Supply Chain

Quantifying the impact of B2B integration on supply chain operations 

Let’s face it: buying strategic IT solutions is not easy. Complexities around technical details, cascading effects across different functions of the organization, and meeting the needs of various stakeholders require intense focus and effective communication when making the purchasing decision. And after succeeding with that, you then have to tackle hurdles around adoption and measuring the realized impacts of the solution. It’s no wonder 67% of CFOs believe their digital investments are underperforming against expected outcomes

Driving and demonstrating the value of supply chain IT can be challenging

In addition to getting internal stakeholders aligned in supply chain IT, you also have to get your partners to collaborate around technology usage. This can magnify challenges. Procure-to-pay automation doesn’t work if you can’t get suppliers onboarded, and advanced demand planning is complex if you’re not getting forecast data from customers. 

There can also be ambiguity about what business impacts can and should be expected from a given solution. Business-to-business (B2B) integration is one of the solution areas where a lot of the work happens behind the scenes, and you don’t necessarily even think about it much. When it works, it just works—But when it doesn’t, impacts can be dire.

This is a stylized image showing how integration puts supply chain optimization in the palm of your hands.

B2B integration improves supply chain performance – But how and how much?

Based on research by IDC and others, digital supply chain maturity generally correlates firmly with improved revenue and profit performance. However, in light of the underlying complexities in the mechanisms through which B2B integration impacts supply chain operations, OpenText wanted to capture more details about the specific business value delivered by B2B integration solutions. 

To uncover these insights, OpenText partnered with IDC to conduct a set of in-depth interviews with nine OpenText customers that explored the value and benefits of using OpenText Business Network solutions to support their supply chain operations. The results demonstrate significant user benefits and make a strong case for digitizing B2B information exchange to improve supply chain performance. You can access the complete analysis here, but key findings include the following financial, business, and IT operations impacts.

Financial impact – What is the ROI from B2B integration? 

The business case is one of the most critical questions to consider when buying a technology solution. In terms of return on investment, OpenText customers reported seeing an average of 317% ROI over a 3-year period, with the investment payback time being 14 months.

Cost savings naturally varied significantly based on the scale of the solution deployment, with the average cost saving among the interviewed companies coming in at $6.06 million. Two-thirds comprised inventory-related savings, and the remaining one-third was warehouse-related savings. In addition, the interviewed companies reported gaining an average of $5.35 million in new annual revenue as a result of implementing the OpenText solution. The key drivers behind this were 13% faster time to close new deals and an increase of 9% in the overall number of closed deals. 

Lower cost of ownership is a big benefit. Why? Because we’re now not having to invest in the 50 software applications which we would typically have had to buy service for and network it up, apply maintenance patches, etc. They have lowered the total cost of ownership of those solutions by providing a highly available, highly resilient solution…

~European manufacturing company

Business impact – How does B2B integration improve supply chain performance?

B2B integration broadly impacts the supply chain and other business operations by facilitating critical information exchange across various business processes and different trading partner organizations. OpenText’s customers reported average productivity improvements across different lines of business teams:

  • 30% for supply chain management
  • 27% for accounting
  • 26% for procurement
  • 19% for manufacturing
  • 18% for warehousing
  • 16% for sales
  • 13% for customer service. 

It goes back to reduced delivery time of our supply chain, better communication with our supply chain, and overall potential cost reduction, because our inventory levels within our supply chain and within our own facilities have been more agile…OpenText has given us direct insight into our suppliers and our supply chain, and this particular visibility has allowed us to become more agile.

~North American transportation company

IT operations impact – How do B2B managed services impact IT operations?  

Finally, B2B integration is often time-consuming and complex for IT teams due to the inherent coordination challenges, specialist skills needed, and the dynamic nature of implementation projects and change management requests. Companies interviewed for this research leverage OpenText managed services for B2B integration. 

Based on the results, this model delivers substantial benefits by extending the capabilities of the customer’s internal IT teams. By adopting OpenText’s solutions, these teams had fewer applications to manage and were able to improve their productivity by 45% on average. In addition, the organizations achieved 19% cost savings over five years by streamlining their supply chain technology portfolio. 

Time is the biggest benefit of using OpenText. We’re not spending a ton of time doing everything manually or trying to work with a piece of software that doesn’t do what we need it to do. This gives us time to do other things we need to do.

~North American food and beverage company

Read the complete IDC business value analysis on OpenText digital supply chain solutions here.

Ville Parkkinen

Ville Parkkinen is a Director of Product Marketing for Business Network at OpenText. Working closely with OpenText’s Product Management, Engineering, Solution Consulting and Sales teams, Ville enjoys taking complex technical concepts and translating them into tangible business value in customer context. Solution areas that Ville focuses on include digitization and automation of supply chain processes including order-to-cash and procure-to-pay; electronic invoicing solutions; B2B/EDI integration; data visibility and analytics; and managed integration services.

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