of different terms used to describe B2B process automation. I am often told that the terms are confusing, partly because they are so inter-related, so, I thought this would make a useful blog. Here’s my take on the meanings of these terms. I hope that this provides clarification for you. First, electronic commerce (e-commerce) is a very common term that refers to the exchange of information via electronic media such as the Internet and private communication networks. There are two types of e-commerce: Business-to-Consumer (B2C) e-commerce – this is the term that most people are think of when e-commerce is mentioned. Every day, we experience B2C e-commerce, whether it is booking airline tickets and hotel reservations or buying books, shoes and clothes online. Business-to-Business (B2B) e-commerce – as its name implies, B2B e-commerce is the electronic exchange of information between two businesses, rather than between a consumer and a business. Electronic data interchange (EDI) is the most commonly used B2B e-commerce technology today. It is the computer-to-computer exchange of business documents, such as purchase orders and invoices, in a standard electronic format between business partners. You can use standards such as ANSI X12, EDIFACT, or an XML-based standard such as RosettaNet in the high tech industry. EDI has been in use across many industries, including retail, banking, manufacturing, high-tech and services, since the 1980s and it remains a game-changer. In order to achieve the benefits of EDI, the businesses involved must aim to be as tightly integrated as possible with each other. Twenty first century corporations expect a network of business partners – their suppliers, their customers, their logistics providers, their banks – to function online. There are two types of B2B Integration: (1) Integration at the data level –automation of the exchange of business documents between business applications, such as automating the exchange of all the documents in the procure-to-pay process. (2) Integration at the people level – enabling B2B collaboration between the people in different companies during business processes such as dispute resolution and new vendor registration. INTEGRATION AT THE DATA LEVEL For two businesses to tightly integrate at the data level, they need to automate the following tasks: Connect electronically – usually via the internet using a secure communications protocol, such as AS2, SFTP, or FTPS Exchange data electronically in a format that can be understood by the computer systems at each company – usually via an EDI standard format, which can be immediately understood Translate the EDI data to the format of each company’s in-house system – typically accomplished by using special EDI translator software INTEGRATION AT THE PEOPLE LEVEL – COLLABORATION For two businesses to tightly integrate at the people level, and truly collaborate to resolve issues or plan new initiatives, they need a central repository of critical information about business partners, such as details related to e-commerce readiness, regulatory compliance, consumer product safety, supplier diversity programs and environmental responsibility surveys. Furthermore, they need the information management tools to simply and easily: Enable business partners to maintain their own company and contact profiles, thus keeping partner information fresh and up-to-date Perform mass communications to appropriate segments of the trading partner base without relying on out-of-date spreadsheets on various employees’ computers Roll out compliance initiatives (e.g., send a 20-question survey to suppliers regarding the greenhouse gas initiative) to all or a subset of your partner community Audit business partners’ compliance with various initiatives Capture, share, and collaborate on performance-related data that helps to rapidly resolve multi-party disputes and discrepancies with full traceability and audit control. For example, this can result in improvements like a reduction of over-payments resulting from unprocessed or poorly negotiated shipping, pricing or claims disputes These data-level and people-level B2B integration tasks can be accomplished via 3 different approaches: 1. a “Do-It-Yourself” approach, in which you are responsible for purchasing and maintaining all of the connections and software systems that address both types of integration 2. a “Managed Services” approach, in which you outsource the responsibility for all the B2B integration tasks 3. a combination of both 1 and 2. If you’d like to learn more about why B2B Integration is becoming increasingly complex and what you can do about it, I recommend that you watch this Gartner webinar, “Roadmap for Improving Your Integration Strategy, the 7 Things You Must Know (and Do) About Integration”.

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Create data without data entry? Is that even possible?

In any typical trading community profile – where there’s a mix of large, medium and small trading partners – the 80/ 20 rule usually applies. 80% of the business is conducted with 20% of the trading partners. These trading partners are typically those that have already adopted electronic commerce and trading is usually done via EDI, XML or other standardized messages. The remaining 80% of the trading community typically accounts for 20% of the transactions. These trading partners are usually smaller suppliers and customers who may lack the budget, resources or expertise to exchange EDI, XML or other standardized messages and so they often send purchase orders and invoices via fax or email. But manual fax and paper handling, and re-keying of data, create inadvertent but costly data errors. And it is expensive to have staff spend time printing, re-keying and manually tracking documents. For the smaller companies who aren’t ready to adopt an EDI solution it is difficult to know what to do. What if you could use document and character recognition capabilities to turn those inbound fax and email business documents into machine-readable data? That is what a Fax to EDI service does. A Fax to EDI service can receive your fax in a cloud solution as an image and then use leading edge recognition technologies to convert the image to data in the format you need. A great way to automate smaller suppliers and customers with ease, effectively Want to learn more? Register for our on-demand webinar, “Creating Data without the Data Entry with OpenText Fax to EDI” today.

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Growth Hacking Business Networks – Old School Techniques

The concept of growth hacking is a relatively simple one. I define it as a strategy to build features into your product (or customer experience) that creates exponential, viral growth. In other words, companies “hack” the revenue curve by overcoming the obstacles that businesses usually confront when attempting to accelerate growth. Experts credit the rapid rise of companies such as Hotmail, Dropbox, AirBnB, Facebook, Instagram, Twitter, LinkedIn and Pinterest to the effective use of growth strategies. These startups leveraged email marketing, viral strategies and gamification techniques to build “blue ocean” markets or disrupt existing segments in periods of months versus decades (as might be expected). For example, Hotmail grew virally by putting an advertisement at the bottom of every email it sent. Zynga’s game popularity grew exponentially because users could only advance if they invited their Facebook friends to play along with them. Many of the best examples of growth hacking are found in social networks, which begs the question – Can business networks be hacked? The answer is – Yes! In fact, business networks have been using growth hacking techniques for 20 years – long before email marketing and even the Internet became popular. Let’s review a few “old school” growth hacking techniques implemented by some of the early B2B providers and Managed File Transfer software vendors. Proprietary MFT Protocols – The standard version of FTP does not offer capabilities such as compression, encryption or checkpoint/restart. To gain these types of capabilities, an IT organization much purchase a Managed File Transfer (MFT) software package. However, these MFT vendors have historically built features such as encryption and checkpoint/restart using their own proprietary model. As a result, these additional features only work with two business partners are both using the same MFT software. Being a sales representative at an MFT vendor can be much like winning the lottery if you can land the right accounts. Suppose for example you sell an MFT package to a large financial institution (e.g. Citigroup, HSBC, Deutsche Bank, JPMorganChase). The bank would then require that all 500 of its business partners purchase the same MFT package so that they can securely exchange large files with one another. If you can sell a MFT software package for $20,000-$50,000 to a few of these banks (who will mandate their business partners use it as well) you can quickly build a $10M business in just a few years. Proprietary MFT software has become less popular in recent years. It does not take long for an IT organization to realize how locked in to a specific MFT software package they become once their business partners make the investment to use it as well. And to sweeten the deal MFT vendors hike up the annual maintenance fees required to use the software every few years. You might compare this to the lock-in that Facebook has been able to achieve. Most people have built a network of friends, family and co-workers on Facebook that cannot be easily replicated elsewhere. Despite Facebook’s more invasive analytics and personalized advertising techniques, most people continue to use it because it is too challenging to get their friends to switch networks. Interoperability Agreements – Another way to growth hack a business network is for a small network (e.g. 1000 businesses connected) to get an interoperability agreement with a larger, established network (e.g. 1,000,000 businesses connected). These types of interoperability agreements allow for the free exchange of traffic between businesses on either network. If you get can get one it is a huge win for a smaller network! One of the key decision criteria used to select a business network is the number of participants. With interoperability agreements, smaller networks can hack the network effect and exponentially increase the size of their networks in a matter of a few months. For example, suppose a small network with 1000 connected businesses signed an agreement to interoperate with a much larger network of 1,000,000 participants. The smaller network can now advertise to its customers that it offers access to 1000 + 1,000,000 businesses. These type of interoperability agreements have become much harder to obtain over the past ten years. Primarily because the larger networks see a lopsided value equation. The smaller networks benefit from the network effects of the larger community without incurring any of the operational costs. The notable exception is the European e-invoicing provider community which is relatively new and still learning the opportunities and challenges with interoperability. A number of social network companies have used similar techniques to hack their growth. AirBnB figured out a way to automatically post listings on Craigslist giving it much broader distribution for its ads with zero incremental costs. PayPal piggybacked on eBay’s worldwide community to jumpstart adoption of its peer-to-peer payments services. And Zynga used similar techniques with Facebook to build a raving fan base of casual gamers.

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How you get error-free EDI documents that comply with your company’s business rules

EDI has been successfully adopted as the means to automate the exchange of business data, but this data can, of course, contain errors, such as incorrect order numbers, bad zip/postal codes, bad dates, etc. Also, some of your business partners may not be following your process rules, such as the timeframe within which an Advance Ship Notice must be sent. You need a system that can identify and fix these problems. Best-in-class companies solve the bad-data and process violation problem with “B2B operational intelligence,” which monitors EDI transactions as they flow through the trading network before they enter your back-office systems. B2B operational intelligence acts as a firewall that protects your internal systems, identifying bad data and then rejecting or quarantining it in-transit. It also provides visibility into potential problems, mechanisms to contain them, and alerting capabilities to notify those who can resolve the problems fastest. This in-transit processing performs all the value-matching and rule validations on each EDI transaction. Documents with missing or incorrect values are automatically set aside to be evaluated prior to processing by internal systems. This ability to react immediately to business anomalies prevents major issues resulting from bad data, and it helps make your company truly agile.     If you don’t have a B2B operational intelligence solution, I’d say this should be top of your shopping list in 2014 because, as Gartner noted in a recent webinar, it “delivers the most direct integration ROI to the business” This is because it enables you to improve your business processes, and thus reduces your costs and/or improves revenues. B2B Operational Intelligence vs. Business Intelligence A lot of people ask me about this, so here is my take on it. Some business managers believe that their bad-data risk is mitigated by their ERP and/or translator. While it is true that ERP systems are designed to catch certain data problems, they can only act on errors once they have entered the system. Clearly, too late! Also, many ERP systems and translators do not have the rigorous monitoring capabilities needed to eliminate data errors that are introduced from external sources, including business partners. So, how is B2B operational intelligence different from Business Intelligence (BI) tools. The core difference is when the “intelligence” is available. Business intelligence solutions find problems after they occur, while B2B operational intelligence solutions detect problems and provide actionable information before internal processing begins, enabling proactive resolution of issues. B2B operational intelligence acts as the front line, enabling your internal systems to operate more efficiently. Elements of an Effective B2B Operational Intelligence Solution If, as a result of reading this far, you have a B2B operational solution on your shopping list, here is my checklist of the key elements a solution should provide: Seamless operation with supply chain processes Integration support for any structured data, including EDI, XML, CSV, or flat files Flexible business rules configuration that is powerful enough to handle even the most complex, company-specific rules and vendor compliance scenarios Scalable architecture that performs at the speed of your business An easy-to-use interface that requires minimal training for line-of-business managers, enabling self-service and reducing the number of requests to IT Role-specific visibility for your employees and business partners into operations and critical real-time events with actionable information, enabling timely decision-making Scorecard capability that provides visibility into supplier performance and which, when coupled with easily accessible detailed performance data, enables productive performance improvement discussions with suppliers Ability to create issue resolution workflows and alerts tailored to your specific business processes B2B operational intelligence is a key factor in any successful B2B program..” Click here to watch a recent Gartner webinar, “Roadmap for Improving Your Integration Strategy, the 7 Things You Must Know (and Do) About Integration”, to learn more about B2B operational intelligence and other key factors in your EDI program.

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What is the Relationship Between EDI and XML?

EDI

Any methodology that enables the computer-to-computer exchange of business documents falls under the heading of Electronic Data Interchange (EDI). There are two basic approaches to EDI, outlined below. The first approach is to create business documents that adhere to one of the EDI standards such as ANSI X12, which is primarily used in the United States, or EDIFACT, which is used in the rest of the world. These standards define exactly where each piece of data is to be located in the electronic business document. The second approach enables the creation of electronic business documents in a more flexible way, one that is not bound by the strict rules of data location. The XML language is designed to provide such flexibility. XML is not a standard at all. It is a powerful language that gives a company a great deal of flexibility in defining and constructing documents, such as the types of business documents defined by ANSI and EDIFACT (e.g., purchase orders, invoices, remittance advices). For example, RosettaNet is a standard that uses the XML language. It was developed by a consortium of major computer, consumer electronics, semi-conductor manufacturers, and telecommunication and logistics companies. It facilitates some industry-wide global supply chain processes. Also, within an enterprise, XML is heavily used for sharing data among various system components. Moreover, internal system integration software is often designed based on XML. There’s a major structural difference between an EDI standards-based business document and one that is constructed using XML. The ANSI or EDIFACT document is based upon strict rules governing the position of data within a file, whereas the data in an XML file is not bound to a specific location but is instead identified by tags, such as “<quantity>300 </quantity>” to indicate a quantity value of 300. These tags result in XML files being much larger than their comparable ANSI or EDIFACT files. However, these tags also tend to make an XML-based business document more readable because the tag identifies the type of information that follows. This readability feature comes in handy for troubleshooting when human intervention is necessary. At one point, it was forecast that XML would replace EDI. However, many businesses that have invested in EDI have found that it is efficient and works well, so they see no need to spend the money to reinvent this particular wheel. Thus, EDI remains a mainstay for business and I don’t see that changing much in the foreseeable future. For more information about EDI and XML, you can download tutorials on ANSI, EDIFACT and XML here.  You can also read here about the different EDI document standards, what they are and what they mean.

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What Happens When Tesco Says ‘Let’s go’?

EDI

So, you come up with a great idea for a business and you talk to the UK’s leading retailer, Tesco, about it. They love your idea, and immediately place two large orders. Now what? Two Fingers Brewing Company discovered that they were in this exact situation and so needed an immediate crash course in how to do EDI/electronic commerce. The first thing of note is that Two Fingers Brewing Co. is no ordinary brewer. It was set up by a group of seven creative types from London marketing agencies whose only previous experience of the brewing process was at the product sampling end of the supply chain. They may not have known much about brewing but they all knew how to create and build a strong brand. Not just any brand though, this was a brand with a real purpose. All profits from the sale of Two Fingers beer go to help fight prostate cancer. Co. Founder Matt Sadler explains: “The seven of us became aware of prostate cancer through friends and family. The figures are frightening, one in eight men in the UK contract the disease. We wanted to do something to help and establishing a beer brand seemed a great way to extend the reach of our fund-raising. We could appeal to a wide cross-section of people throughout the UK.” The company’s first beer had an eye on broad-based appeal. Two Fingers chose to create a Golden Ale – a type of ale developed to appeal to younger lager drinkers as well as the traditional beer aficionado. The team selected a small local brewery to create Aurelio, its first craft beer. After two years of development – and several enjoyable tasting sessions – the beer was ready to be marketed. Tesco was the company’s first target. As the UK’s largest supermarket chain, Tesco offered the beer a national retail channel and access to a large potential market. The team arranged a meeting with the buyer from Tesco. Matt Sadler recalls: “The meeting went better than we could ever have expected. We would have been happy with a little initial interest and some positive feedback. But, the buyer absolutely loved the concept and the beer. She felt it was exactly the type of thing that Tesco wanted to be involved with and we received two major orders for Aurelio as a result.” Everyone was extremely happy but then something a little worrying happened. Two Fingers received all of the documentation that a new supplier needs to complete to become a trading partner with Tesco. Chief amongst these was the EDI information that Tesco required so that Two Fingers could receive orders electronically. This was unexpected for Matt: “We had worked out our product development and supply chain processes but, to be honest, when it came to electronic commerce we didn’t know our ASN from our EDI. What exactly was an ANA number? A quick session on Google found a useful website, www.edibasics.co.uk and we realised that we were going to need help. Our research showed us that there was one real expert company in this field, and so I contacted them. The moment my phone call was answered, I knew we were in safe hands. From the first person I spoke with to everyone I’ve worked with subsequently, nothing has been too much trouble. The truth is that Two Fingers aren’t just a small business, we’re a small business without much money to spend. Yet, I feel that this has never mattered to OpenText | GXS. Throughout we have always felt that we are getting the same level of attention, assistance and support that bigger customers receive.” The first decision was which EDI solution would be best. It had to be simple, easy-to-use and have the required functionality to trade with Tesco initially, but also flexible enough to accommodate other retailers in the near future. With advice, Two Fingers selected Freeway Entry. The entire process of installing the software, setting up the system, testing to ensure it worked effectively and training the Two Fingers team was completed in less than a week. “Initially, Tesco gave us quite tight deadlines to begin delivery of Aurelio. OpenText | GXS worked very closely with Tesco and us to ensure we could meet the deadline. It wasn’t just the excellent technical work, it was the endless patience and help to answer our many questions. OpenText | GXS took something that looked daunting and complex and made it easy and straightforward for us”, Matt commented. Two Fingers is working with leading craft beer specialists, Hepworth & Co, for the rollout of its beers as well as building a highly experienced and effective supply chain that includes industry leaders such as Marston’s and CUBE. OpenText | GXS ensures that Two Fingers receives its orders from Tesco in a timely manner and can invoice the supermarket automatically. “It’s as simple as going into my mailbox and downloading the order. The system raises and despatches the invoice and we send the order off to be delivered to the Tesco distribution centres. We know that we can quickly and easily replicate this process as we sign deals with more retailers. OpenText | GXS has close relationships with all of the UK retailers, so we are confident that we have an EDI solution that supports our company to grow efficiently. The result is that we can make more sales and more of our profits can go to Prostate Cancer UK,” says Sadler. Aurelio, the first beer from Two Fingers, was officially launched in January 2014 and, with one retail deal in the bag, the company is currently looking to increase its exposure in both the on and off trade. More beers are in the pipeline and the team believes that it has a B2B ecommerce platform in place to support its business expansion plans. However successful the company is, one thing is certain: when people say drink responsibly, beer lovers need look no further than Two Fingers Brewing Co.

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How the Internet of Things will Provide ‘Fuel’ for Future Digital Supply Chains

In an earlier blog post I described how future business environments will be more tightly integrated with information flowing from EIM, B2B and IoT based platforms. I outlined how information can be broadly split into structured and unstructured information flows and for this blog entry I just wanted to expand on some of those initial thoughts. EIM, B2B and IoT will collectively provide ‘fuel’ or information for tomorrow’s digital supply chains. Over the past few weeks OpenText has been running a series of events as part of a global Innovation Tour, visiting major cities around the world, to share our vision for the future of Enterprise Information Management. We are using this tour as a platform to introduce our 2020 agenda and managing internal and external enterprise information flows across future digital supply chains will be a core part of this agenda. In parallel with these events, OpenText |GXS hosted our Customer Forum in Washington last week and I was given the opportunity to present my vision of where the manufacturing industry was heading in the future. Tomorrow’s manufacturing industry is going to need to embrace many new and ‘disruptive’ technologies and processes that are just starting to enter the market today. From wearable devices such as Google Glass, 3D Printers, Drone Based Logistics Networks and of course the Internet of Things. Future supply chains will need to embrace these technologies and EIM and B2B platforms will need to process data coming from these devices as part of the overall information flows across a digital supply chain. During my ‘Manufacturing 2020’ presentation I discussed each of these technologies in more detail and provided some real world examples of their applications. It has only been a few weeks since I posted my last blog introducing EIM, B2B and IoT and even during this short period of time the IoT world has moved on and technology has progressed. For example only this week Cisco announced a $1Billion investment to expand their cloud infrastructure which will be used to support the connection of billions of IoT related devices. Cisco’s cloud is being designed from the ground up to support IoT, capable of scaling to billions of connections and trillions of events all supporting real time analytics to help customers get the insights they need from the connections of people, processes, data and things as they happen in real time. At an SAP conference in New York yesterday Cisco and SAP painted their vision for the Internet of Things, especially in relation to manufacturing environments of the future. Cisco estimates that improvements to plant automation processes and improved production output from IoT is a potential $2Trillion opportunity over the next ten years. The chart above, courtesy of Cisco, highlights the potential opportunity of IoT in manufacturing. Building a dedicated IoT platform, processing the data coming off of this infrastructure in an in memory database such as SAP HANA is only part of the story. Providing connectivity to a B2B network which can then take actionable decisions and initiate supply chain processes is the next logical step in the evolution of a company’s IoT related digital supply chain strategy. Dedicated APIs will need to be developed to connect Cisco’s proposed network to a B2B network such as OpenText |GXS’s Trading Grid, the world’s largest cloud based integration platform which processes 16billion transactions per year. The API is a critical cornerstone of developing a completely closed loop IoT connected digital supply chain infrastructure. So what exactly will these closed loop, IoT focused business processes look like and how will they help to enable digital supply chains of the future. In the immediate future there are three key areas where IoT can fuel the digital supply chain, namely offering pervasive visibility, proactive replenishment and predictive maintenance. Let me now expand on these with a few real world examples that I have learnt about in recent weeks. Pervasive Visibility – Bosch is currently developing a software based virtual supply chain. The environment will take the output from various RFID and other sensors located across both their factories and their 3PL providers and this will provide a complete end to end view of shipments as they move from point of manufacture to point of delivery. RFID technology has been around for many years but I wonder if the IoT will provide the platform for RFID technology to prosper? Part of the problem that has restricted the growth in RFID adoption has been the lack of a truly global RFID reader infrastructure. The IoT, with billions of connected devices could potentially change this. Proactive Replenishment – Last October at Cisco’s Internet of Things World Forum in Barcelona, SAP demonstrated a HANA powered vending machine. Not only could the vending machine recognise a customer using the machine and make suggestions for their next purchase, but it could also potentially highlight out of stock situations with the machine which would lead to new stock needing to be ordered. Information on every sale from the vending machine would be stored in an instance of SAP HANA allowing a supplier to monitor consumer buying patterns and trends across a network of internet connected vending machines. This is a very simple example but in the context of a manufacturer this could be applied to aftermarket parts replenishment or monitoring stocks in a warehouse that are used as part of a production process. Predictive Maintenance – I think this area is very interesting as it could potentially tie in with the other trend of the moment, namely 3D printing. Take the following scenario, an aircraft is about to experience a problem with a bracket failure in one of its wing flap mechanisms. The bracket is going to fail due to a hairline crack developing in one arm of the bracket. The original bracket is shown to the left. What if a strain gauge fitted to the bracket actually detected the crack developing, this information would be transmitted to the destination airport that the aircraft is flying to and a new 3D printed part is manufactured in the maintenance hangar and once heat treated could be fitted to the aircraft when it lands. This is a great example of what I would term a ‘zero length supply chain’. A part has been manufactured there and then with no logistics infrastructure required at all to deliver the part. This would save airlines a significant amount of money, especially in relation to downtime required to normally wait for a part to be shipped to a maintenance hangar which could be located anywhere in the world. Now imagine a similar process happening to repair a car, a military vehicle or any serviceable ‘asset’ that needs to be maintained to a high level in order to maximise the up time of the asset concerned. I have provided three examples above to illustrate where IoT could potentially fuel a digital supply chain. The RFID example could be integrated with an B2B Advanced Ship Notice (ASN) process to notify customers of an inbound delivery. Rather than customers being told that their shipment may be delivered within a 30 minute window, the network of interconnected RFID sensors and readers will paint a real time view of the shipment as it makes its journey from the factory to the point of delivery. As the parts are delivered, inventory levels can be automatically adjusted and the associated invoicing process could be set in motion. The vending machine example would see an automated order being placed with a supplier when the stocks in the machine get too low and the delivery of goods to the machine could be monitored as well. As for the maintenance example, there will inevitably be parts that cannot be 3D printed and therefore either an automated process could be put in place to order new parts or a web portal front end to an online catalogue of replacement parts could be setup. In fact if parts have to be replaced after so many flying hours then maintenance crews could have access to an online catalogue of 3D printable parts, they would simply select and then download the replacement part that they need, as a 3D CAD model, and then print locally on a 3D printer in the maintenance hangar. These three processes nicely demonstrate how B2B plays a key part of the whole closed loop process relating to future digital supply chains and in fact these processes are in some cases reliant on each other to operate efficiently. Both replenishment and maintenance scenarios will require visibility, especially when ordering non-3D printable parts such as air filters for example. In some cases maintenance crews will need to make sure they have a ready supply of spare parts so that an aircraft can be repaired as soon as it lands. Being able to automatically replenish spare part related inventories will be key to ensuring that maintenance processes can be undertaken smoothly. Once again I have only scratched the surface in relation to how IoT will impact digital supply chains of the future and I will look at other areas in future blog posts.

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EDI Hard Facts #6: How Advance Ship Notices and Purchase Order Acknowledgments Improve Supply Chain Performance

The vast majority of respondents in Supply Chain Insights’ recent study “EDI: Workhorse of the Value Chain” said that the most important EDI documents for improving supply chain performance are the Advance Ship Notice (85%) and the Purchase Order Acknowledgment (84%). Why would that be? Well, these two documents provide buyers and suppliers with visibility into order status without having to pick up the phone or send an email, and this improves efficiency in their supply chain. Now, here’s how these two documents fit into the EDI ordering process and why they provide major benefits in the supply chain process. The buyer sends an EDI Purchase Order to the supplier. The supplier can then send a Purchase Order Acknowledgment back to the buyer, in which the supplier agrees to fulfill the order according to the terms of the purchase order. If the supplier is unable to meet all the purchase order requirements, the Purchase Order Acknowledgment can provide information as to which portions of the order can be fulfilled. The buyer can then transmit a Purchase Order Change document when there is a need to change the original purchase order, due to a change in the buyer’s needs or because the supplier cannot meet all the requirements in the original purchase order. The supplier then sends a Purchase Order Change Acknowledgment back to the buyer. Use of the Purchase Order Change and Purchase Order Change Acknowledgement documents simplifies a process that otherwise, when handled manually, is very complex. In fact, in some industry sectors, like general merchandising, a purchase order is often changed four or more times. Automating the exchange of purchase order-related documents provides numerous benefits to companies: Faster, more accurate order-to-receipt process due to the elimination of slow, error-prone manual ordering; Reduction or elimination of resource-intensive and time-consuming order status inquiries by both buyer and seller due to the use of EDI status documents that provide you with new visibility into your supply chain; Increased buyer flexibility due to the speed and accuracy of the EDI process. For example, the buyer can quickly seek alternative suppliers when a purchase order cannot be fulfilled; Higher levels of satisfaction by the seller, the buyer, and the buyer’s customers resulting from the benefits above. The critical document in support of all shipping processes is the Advance Ship Notice (ASN), which lists the details of a shipment of goods due to arrive from a supplier, a third party logistics provider (3PL), or a fulfillment agent. Typically, the ASN includes much of the information that was included on the buyer’s original purchase order. It also includes carton identifications, content descriptions, and transportation details. New uses are continually found for the ASN. For example, some companies use data in the ASN to help them generate the Customs 10+2 Importer Security Filing for international shipments entering the United States. The ASN often works together with the barcoded shipping label that suppliers affix to the carton/pallet/boxes being shipped. The identifying numeric characters of the barcode are also included in the ASN document, which can be read into the buyer’s warehouse management system (WMS). When a shipment arrives, receiving personnel scan the barcode affixed to the pallet of goods. The barcode is then automatically matched against the records in the warehouse management system to verify shipment accuracy. As a result, inventory levels are updated and warehouse personnel are notified where to forward the received goods. The ASN document is at the core of many automated business processes, such as Evaluated Receipt Settlement; Drop-Shipping, and Cross-Docking. Using EDI in the shipping and receiving processes enables both the supplying and receiving companies to compete in a business environment in which efficient delivery of goods to the right place at the right time, all of which is critical for success. This is my last blog on the findings from Supply Chain Insights’ report. If you’d like to learn more, you can get your copy of the full report here. You can also watch this 30-minute webinar with industry analyst and founder of Supply Chain Insights, Lora Cecere, who discusses the key findings and takeaways from the study.

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EDI Hard Facts #5: How EDI Improves Supply Chain Visibility

82% of respondents in Supply Chain Insights’ new study “EDI: Workhorse of the Value Chain” indicated that one of the major improvements resulting from their EDI programs was better or much better visibility of orders and shipments in the supply chain. It’s easy to understand why the visibility benefit was one of the top four. After all, in today’s fast-paced business environment, having real-time insight into transaction status is the key to enabling faster decision-making and improved responsiveness to changing customer and market demands. Businesses need to know answers to questions such as: “Was my order accepted?” “Which version of the order are you shipping against?” “Will the order ship on time?” “What is the status of my invoice?” EDI transactions enable that vital level of real-time visibility into status of orders in the supply chain. For example, using EDI, a manufacturer in Detroit, Michigan can send a purchase order to its supplier in Japan, receive an electronic document that the item is out-of-stock, and immediately react by sending the purchase order to an alternative supplier in Brazil – all in just minutes. Armed with this information businesses can effectively manage bottlenecks, plan for delays, and proactively manage customer expectations. In short, they can resolve issues before they have a negative impact on business performance. Here are just a few of the EDI documents that enable visibility into the supply chain: Purchase Order Acknowledgment: Confirmation to the buyer that the supplier will be filling the purchase order as requested. Advance Ship Notice: An electronic version of a printed packing slip that tells a buyer that goods have been shipped, how they have been packed and the estimated arrival time. This document is also referred to as a Delivery Notice or Dispatch Advice. This extremely important document is at the core of many automated business processes, such as Evaluated Receipt Settlement; Drop-Shipping, and Cross-Docking. Remittance Advice: A notification from a buyer to a supplier when payment has been made, usually via electronic funds transfer. Receipt of this document enables suppliers to reconcile which invoices have been satisfied for any given payment. Transportation Carrier Shipment Status Message: A notification by the carrier to the shipper or receiver regarding the status of a shipment. It can include the estimated date and time of arrival, destination point, reasons for delays, and so on. In summary, EDI provides the foundational technology that, when combined with other collaborative commerce capabilities available today, enables dramatic strategic benefits.   In my next blog, I will continue to share additional statistics from Supply Chain Insights’ report with you. In the meantime, if you would like to read the entire report, you can get your copy here. You can also watch this 30-minute webinar with industry analyst and founder of Supply Chain Insights, Lora Cecere, who discusses the key findings and takeaways from the study.

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EDI Hard Facts #4: How EDI Improves Business Partner Relationships

One of the questions asked in Supply Chain Insights’ recent study “EDI: Workhorse of the Value Chain” was: “How has your EDI/XML technology made each of the following components of your supply chain better or worse?” For 85% of the respondents, the top improvement from EDI was better/ much better business partner relationships. Here are some reasons why I think the exchange of EDI documents improves relationships: Better Relationships with Customers For many companies today, EDI is a prerequisite for doing business. So, when you can answer “yes” to your customers’ EDI requests you have a greater likelihood of starting and maintaining a positive business relationship: “Yes, of course we can receive your Purchases Orders (PO) via EDI.” “Yes, we will send you Advance Ship Notices (ASNs) so you will know exactly when your orders will arrive and what is included in our shipments.” “Yes, we will use barcode labels on our shipments so you can scan our shipments upon arrival and achieve greater productivity in your warehouses and distribution centers. Answering positively to such requests means your company is seen to be easy to do business with. That frequently results in receiving more orders from the same customers. That in turn translates into higher revenues. Furthermore, once you have developed your EDI capabilities you then have a competitive edge that you can proactively use as a differentiating service feature during the sales process with new prospects and other customers, both locally and internationally. This means that your sales team will be happy because they don’t have to worry about whether they can accept a new customer order or not. (Watch this video case study to hear Harper Collins describe how EDI has enabled them to accept new customer orders without fear.) Better Relationships with Suppliers EDI helps you to improve relationships with your suppliers in many ways. Here are a few examples: By exchanging business documents electronically, you have the opportunity to gain visibility into the entire ordering process. That visibility enables you to track supplier performance across your key metrics (such as complete shipments, timeliness of advance ship notices, and frequency of back-orders). That visibility in turn enables you to identify trouble spots. Armed with that information, you can either remove poor-performing suppliers from your supplier community, or, for strategic suppliers, work with them to improve their performance. One of the first questions suppliers want to have answered once they’ve sent you an invoice is: “Have you paid my invoice”? Armed with an EDI Purchase Order and Invoice, you can virtually eliminate those calls into your accounting department by posting the latest payment status on a supplier portal, enabling suppliers to access the information directly. That’s a win-win for all involved as it improves productivity and saves time for both the buying and the supplier companies. Companies can adopt the Evaluated Receipt Settlement (ERS) process with their high-volume, trusted suppliers. With this process the customer pays for a shipment of goods based on goods received and the pricing in the original purchase order – no invoice is needed at all! (Learn more about ERS here.) ERS results in more timely communication of data between trading partners and often generates other economic values for both partners. But, it can only be done if the Purchase Order (PO) and Advance Ship Notice (ASN) documents are exchanged via EDI! In my next blog, I will continue to share statistics from Supply Chain Insights’ report with you. In the meantime, if you would like to read the entire report, you can get your copy here. You can also watch this 30-minute webinar with industry analyst and founder of Supply Chain Insights, Lora Cecere, who discusses the key findings and takeaways from the study.

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Do You Need a Genius Bar for B2B Integration?

Many of the leading cloud computing providers deliberately avoid talking with their customers. When inquiries come in, they push them back to online resources. Haven’t you read our API specification (it is 200 pages long)? Have you posted the question to our online community (maybe someone will know the answer)? Have you visited our app store (you might get lucky)? Strange as it might seem, not talking to your customers is viewed as the best way to grow your business profitably. But is this the best approach for cloud-based B2B integration platforms? The answer is both “Yes” and “No.” In recent years a number of Integration Platform-as-a-Service (PaaS) vendors have emerged in the market. These iPaaS vendors follow a similar strategy to cloud providers such as Google, Facebook and Amazon Web Services. iPaaS providers develop user interfaces that are highly intuitive and can be learned within minutes. Extensive wikis and robust API suites are published with a goal of making users self-sufficient. Some iPaaS vendors even offer libraries of maps, forms and connectors to popular applications, which can be self-provisioned in a matter of minutes. Apple’s Genius Bar What you will not find most iPaaS vendors offering is high-touch customer service models or service delivery teams that can be scaled up and down to support projects. And that is just fine to most of the types of companies who prefer to use an iPaaS. The user demographic that iPaaS appeals to are self-starters. They have 10, 20 or 30 years of EDI/XML experience under their belt. These Do-It-Yourselfers don’t want a high-touch model. But what if you don’t have 10, 20 or 30 years of experience with B2B integration? What if you don’t know how to get data in and out of SAP using XI APIs? What if you don’t know how to publish item attributes to Walmart using the 1WorldSync data pool? What if you don’t know how to use the RosettaNet PIP for a design win? What if you don’t know how to aggregate end-of-day account statements from your international banks using SWIFT? What if you have never used the EBICS protocol to issue payments in France? What if you have never connected to manufacturers in Japan using Zengin or HULTF? What if you are not familiar with the electronic customs regulations for importing goods to India? What if you are not familiar with the policies for issuing electronic invoices in Mexico? If any or all of these scenarios apply to you then a self-service iPaaS model is not the way to go. Not all cloud-based integration providers take the iPaaS approach to the customer experience. Some provide a model more like Apple’s Genius Bar. When you encounter a hardware or software problem with your Mac, tablet or phone you can talk to a real person at the Genius Bar about how to solve it. Many companies don’t have the expertise in-house to master the hundreds of different networking protocols, messaging standards and ecommerce regulations that exist around the globe. For these organizations, having a real person (not a wiki or API spec) they can contact is essential to meeting the integration requirements of their customers. When you need to “Map an SAP IDOC to a VDA 4938 for an automotive OEM in Turkey” you have a team of experts that will hold your hand through the process. You need a Genius Bar for B2B integration!

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Adoption of Cloud B2B Services Continues to Grow in Japan

It has been 18 months since I first discussed how Japanese companies were taking a keen interest in moving to cloud based B2B services. In that particular blog entry I highlighted five reasons why Japanese companies were considering a move to cloud based B2B platforms. I wanted to take the opportunity to revisit each of these reasons and update according to some of the industry trends that I have been seeing over the past 18 months. I also wanted to provide some personal insights from my recent trips to Japan. As you will see it certainly provides some validation in terms of my original findings relating to cloud B2B adoption across Japanese companies. Reason 1. Introduce Flexibility: Japanese manufacturers need to scale production as seamlessly as possible to ensure they can meet varying consumer and market demand levels. By moving a B2B environment to the cloud, it allows companies to build flexibility into their supply chain as required by the needs of the business and the cloud also offers a secure, ‘neutral’ environment into which key suppliers or business partners can be connected. Update – Over the past 18 months we have seen Japanese companies continue to rethink their production footprint around the world. There has been significant interest in setting up new plants in Brazil and Mexico to leverage low cost labour in these countries as well as use these locations as a springboard into the lucrative North American market. Mexico is one of the most important automotive manufacturing hubs in the world at the moment and that importance will grow further over the next few years. Nissan is certainly taking the lead in terms of trying to build a flexible production footprint, not just to service their production requirements but those of their partners Renault and Daimler as well. In fact over the last 18 months we have seen a number of new industry partnerships emerge, one of the most significant being Toyota and BMW who are working together to develop a new sports car. In addition I believe we will see a new round of investment in the so called MINT (Mexico, Indonesia, Nigeria, Turkey) countries, a new set of emerging markets that I discussed at length in an earlier blog entry. Considering the investment placed by Japanese companies in the existing BRIC countries I would expect Japanese companies to take the lead in investing in the MINT countries as well. It is interesting as I studied Flexible Manufacturing Systems when I was at University over twenty years ago but these systems were for use within the confines of a production plant. Now, these FMS environments need to work across multiple plants and connecting to a single, cloud based environment is key to the success of these production environments. In fact the analyst IDC coined the phrase the ‘Global Plant Floor’, a great description of what many manufacturers would like to achieve, today. Building flexible, scalable production environments should now be on the agenda of every manufacturer that has truly global aspirations. Reason 2. Implement Modernisation: Japanese manufacturers have relied on bespoke, behind the fire wall software solutions to manage their global production facilities. The cloud is going to drive a revolution in how IT environments are managed and maintained on an on-going basis and IT resources can be re-deployed on to other IT projects within the business. Update – Over the past 18 months I have had two trips to Japan, one trip focussing on the high tech companies and the second trip looking at automotive companies. On each trip it was interesting to see which companies were taking the bull by the horns so to speak and were proactively looking to upgrade their B2B platforms. Since I posted my last blog relating to Japan we have had many enquiries from Japanese companies wanting to move to a Managed Services environment. Interestingly most of these companies are in the high tech sector but in each case they wanted to move away from their legacy communications network and on to a single platform that would give them the future proof communications infrastructure that they need to compete on the global stage. It may be due to the shorter life of high tech consumer electronics products that makes it easier for these companies to identify a window where they can move to a new platform. In the automotive sector it is not so straight forward as cars will normally have a five year life cycle and it is not so easy to identify a suitable migration window to a new B2B platform without disrupting production in some shape or form. From an automotive perspective one B2B application that is likely to see rapid adoption over the next few years, based on some of the discussions I have had in recent months, are Managed File Transfer applications. The reason for this is that car manufacturers are de-centralising their design offices and hence they need the ability to exchange very large files between different locations. The increased trend for partnering with other vehicle manufacturers, for example BMW and Toyota, has also led to a need to be able to share design information. I would expect this trend to continue into the foreseeable future and cloud MFT based solutions will be perfect for this application. Reason 3. Initiate Consolidation: Japanese manufacturers have expanded their production facilities all over the world, building out extensive internal networks and deploying multiple B2B hubs. Cloud based B2B environments, such as GXS Trading Grid, are helping Japanese companies consolidate their global B2B hubs and networks and at the same time contribute some way towards future proofing their B2B platform. Update – As highlighted above, the pace of consolidation to a single B2B platform appears to be quicker across high tech rather than automotive companies. This could be due to the fact that production operations are generally outsourced across the high tech industry as they tend to utilise more contract manufacturers. So it is the contract manufacturers such as Foxconn and Flextronics that need to develop cloud based platforms to connect with their own suppliers. In fact over the past 18 months we have seen many more consumer electronics companies such as Sony outsource their manufacturing to an external provider and I think this trend will continue. In general we have seen more companies consolidate onto a Managed Services platform, either due to a lack of internal resource availability or a desire to route all transaction based traffic through a single provider. In addition to B2B networks, many Japanese manufacturers have built their business around home grown ERP platforms. However these ERP platforms are becoming expensive to maintain and with an increasing desire to embrace mobile, social and Big Data technologies, these companies will need to upgrade their ERP environments as well. ERP upgrades and ERP instance consolidation provides an ideal opportunity for considering B2B Managed Services. I believe we will see Japanese companies focus on both upgrading/consolidating their ERP and B2B environments moving forwards and this will be a good thing for all concerned, especially for vendors such as OpenText. Reason 4. Improve Collaboration: Japanese manufacturers are now embracing collaboration and co-opetition in order to respond to changing consumer and market demands. Therefore cloud environments utilising feature rich, web based applications that can be accessed anywhere across the business help to encourage collaboration between two or more partnering companies and their respective supply chains. In addition they offer companies improved predictability and visibility of long term costs associated with running cloud based B2B platforms. Update – As highlighted earlier, we have seen more and more examples of Japanese companies needing to work with their competitors in order to exploit new market sectors. This need to embrace co-opetition has forced Japanese companies to change the way they work, especially with western partners. Using a cloud B2B platform is ideal for companies who wish to work jointly on a project as they can use a hosted platform for just the length of their joint project without much risk to their respective back end IT environments. One thing I found during my trips to Japan was that more and more Japanese companies were becoming increasingly interested in how western companies were implementing and conducting B2B, for example what document standards were being used and how they connected to their trading partner communities. This demonstrated to me that a significant cultural shift was underway in terms of proactively wanting to learn about how companies were using B2B in other markets and how they could deploy similar cloud B2B platforms across their own operations. The mere fact that more Japanese companies were willing to use a cloud platform meant that they were also willing to work more collaboratively with trading partners around the world. I still believe that the Japanese Earthquake in 2011 was the catalyst for this urge to adopt new collaborative ways of working. Reason 5. Increase Resilience: Japanese manufacturers are having to build stronger resilience into their global operations in order to minimise future supply chain disruption. Cloud environments help to foster collaboration amongst trading partners around the world and more importantly helps to speed up communications out to a trading partner community during a time of crisis. Update – Increasing resilience to future supply chain disruptions has been one of the more important issues that Japanese supply chain directors have needed to address over the past 18 months. Dual sourcing of suppliers, mapping out supplier networks and identifying potential points of weakness in a supply chain have all been addressed from an operational point of view. From a data centre point of view, moving to a cloud based environment hosted by a third party provider helps to ensure that business related transactions and information flow across a state of the art data centre infrastructure. Even though Japanese companies have not had to test their back up and fail over processes in a major way since the 2011 earthquake, these companies are in a much better position today, from an increased resilience point of view, than they were before. The investment they have made in setting up new plants in different regions around the world will also help to protect against future supply chain disruption. Using a cloud B2B platform has provided the speed and flexibility to move production anywhere in the world.

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SWIFT Services Vendor Selection Checklist

More and more corporate treasury organizations are considering SWIFT services to route payment instructions or collect account statements from their banks around the world. But connecting to the SWIFT network can be daunting with the associated requirements for dedicated hardware and software, along with in-house SWIFT certified experts. Few corporates choose to host their SWIFT connectivity in-house, instead opting to use an outsourced SWIFT services solution. The best way to compare different SWIFT services providers is to compile a list of the technical capabilities, corporate to bank connectivity, SWIFT services operations, and implementation considerations that you require. Then, you can rank each provider according to how well it meets your needs. When choosing a vendor, don’t just consider whether the provider can meet your needs for today; be sure that your provider can meet your future requirements as your treasury management needs evolve. DOWNLOAD THE SWIFT SERVICES VENDOR CHECKLIST APP We’ve developed a new Checklist App to help you engage in more educated conversations with SWIFT vendors and evaluate the various SWIFT outsourcing options that best fit your business requirements. It includes features that we recommend you include in your vendor evaluation, including: TECHNICAL CAPABILITIES Supports your preferred communications protocols e.g. FTP, AS2, HTTPS, SFTP, etc. Performs vulnerability/penetration tests on networks and connectivity Regularly tests their Disaster Recovery and Business Continuity plans Meets your recovery point objective (RPO) and recovery time objectives (RTO) standards CORPORATE TO BANK CONNECTIVITY Supports direct, host-to-host bank connectivity to your cash management banks to save you SWIFT transaction fees Has experience integrating to various accounts payable, general ledger, and treasury management systems to improve straight through processing Can translate inbound and outbound files (e.g. bank statements, vendor payments, check images, etc.) into your preferred formats Provides visibility, monitoring and support services for all messages (SWIFT and non-SWIFT) SWIFT SERVICES OPERATIONS Does not require a PC or laptop with USB port to access the SWIFT Network and to release payments Handles all of the required SWIFT message types e.g. FIN, FileAct, MX (XML/SEPA) Licenses SWIFT’s Alliance Gateway and Hardware Security Modules (HSMs) to ensure SWIFTNet compliance Supports your choice of digital signature providers e.g. SWIFT 3SKey or IdenTrust Trust Link IMPLEMENTATION Provides experienced financial services implementation specialists Can meet your implementation timeframes Provides a designated project manager Has a proven, comprehensive implementation approach and project plan CUSTOMER SERVICE Has operations across your geographic footprint Offers 365/24/7 support as a standard offering Offers customer support in the languages required for your geographic footprint Meets your standards for problem resolution timeliness, quality and metrics These are just a few of the features and services you should consider before finalizing your checklist. Click here for an Excel-based SWIFT Services Vendor Evaluation Checklist you can download and use today!

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From Super Powers to Supply Chain Power 50, a Busy Week for B2B

So time for reflection, last week I attended the last ever GXS sales kick-off event in Washington DC. Last event I hear you say, well yes because in January GXS was acquired by OpenText. It was great to hear last week about what GXS had achieved as a business over the last few years and now we are all looking forward to being a part of the OpenText family. The theme of our event was Super Heroes/Powers and needless to say I had a few takeaways from the event as shown below. The combined power of OpenText and GXS will transform and bring together the Enterprise Information Management and B2B market sectors. Any likeness between the Superman statue shown below and myself, no matter how small, is purely coincidental This morning I was contacted by an organisation called Supply Chain Opz, they have recently pulled together a list of the top 50 supply chain related blogs. One of my recent blogs on how the Internet of Things will impact B2B and Supply Chain environments managed to get included within this list. There are hundreds of supply chain related blogs on the internet and Supply Chain Opz decided to pull together a definitive list of blogs from supply chain related industry thought leaders. Interestingly they use social media coverage as a key measure of the success of a blog, and this particular blog had the most shares and likes on our blog site, so there must be a huge interest in this emerging area. I have been blogging at GXS for nearly seven years now and I have found it to be a great way to do industry research and then present my own opinion on things. Moving forwards I will be blogging on behalf of OpenText so another chapter opens up in my blogging ‘career’, one that will discuss in more detail how companies and supply chains can leverage Enterprise Information Management and B2B integration platforms that our combined companies can now offer.

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Bringing it Altogether – EIM, B2B and IoT

This is my first blog writing for OpenText. OpenText I hear you say, have you changed companies?, well yes, GXS was acquired by OpenText on 16th January. Now you can read about the acquisition HERE and I don’t really need to cover this in any more detail but I am very positive for the future. Not just for myself in an industry marketing role across OpenText but for the companies that will be able to leverage the software and services from both organisations, it really does provide a strong value proposition for managing information across the entire extended enterprise. As part of my role at GXS over the last eight years I have been writing blogs around B2B integration and looking at the exchange of information from an external trading partner point of view. Now as part of the OpenText family we can help companies address their internal exchange and management of information as well. The traditional world of B2B has been focused on connecting external trading partners together via our Trading Grid platform, the world’s largest cloud based B2B integration environment. The trading partners are typically located across different industries, different regions and each has a different requirement from a document exchange and connectivity point of view. I have been working with manufacturing companies, from a vendor perspective, for over twenty years now and it has been interesting to understand how they structure their operations both internally and externally in order to compete on the global stage. In my former company PTC, a global provider of software based Product Lifecycle Management (PLM) solutions, there was a strong focus on data management and collaboration across internal departments. These departments needed to utilise 3D design based information in many different ways and the information was exchanged across the business depending on whether you were in design, production or the aftermarket service department. Much of the design related information is stored centrally in a design repository, which is typically accessed by a web portal type environment. These web based environments are crucial to supporting the continued globalisation of today’s manufacturing industry. So this covers the management of design based information but what about other types of information that could be flowing across a manufacturing business?, for example test reports, assembly procedures, product presentations, industry analysis reports, sales reports, compliance documents and other media such as video and audio files?  Welcome to the world of Enterprise Information Management (EIM), a world where ‘unstructured’ information is managed using a common platform to allow all stakeholders across the business to be able to access any type of information. Most manufacturers have setup ERP and database environments to manage different aspects of their information flows but once inside a database this information becomes ‘structured’. Even information contained within an Excel spreadsheet is considered structured in nature. From a B2B perspective EDI related documents could be considered as structured information because the documents are created using a specific EDI standard such as EDIFACT or ANSI and will contain a standard header describing the content of the EDI document. But what about a PDF document for example?, lots of textual information but unstructured in nature, in a similar way Powerpoint presentations have lots of information on each slide but it is not structured in any way. The management of unstructured information, especially information that lives outside of a traditional database needs to be managed and accessed more effectively. The high level diagram below illustrates a typical manufacturing company where ERP and PLM systems are central to design and manufacture of today’s goods. Another new IT term or TLA (Three Letter Acronym) is just starting to get on the agenda of global CIOs, namely the Internet of Things (IoT).  This is a subject that I discussed extensively in an earlier blog, HERE. In summary it is estimated by some analysts that over 200billion devices or machines will be connected to the internet by 2020, representing a market opportunity of potentially $14.4Trillion.  There are really three components to an IoT device, the sensor, the WiFi/Network connection and the on board processor to monitor all the information coming from the sensors on the machine.  Now it is interesting to note here that the term ‘Big Data’ started to be discussed two years before IoT went ‘mainstream’ in 2013. Many companies are still at the very early stages of learning about IoT, some are simply trying to work out which devices or ‘Things’ could be connected to a network. But with billions of devices connected to the internet and Petabytes of information being extracted from machines around the world, it presents an interesting challenge in terms of how this particular set of unstructured data will be managed. It also presents the ideal opportunity for companies to develop their own Big Data strategies as well. IoT information would for example be taken from connected utilities infrastructures, office equipment, production machinery and warehouse & logistics equipment. The information would typically contain for example proximity, temperature, performance or stress loading related information. All of this information needs to be captured and in some cases processed in real time, and in other cases archived in some form of storage server for downstream processing by other business systems.  Combined with the existing information that is flowing across the extended enterprise, what would a typical information management and exchange environment look like in the near future?  In my earlier IoT related blog I included a diagram of how the IoT could potentially connect with a B2B platform via a dedicated API, now with EIM in the mix as well I thought it would be good to try and update this diagram. I will stress that the following diagram is my own opinion on what a future EIM/B2B/IoT environment could look like moving forwards. However at a very simplistic level I think it contains some of the key building blocks for a future EIM/B2B/IoT infrastructure to support a manufacturing operation. The IoT presents an opportunity to connect the digital and physical supply chains together and develop more closed loop business systems that are more responsive to changing real world business environments. In my earlier blog I highlighted three scenarios of how this could benefit supply chains, namely proactive replenishment, pervasive visibility and predictive maintenance. In future blogs I will expand more on these closed loop business scenarios and the broader role of EIM in the context of today’s manufacturing sector. Two weeks ago I co-hosted a Twitter chat in partnership with The Business Value Exchange relating to IoT and the impact it is likely to have on the CIO, here is a quick recap of the main discussions that took place.

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EDI Hard Facts #3: EDI Reduces Order Receipt to Shipment by 4 Days!

Another compelling benefit (see below for links to other posts in this series) cited in Supply Chain Insights’ new study “EDI: Workhorse of the Value Chain” addresses the time that businesses save when they send and receive business documents via EDI. They remove four days from order receipt to order shipment! “When orders are managed B2B hands-free (no manual intervention) through EDI/XML, the time from order receipt to shipment is halved. In the survey, the average response changed from three days—if the order could be received and processed without manual intervention through hands-free EDI—to seven days to ship an order that needs manual manipulation.” It’s pretty clear how EDI speeds up the ordering process. When you exchange documents via postal mail, it takes days to arrive, so it may take weeks to even discover that the mail was lost. Moreover, in some countries weekend delivery is non-existent or minimal. In the United States Saturday delivery may be ended, which means businesses operating on weekends will have to wait even longer for important orders and other documents to arrive. Courier services such as UPS and Federal Express are more reliable but costly. And even with faxes, documents don’t always arrive or can remain at the fax machine or on someone’s desk for some time before any action is taken. In contrast, EDI transactions can be exchanged in minutes. Furthermore, there is significant time saved from the elimination of data re-keying into back-office systems (supplier’s order management system, buyer’s warehouse management and/or accounts payable systems) and the high error rate, which result in time-consuming corrective actions. Saving four days can have a huge positive impact on your business because providing faster deliveries to your customers typically means greater customer satisfaction, which often leads to increased orders and you can also be paid sooner. In my next blogs, I will continue to share additional statistics from Supply Chain Insights’ report with you. In the meantime, if you would like to read the entire report, you can get your copy here. You can also watch this 30-minute webinar with industry analyst and founder of Supply Chain Insights, Lora Cecere, who discusses the key findings and takeaways from the study. Other posts in this series: EDI Benefits – Hard facts now available! Finally, Some Hard Facts About EDI – (1) EDI Still #1 By Far EDI Hard Facts #2: EDI ASNs Save Average of $78/order

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A Low-Carb Diet for B2B Integration Programs

As I discussed in my last post, the New Years’ Resolution of many IT organizations is to modernize and upgrade their B2B integration platform.  Most of these companies are attempting to shift away from their high carb diet (where they are feeding a spaghetti-like maze of multiple, redundant platforms) to a leaner, more efficient architecture.

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From BRICs to MINTs – the Second Round of Emerging Market Growth Begins

The BRIC (Brazil, Russia, India and China) countries have seen significant growth over the last decade since the group of countries were defined as emerging markets in 2001. Brazil is currently experiencing significant growth in its manufacturing industry thanks in part to high import taxation laws imposed by the government. These laws were introduced to try and encourage companies to manufacture goods in Brazil rather than import them into the country. The government policy of high import taxes has worked, especially as far as the automotive industry is concerned and the high tech industry is growing quickly as well. In fact I would argue that next to China, Brazil is seeing more inward investment, from a manufacturing investment point of view, than many other countries at the moment. Whether it is to take advantage of a growing economy or leverage the country as a stepping stone into the North American market, you cannot deny that Brazil is on a roll at the moment. Russia has also seen significant growth over the past decade, thanks in part to a reduction in government imposed restrictions and red tape. Traditionally many companies have chosen markets other than Russia to invest in but those that have taken the plunge and invested in Russia have seen huge growth in their own market share. The automotive industry is a prime example, many Russian car plants look as though they have just come out of the stone age due to tight government control and lack of investment, but St Petersburg Port has become an unlikely investment hub for the global automotive industry. Renault-Nissan made a significant investment in the government controlled automotive manufacturer Avtovaz, which has resulted in the alliance controlling a significant market share. Like a Phoenix, the whole automotive industry in Russia is now rising from the ashes and it is just a matter of time before millions of consumers start to spend their money on new cars. Moving across to India, the country is still seeing significant growth in its economy, thanks in part to a decade of setting up one of the world’s largest markets for outsourcing companies to invest in and it has become the offshoring destination of choice for many companies around the world. Consumer wealth in India is growing significantly and many consumers are making the switch from two and three wheeled vehicles to cars. India’s manufacturing industry has grown around its ability to produce high quality goods from a relatively low cost but highly skilled workforce. Most goods manufactured in India are for export but increased consumer wealth is likely to slow down the rate of export as manufactured goods are sold into the domestic market instead. So some interesting dynamics at play here which has helped companies such as Tata invest in overseas luxury brands such as Jaguar Land Rover (JLR). In fact in 2013 JLR sold more cars than any previous year thanks in part to the significant investment from Tata who has a strong belief in the future of the luxury brand. Ten years on and China is still referred as an emerging market by some analysts but out of the four countries China has seen the largest growth in its economy when compared to the other three countries. As consumer wealth has grown in the country, so has the consumer desire for luxury goods such as cars. In fact China is the largest car market in the world and it continues to grow. Strict government laws, namely establishing joint manufacturing ventures, around how western companies can establish a presence in the country, has helped its own domestic manufacturing industry to flourish. However times are changing in China as the government tries desperately to spread the wealth across the country rather than have it all focused along the East Coast. Large tax based incentives are now seeing more western investment in central and western China and this trend is likely to grow over the next ten years. Today, companies are finding they have a choice, either to put up with the increasing wage rises in Eastern China or move their operations to lower cost regions of the country. In some cases companies, even Chinese ones, are looking at other emerging markets around the world to invest in. Increased wage costs, labour strikes and a desire to exploit other growing markets has led to the emergence of a new wave of emerging economies, thirteen years after the BRICs were defined. Hold on tight, the second wave of emerging markets is vying for inward investment, say hello to the MINT countries! This new acronym refers to Mexico, Indonesia, Nigeria and Turkey and was coined by Jim O’Neill, the former chief economist and head of asset management at Goldman Sachs. Interestingly Jim was also credited with introducing the BRIC term back in 2001, so you could say he has expertise in identifying key growth economies around the world. So let me now explore why these countries are likely to take over from the BRICs as the economic growth engine of the world. One of the common things that three of the MINT countries share is that they all have geographical positions that should be an advantage as patterns of world trade change. For example, Mexico is next door to the US and also Latin America. Indonesia is in the heart of South East Asia but also has strong connections with China. The BRIC countries have certainly helped boost the profits of many logistics providers around the World as they ship manufactured goods from China and India to all corners of the world. Given that the MINT countries are geographically better positioned next to key economies then I would expect the dynamics of the logistics industry to change given the shorter distances that goods will have to be shipped to reach their point of distribution or sale. As for Turkey it can be regarded as being in both the West and East however Nigeria is the odd one out here as it is located in a part fo the World that has traditionally seen little development, at least by Western standards but it could be a key country once other countries stop fighting with each other and trade finally opens up across the Continent. Given that Nigeria has been included in the MINT definition it could lead to the country being accepted as a member of the G20 as the other three countries are already members. Economically three MINT countries, Mexico, Indonesia and Nigeria are commodity producers and only Turkey isn’t. This contrasts with the BRICs where two, Brazil and Russia are commodity producers and the other two countries aren’t. In terms of wealth, Mexico and Turkey are at about the same level $10,000 per head, this compares with $3,500 per head in Indonesia and $1,500 per head in Nigeria which is roughly the same as India. They are slightly behind Russia at $14,000 per head and Brazil on $11,300 but still a bit ahead of China on $6,000. As part of the research for this blog I found a great set of infographics which dives deeper into each of the MINT countries, click here for the article. From an infrastructure point of view, these countries have some significant catching up to do, especially in Indonesia and Nigeria. Jim O’Neill recently completed a trip to each of the MINT countries on behalf of the BBC and he found out some amazing facts. One of the most interesting was that about 170million people in Nigeria share the same amount of power that is used by about 1.5million people in the UK. Almost every business has to generate its own power. So this begs the question, how has Nigeria grown at a rate of 7% with literally zero power! If Nigeria is able to sort out its utilities infrastructure then it is estimated that Nigeria could grow at 10-12% per year and become a key economic hub for the African continent. Indonesia faces both political and infrastructure challenges and Turkey has its politics and a desire to do things the Western way which when combined with the Muslim faith in the country is certainly a challenge but they are determined to see their economies grow over the next decade. It is no surprise that Turkish Airlines is currently the fastest growing airline in the world. From a manufacturing point of view, Mexico is grabbing most of the MINT related headlines in terms of levels of manufacturing inward investment. Over the past two years it has established itself as a key automotive manufacturing hub, thanks in part to its relative proximity to the huge North American market and significantly reduced labour rates. Nissan, Daimler and VW have all announced multi-billion dollar investments in new production plants in the country. Indonesia is seeing significant investment from both Western and Chinese companies looking to get out of the increasingly more expensive Chinese labour market. Just as Mexico stands to become a leading automotive hub, then it is possible that Indonesia could become a leading high-tech investment hub over the next decade. High Tech goods have been manufactured in Indonesia for many years but I would expect exponential growth to now continue given that the country has now been identified as a significant growth economy. From a B2B perspective it has been interesting to watch how technology has been adopted across the BRIC countries in recent years as it provides clues on B2B adoption levels across the MINT countries. Out of all the BRIC countries and from a communications point of view, China has placed a lot of emphasis on improving its legacy telecommunications and network infrastructure. It has also been keen to develop its own XML based message standards due to the increasing importance placed on internet based trade around the world. However what has actually happened over time is that Western companies entering the Chinese market have brought in their Western ways of working and this includes their best practices for deploying B2B, ERP and other IT infrastructures that are key to operating a business today. Also, China has huge global expansion plans and if they are to establish further operations in North America and Europe they will have to adopt Western B2B message and communications standards such as EDIFACT and AS2. For this reason I believe that EDI messaging is here to stay and in fact the growing success of the emerging markets and their global expansion plans could lead to a growth in EDI traffic around the world. Who thought that would happen back in 2000 when XML was touted as the replacement for EDI messaging! Since the BRICs were identified as growth economies in 2001, technology has moved on very quickly and I think we will see the MINT countries move straight to new telecommunications infrastructures such as mobile networks. After all reliable, fixed line internet connectivity is not widely available in many of the MINT countries. Given that it is far quicker to install a mobile network when compared to a fixed line telecommunications infrastructure then I would expect mobile commerce or M-Commerce to grow faster in the MINT countries than the BRIC countries over the next few years. Here is a great SlideShare presentation that I found highlighting how a local telco provider, Vodacom, plans to support the mobile communications market in Nigeria, click here for more information. China will probably be implementing more mobile networks across the Western parts of its country but collectively I think mobile network adoption will be faster across the MINTs. If companies are able to get access to reliable mobile and utilities infrastructures then we will see levels of B2B adoption increase quickly as the MINTs look to utilise more cloud based B2B integration services. Given the relatively low IT skills that exist in some MINT countries, a cloud based approach to rolling out B2B infrastructures will help these countries grow their economies far more quickly than the BRICs were able to achieve in their early days on the world stage. International expansion is an area that I have covered in numerous blog posts over the past few years, but this particular one encapsulates most of the areas that companies have to be aware of when entering a new market for the first time. I have discussed Mexico extensively in an earlier blog post and future blog posts I will cover the other three MINT countries in more detail. So in summary, an interesting time for Western companies, should they invest in BRICs or MINTs ?, as I have a sweet tooth I think I know where my money would go!

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EDI Hard Facts #2: EDI ASNs Save Average of $78/order

Based on survey responses from companies around the world, Supply Chain Insights’ new study “EDI: Workhorse of the Value Chain” documents many of the benefits of using EDI for competing in today’s economy. One EDI document in particular is cited as being critical to business success – the Advance Ship Notice (ASN). Using ASNs in the shipping and receiving processes enables both the supplying and receiving companies to compete in a business environment in which fast, efficient delivery of goods to the right place at the right time is a key to success. Here’s what survey respondents said: 1. ASNs save time. 56% of study participants indicated that when ASNs and barcode labels are notused, the goods receipt process takes longer. That’s because of the need to first manually inspect those boxes/pallets/packages to determine their contents and then how they should be routed. With an automated EDI process, the ASN electronically provides the details of a shipment of goods including carton identifications, content descriptions, and transportation details. The ASN often includes the identifying numeric characters of the barcoded shipping label affixed to the pallet of goods, which is read into the buyer’s warehouse management system (WMS). When a shipment arrives, receiving personnel scan the barcode on the shipment, which is then automatically matched to the records in the warehouse management system to verify shipment accuracy. As a result, inventory levels are updated and warehouse personnel are notified where to forward the received goods. It’s all automatic and efficient. 2. ASNs save money. As you see in the chart below, on average, shipments without ASNs cost $78/order extra. Businesses save those costs when they eliminate the manual processes described above. In addition, getting ASNs provides the visibility needed for proper labor planning, thus eliminating unnecessary labor expenses. For example, knowing which containers with what products are arriving at any time enables you to ensure that the right doors of your distribution center are set up for receipt and/or cross-docking. Or, for international shipments, you avoid having goods arrive at the port without your knowledge, which would otherwise require personnel to scramble to get the goods moved to your distribution center. Also, you avoid increased container costs when such shipments remain at the port for extra days. Furthermore, when businesses lack visibility to shipments from their suppliers they need to expedite shipments more frequently because they are uncertain of arrival dates and cannot afford to disappoint their customers. In my next blogs, I will continue to share additional statistics from Supply Chain Insights’ report with you. In the meantime, if you would like to read the entire report, you can get your copy here.

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Does Your B2B Integration Environment Have Too Many Carbs?

It’s New Years and that means the time for resolutions. One of the projects many companies are considering for this year is building a leaner, more efficient B2B integration platform. Many companies are struggling with “high carb” environments that consist of a maze of spaghetti-like connections between enterprise applications and your business partners. The longer these high carb environments remain in place the more weight your B2B platform takes on. The weight not only slows you down, but could lead to long-term health consequences for the business if not corrected. How Do Companies Get Hooked on High Carb Diets? Second Course of Applications – You have 50 or more enterprise applications – ERP, CRM, Warehouse Management and Treasury Workstations – which are the source or target of a B2B exchange. Forecasting, purchasing, logistics, inventory and payment data must be extracted from these applications then repackaged into standardized messages. Fatty Middleware – You use six to eight middleware platforms to connect to your enterprise apps to the outside world. Why so many? Some are the result of recent mergers after which the IT systems were never fully integrated. Others were the result of a desire to empower local regions to operate independently. There are lots of legitimate reasons why this happens. Gluten-Rich FTP – You have 233 AS2 and FTP connections to customers and suppliers. “The sales guy from the FTP company told me direct connections would save money on VAN fees, but they didn’t tell me all the time my people would have to spend managing them.” Does this sound familiar? Direct AS2 and FTP connections do save money, but it is difficult to scale more than a handful of these. High Fructose VANs – You have five different VAN providers to maximize your reach to customers. “And we are also still connected to that dot-bomb B2B marketplace our CEO invested in back in 1999.” Customers switch on, off and between VAN providers creating a tracking nightmare. LOB Smorgasbord – The accounting groups in each different European country went out and signed up with local e-invoicing providers. Treasury picked its own SWIFT Service Bureau. Transportation selected its own SaaS-based Logistics application. Sales signed up with a Point of Sale analytics company. Now you have 15 different specialized vendors to handle B2B exchanges for each different function.

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