As products become more technical, customer expectations rise, and competition stiffens, things will only get more challenging for these businesses. So, what’s the answer? There’s no panacea. But B2B integration is crucial.
B2B integration improves efficiency, enhances communication and collaboration, increases sales, reduces costs, eliminates errors, and improves decision-making. By integrating your people, systems, and processes with your trading partners, you can transform your business for the better. This article explains why.
Let’s dive in.
What Is B2B Integration?
Business-to-business (B2B) integration is the process of connecting two or more businesses so that they can exchange information and transactions digitally. This allows for more efficient communication and collaboration between companies, improving processes, saving costs, and enhancing customer experiences.
B2B integration is typically done using specialized software or platforms that allow businesses to exchange data and conduct internet transactions securely. This includes things like exchanging purchase orders, invoices, and other business documents.
Good and Bad Business to Business Integration Methods
The Bad: Mail and Email
When it comes to exchanging business documents with trading partners, many companies still rely on the old-school method of printing documents, sticking them in envelopes, and mailing them out. This is slow, expensive, unreliable, and bad for the environment.
Many other companies rely on email, which has its own set of drawbacks, including
- If you mistype an email address, your message won’t go through, and it can end up in the wrong hands.
- If the recipient’s inbox is full or their server’s down, your email will bounce back. Sometimes you’ll receive an error message, but often you won’t!
- If your email’s marked as spam, it can get filtered into a random folder and disappear, causing delays and confusion.
- If the recipient is hacked, your trade secrets or IP could be leaked, causing irreparable damage to your business.
Fortunately, there is a better way. And it’s called EDI (electronic data interchange.)
The Good: EDI
When transferring business documents to trading partners, the largest and most forward-thinking businesses have evolved away from using mail/email. Instead, they use EDI (electronic data interchange), an automated technology that shares data safely, securely, and instantly from computer to computer.
EDI works by:
- Gathering information from a source app (such as a PO from your ERP system).
- Converting and repackaging that information into a standardized form.
- Sending the repackaged information to a trading partner via an industry standard transport protocol.
- Ensuring the recipient’s EDI system ingests the information correctly and routes it automatically to the relevant target system.
Instead of relying on slow, unpredictable manual processes, EDI automates everything. It establishes a common language for how documents are created, shared, and received, keeping entire industries in sync. With EDI, you can move at the speed of the most agile business in your industry and work with companies of any size and scale.
A Quick Word on Integrating People
When it comes to B2B data integration, EDI has to be your first port of call. But there are human factors to consider too.
Your people have to be able to work with your trading partners’ people without unnecessary friction. This means nailing down dispute resolution, partner onboarding, audit control, and getting to know the people you interact with regularly. A little effort goes a long way.
5 Benefits of B2B Integration
Here are the benefits you will experience if you implement EDI.
1. Improved Efficiency and Productivity
B2B integration allows businesses to automate many critical processes, saving time and reducing potential errors. Fewer employees are needed to carry out tasks, which reduces the cost of salaries and benefits, meaning you have more money to distribute to your top talent. In other words: you can achieve more with less.
Let’s face it–computers are better than humans at performing repetitive transactional tasks. They’re faster and more reliable. So why not automate the most time-consuming tasks and free your employees to work on more meaningful, high-value projects? Give them the time and space they need to be creative and increase retention simultaneously. We all know how hard it is to find quality hires right now.
2. Enhanced Collaboration
B2B integration reduces the time it takes to exchange critical data and improves the accuracy of the information being shared. It breaks down silos, facilitates real-time communication, and encourages cross-functional collaboration across your organization and with external partners.
Internally, effective communication and collaboration can lead to more significant innovation, helping to foster a more open and collaborative working environment. It brings together different perspectives and expertise, leading to the generation of new ideas and driving continuous improvement.
Externally, integrating your systems with your suppliers and other trading partners unites stakeholders around a single source of truth for data. Everybody’s on the same page regarding decision-making and process improvement, which means fewer conflicts, longer-lasting relationships, and significant cost savings.
3. Better Decision-Making
By digitizing supplier interactions, businesses can gain greater visibility into their supply chain and make more informed decisions about optimizing their processes and managing their resources.
Data stored in paper form and squirreled away in a filing cabinet is of limited value. But with a system like EDI, your data is digitized and accessible across your organization. You can amass, manipulate, and analyze data to spot trends, weaknesses, and opportunities, reducing costs and getting ahead of competitors.
4. Improved Scalability
The larger your business gets, the harder you work to stay aligned with your trading partners. You have two options: hire more employees, or invest in B2B integration. One option scales. The other doesn’t.
B2B integration can help you expand your operations and grow your customer base without sacrificing efficiency or piling more pressure on an already-stressed team. With EDI, the cost of additional document exchanges is marginal at most. And because everything’s automated and error-free, any mistakes and miscommunications can be identified and rectified quickly.
If your business is on an upward trajectory and you’re starting to deal with larger companies, then the time to adopt EDI is now. Not only because it makes your business more efficient but because most large enterprises (like Amazon and Walmart) demand it. Don’t wait until you get that massive order. Implementing EDI with ERP and other core systems takes some time, so starting ASAP is wise.
5. Enhanced Security
EDI provides a secure and reliable way to transfer sensitive information, which is why the most prominent companies and many government institutions use it. It uses secure communication protocols to encrypt and protect the exchanged data and prevent unauthorized access or tampering.
With EDI, organizations on both sides of a transaction can automatically verify document authenticity. They can ensure information is accurate and compliant with industry regulations, protecting valuable trading partner relationships from crumbling under a security breach.
Types of B2B Integration Software
Kickstarting B2B integration with the right EDI partner is painless. There are just two decisions you’ll need to make. First, should you opt for a cloud-based, on-premises, or hosted solution (hosted is like on-prem, only the software lives on the vendor’s servers)? And second, should you outsource EDI management to your EDI vendor or manage everything yourself (self-service?) Each has its pros and cons.
SaaS (software-as-a-service) EDI is cloud-based. The solution lives in the cloud, and you access it through your browser. SaaS EDI is fast to implement, providing a rapid ROI. It’s paid monthly rather than upfront, which can help you manage your finances better. And the total cost of ownership is low–you don’t have to do bug fixes, updates, and upgrades; the vendor is responsible for all that.
On-premises (on-prem) EDI is stored on your server, which is most likely somewhere on your premises, as the name suggests. On-premises gives you total control over how your EDI system operates–you can tweak and modify it to your heart’s content. It’s accessible any time (without an internet connection), and for some businesses, particularly larger ones, it can work out cheaper over the long term than the SaaS alternative.
Whether you should manage EDI yourself comes down to the size of your IT team and its EDI experience. If you have the capacity, there’s no reason why you shouldn’t manage EDI in-house. If your IT resources are limited, and you want a fully scalable solution, a predictable cost, and considerably less stress(!), outsourcing management will be a more attractive proposition.
B2B Integration with 1 EDI Source
At 1 EDI Source, we handle EDI for small and medium-sized businesses up to multi-billion dollar enterprise companies. With more than 50,000 trading partner maps in place, support for every format and protocol, and a robust staff of EDI experts, we can get you up and running fast.
Whether you need a SaaS or on-prem EDI solution, we can walk you through the right options for your business. So if you want to talk about B2B integration, get in touch. We’d love to hear from you.
