In my last blog we were debating the pros and cons of hybrid B2B solutions. The main thread to our discussion wrestled with the pros and cons of “on-premise” or” in cloud” and proved to be a difficult and a more strategic decision than you may have thought. In the end we had consensus that this was a good and timely debate to have and the goal of a hybrid approach was to achieve the best of both worlds while avoiding too many compromises
A great contribution to this debate has arrived from Stefan Reid at the analyst firm Forrester, who seems gets asked these sorts of questions a lot. The link to his article is at the bottom of this blog. Briefly, his views are as follows:
- Cloud is a disrupting technology because it can provide traditional on-premise and B2B integration solutions. Most companies have internal integration between multiple ERPs or other applications and B2B is typically on-premise or a managed service. Cloud can cover both internal and B2B so you need to assess its role more widely. As such, as we had already concluded, it becomes a strategic decision.
- Strategically, Stefan points out that cloud is good at standardisation and self- service and is considered to be an operating cost. This makes is suitable for certain parts of your B2B operation, such as where there is a volatile supply base, for small suppliers, where there is infrequent use and for online collaboration.
- Legacy B2B solutions are usually a capital cost and functionally good at different things. Managed services are good at transporting transactional standards-based documents that require active translating and reporting.
So Stefan’s view is to look at your integration requirements in two dimensions. Given the characteristics mentioned above he suggests thinking in terms of volume of transactions on one axis and the degree of change on the other. So B2B managed services are good for high volume, stable business requirements and cloud for a low volume, frequently changing supplier base. In the top right hand side of the classic matrix, would be hybrid. Stefan recommends that you consider carefully the dynamics of trading partner volume and the degree of change in that community before settling on your exact hybrid approach. So, as we said at the beginning it’s clearly a worthwhile debate to have.
I’ve got some more to add to the discussion, with some other dimensions that I think you should consider. But that’s for next time.