Demand chain visionaries who adopt "integration as a service" solutions to drive demand-side integration have increased their top-line revenue by building closer relationships with their customers. Putting this model in place takes a lot less time than you might imagine, and it delivers immediate quantifiable business benefits.
Today, there is really no such thing as "business as usual." In a highly competitive global economy, companies are connecting with an ever-growing number of suppliers, customers and other business partners. Opportunities for greater efficiencies and profitability are exhilarating to smart business people yet, at the same time, the mechanics of integrating the companies with which they do business can be daunting. Integration technology is not standardized across the board and likely never will be. What to do when your company uses one set of protocols and methodologies and is trying to sell to companies with multiple different systems of their own?
By deploying service-based cross-enterprise integration, Tradeplace, a European consortium of household appliance and consumer electronics manufacturers, went live with a new business transaction messaging hub and rapidly reduced demand chain operating costs among participating retailers and distributors by 6 million Euro, largely because a service-based approach relieves the technical burden of integration. Additionally, several consortium members reported revenue premiums and improved delivery times with integrated retail partners. All members and their business partners were pleased with how the new model eliminated redundant business processes and improved customer satisfaction.
So, what's behind this success story?
For more than a decade most companies have focused cross-enterprise integration efforts primarily on the supply side. And, despite initial resistance, suppliers have joined in, ensuring that the chain is functioning reasonably well. Integrating the supply chain has been a focus for a number of reasons, not the least of which is that the demand side presents more daunting integration challenges — as well as the greatest ROI opportunities. Companies can have a direct impact on top- and bottom-line revenue while increasing customer satisfaction and retention because they are making it easier for their customers to do business with them.
The Limitations of Conventional Integration Solutions
On the supply side of the equation, there's enormous incentive to comply with the integration demands of the "supply chain master;" it's either that or lose the business. But because most manufacturers and distributors have large-volume agreements with a relatively small number of strategic suppliers, developing and maintaining these connections is somewhat manageable.
On the demand side, though, the stakes are higher. It's unrealistic for manufacturers and distributors to expect customers to follow their lead. In fact, it is incumbent on manufacturers to meet their customers' integration requirements; after all, they are in the business of customer service. Companies have found this to be challenging in a high-volume environment, because the demand-partner base is typically quite large and diverse. Within Fortune 500 companies, customer count typically exceeds supplier count by a factor of more than 50:1. Applying the integration approach that worked well on the supply side simply doesn't work here.
B2B gateway software seems like the right approach, but it doesn't go far enough in meeting the unique needs of varied groups, systems and business processes. Enabling point-to-point connections does not scale effectively or integrate customers rapidly enough. It results in missed business opportunities.
At the end of the day, companies want to connect more customers seamlessly, streamline sales and fulfillment processes, and retain accounts. To achieve these goals, companies should integrate with customers on their terms without compromising their own infrastructures and business processes. To establish and maintain an efficient, high-volume trading environment, both sides must receive the exact information their back-end systems need to process machine-to-machine transactions smoothly and transparently.