Five Trends Guiding the Future of B2Bi and ERP
B2B integration done correctly is a chance for organizations to cut costs without reinventing the wheel. And by 2020 and beyond, many organizations will have taken advantage of the opportunity to do so.
Here’s how we expect the supply chain to evolve over the next decade.
Expanding the consumer net by collaborating on a global scale. According to the International Trade Administration, less than one percent of the 30 million U.S. companies export goods—a percentage that is significantly lower than all other developed countries. And of U.S. companies that do export goods, 58 percent export to only one country.
These statistics paint a clear picture of one change that organizations must make to compete in the global market. For buyers to properly compensate suppliers and for suppliers to properly meet the evolving needs of those buyers, all organizations will have to automate processes electronically.
According to a study conducted by the University of Tennessee, suppliers captured a 25-percent savings increase by processing orders electronically and 20 percent by processing invoices electronically rather than non-electronically. Suppliers using business-to-business integration as a managed service processed invoices five days faster.
By implementing automated supply chain processes, buyers can pay suppliers quicker than ever before avoiding potential supply chain disruptions. For suppliers, supply chain automation makes it easier to comply with hundreds of different buyer standards, which greatly reduces the risk of incurring penalties, such as chargebacks, for noncompliance.
Embracing the cloud. By 2020, more organizations will have made the transition to a cloud-based infrastructure. After all, cash is king, and the cloud dramatically alters how much organizations have in the bank.
For example, when a large consumer product goods manufacturer moved from a direct sales force to a broker model, its brokers were incentivized to pursue large clients. Sales and revenue skyrocketed, but so did the buyer demands, now that their buyers were large retailers- such as Walmart and Academy Sports.
The growing pool of retailers selling their products each required specific EDI compliance capabilities to distribute those products to thousands of distribution points and millions of customers around the world. By expanding and embracing the power of the cloud, they were able to scale resources to meet buyer demands and expand exponentially without missing a beat.
Enabling better data capabilities for proactive management. When organizations work together, sustaining the forward momentum can be difficult. They have to look at collaboration as a journey, not a destination. We might call this the upward data spiral: the ubiquitous data monitoring of supply chains and continual improvement of how you do business.
As more data enters an organization, decision makers improve their visibility, forecasting capabilities, and ERP (enterprise resource planning). It becomes a predictable way to manage something unpredictable. For instance, online shopping has made the demand of products increasingly unpredictable, but with better visibility into data points, organizations can more easily manage how a product will reach the end consumer.
Moving towards omnichannel capabilities. In 2016, major suppliers have inventory sitting in storage and distribution centers across multiple divisions in varying locations. To enable consumers to view and purchase products across a connected interface of online, mobile, in-store, and other channels, organizations must seamlessly manage their inventory across a complex array of global distribution points.
Omnichannel also offers new business opportunities in the form of expanded distribution and virtual shipping. It is often impossible for stores to hold the inventory of 100 percent of their buyers, 100 percent of the time. Yet by leveraging an omnichannel strategy, organizations can expand the number of SKUs (stock-keeping units) to create an “endless aisle” for customers with various tastes.
These processes provide actionable insight, protect the buyer’s brand, and ensures customer satisfaction. Omnichannel allows suppliers to have more distribution points, buyers to offer more unique products, and consumers to get the products they want when, where, and how they prefer to receive them.
Enlisting B2Bi third-party vendors to address rules and standards. In 2020 and beyond, organizations will be more likely than ever to partner with a specialist with the foresight and experience to manage and maintain compliance for their customers on both sides of the buyer-supplier relationship. The collaborative nature of B2Bi through third party specialists establishes a new paradigm for buyers, suppliers, and consumers alike.
Organizations in 2016 have already reaped the benefits of connecting with third party vendors to help them manage these complexities. The University of Tennessee study found that 94 percent saw significant improvement in their electronic connectivity capabilities when using B2Bi managed services; 68 percent reported their clients said they were easier to do business with after implementing B2Bi managed services; and 69 percent said they could respond more quickly to changes in their clients’ environments after implementing B2Bi managed services.
Today, only 30 percent of the organizations surveyed are using B2Bi managed services.
The future collision of supply-chain management and data ubiquity is already well under way. It’s an upward spiral seized by the most successful retail chains and their suppliers, a collaborative success story facilitated by third-party B2Bi firms.
Peter Edlund is the senior vice president of global product marketing for DiCentral, a leading global provider of B2Bi managed services headquartered in Houston, Texas, with 10 offices worldwide supporting customers in over 27 countries. For more information, please visit www.dicentral.com.
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