B2B Integration Challenges
B2B integration can be complex, ongoing, and crucial for realising an efficient supply in an unpredictable world. The ever-changing landscape due to global and national issues such as Brexit, the Covid-19 pandemic, and the potential EU fragmentation of the future, impacts businesses of all shapes and sizes in different ways. It is difficult for organisations to keep up. Automating key business processes can allow for easier and more effective trading amongst customers, suppliers, and business partners, which can provide a competitive edge and ensure customer satisfaction. In this article, we take a look at the top B2B Integration Challenges and talk through some of the impacts as well as how to overcome them.
The top challenges
Our prospective customers often face these challenges when they come to us for B2B integration solutions:
1. Onboarding of trading partners
The key challenge businesses have with integration is integrating with other businesses. To automate the data flow between systems and applications, such as ERP, a B2B connection must be set up. This can become very complex if a business is trading with lots of different customers, suppliers, and partners which need to connect their systems to achieve the overall goal of B2B integration.
2. Data types
There are many different data types involved in B2B integration, both EDI protocols and standards must be considered.
An EDI protocol describes and defines the exchange of data between computers and is used by the communication software/application. Both parties who want to exchange data must use the same protocol, whether it be HTTP, AS2, OFTP(2), or another for B2B EDI integration.
EDI standards are the requirements of the format of the data. They have been developed by industry; however, businesses interpret these standards differently, resulting in variation. This variation of data across trading partners makes data integration very complex. Businesses typically use different formats that all have unique attributes. Therefore, it is difficult to integrate data to meet business requirements.
Here are a few examples of EDI Standards used by industries:
3. Data control
If you have some form of B2B integration already set up, the data will be passed between the connected systems. But how do you control the data? What was before a manual human process which was managed and monitored by individuals, is now an automated process managed by systems. Data is being passed through flows, but what happens if data gets stuck or is not accepted by the system it needs to get into?
4. Ever-changing integration needs
Integration is ever-changing. For example, you will need to onboard a new trading partner to grow your business or one of your existing trading partners changes the format they need their data in. On top of that, technology will continually evolve, and integration types may change in the future.
Let’s take a closer look
All these challenges can pose significant threats to organisations, but some maybe are unrecognised. If onboarding trading partners is not a clear and defined process, that has a knock-on effect with the time it takes to onboard each partner and the success rate of onboarding.
Isolation of technology infrastructures leads to silos. These silos can create huge gaps in businesses which can fester for some time before being discovered! Furthermore, if systems are not connected, we rely on people resources to send and input data for us, which leads to human errors.
Most businesses trade with all shapes and size of business across different locations. Amongst those businesses will be a plethora different system, from legacy to modern. To be able to trade and connect to multiple, hundreds or thousands of different businesses, you will need to understand the different infrastructure set ups.
If the data is not in the correct format for the trading partners system, it will be rejected, or the trading partner will not be able to make any sense of the data they have received, which will impact your business.
Penalty fees are a common result of incorrect data. For example, if a supplier of a Tier 1 OEM is sending an Advanced Shipping Notice of the goods the OEM has asked for, but it is in the wrong format, they will not receive it or process it. This could result in OEM not being ready to accept the delivery of the goods and charging the supplier a penalty fee. Potentially, they could also be removed from their supplier list, so the supplier would lose out on further business with that OEM in the future.
When data does not match up there is discrepancy, for example, from data errors which lead to disputes. The data does not enter the system as it should and will not be processed. This causes backlogs, delays, time, and money wasted, plus a huge impact on businesses further down the chain.
Keeping up with B2B integration changes
If you set up your business integration and do not consider future changes you will essentially be undoing all your hard work. Trading partners will change, they will either get a new solution, system, application or change the format they work in. If you do not continue to change with them, you will lose their business.
In addition, if you do not keep on top of the latest integration methods, you may find your business being left behind. You will struggle to connect to businesses whilst becoming less competitive in the market as time moves on.
A completely new process is put in place for your business data when B2B integration is set up. The software and systems you used before may have changed. Your business may no longer be compliant with data security measures, therefore new measures will need to be put into place.
Why you should consider implementing B2B integration
Save money and time
If you don’t implement an automated and digital first approach to your B2B integration you could waste a lot of money and time. It’s therefore to vital to increase visibility and productivity of supply chain logistics to save money and time.
Plan for the future
In order to remain competitive for the future, business need to look to achieve B2B integration or risk being left behind.
“By 2024, at least 65% of organizations will justify integration capabilities expenditure as strategic investments, up from less than 40% in 2019.”
“Through 2024, 75% of midsize to large enterprises will leverage at least two different integration tool categories in order to strategically address most of their pervasive integration needs.”
The consequences of unsuccessful B2B integration
Your integration project has come to an end, it is time to switch over and launch into an automated world. A lot of hard work, time and effort has been put into the project, employees have built up to this very moment, to see their success. However, from the moment of the launch all that seems to appear is problem after problem. Eventually employees are fed up with dealing with these issues and become detached from the project they were originally invested in.
Pressure felt by all
Money has been spent on the integration project, however because of the unsuccessful implementation, senior members start to question, and pressure is pushed down the hierarchy to show/prove the results.
Less buy-in into the new process
May get multiple data errors which are disputed and takes up resource to resolve. This leads to employee’s original investment in the project to dwindle.
Your competitors don’t make mistakes like you do
They are faster and deliver on time, every time. This means you will lose business which will make employees feel a mixture of emotions. Some will feel anxious as they have a target to meet, others will feel down as they are not making customers/suppliers happy. The effects of poor B2B integration are not just felt in the boardroom, it ripples out to other areas of the business and can impact your customers.
Overall morale in the team/business becomes low
Employee enthusiasm is gone due to the amount of issues, and competitors are winning most deals, so pressure is pilling up. Overall, the integration project is spiralling out of control. Where can you go from here?
How to solve these challenges / The way forward
Break the isolation through data sharing
- Once connections are set up you can share data via data flows.
- Automated processes result in fewer human errors.
- Benefits from data sharing include improved efficiencies, insight into the data you are sending and receiving, and data analytics to report on.
Deal with different data formats
‘Data mapping’ can be used to set up ‘translations’ between different trading partners. You can set up different transformations for each trading partner to ensure that their systems will receive and process the data you send. It is like dealing with different languages, if using a VAN (Value Added Network) provider all of these data transformations are dealt with for you.
Improve data quality
Now you have enabled data flows through the connection of systems and applications, you can improve your data quality by setting up the integration solution to verify the data against your specific business rules.
Secure your business data
You will need to think about what data is being sent and received regarding your business. Also, what data you are you receiving? Your data may need end-to-end encryption
How to implement these changes
Most businesses either choose to invest in internal resources who are dedicated to integration or to outsource to a business who specialises in integration, so they can concentrate on their core business. Here are the top EDI solutions providers.