Line56.com: Hybrid eBusiness Integration
Line56.com: Hybrid eBusiness Integration
Hybrid eBusiness Integration
Combining legacy systems with emerging technologies or merging in-house expertise with outsourced services, is the answer to balancing cost and control
Emerging technologies and trading partner mandates will continue to tax the scarce resources of increasingly “thin” IT organizations. Indeed, the primary challenge facing B2B integration analysts and experts in small to medium-sized organizations is the ability to identify effective and flexible solutions.
Over the past 18 months in particular, IT departments have been challenged to meet partner mandates and support new technologies while trying to meet internal pressures to reduce cost. Balancing these two often dichotomous initiatives is leading many IT managers to consider outsourcing as a strategic alternative.
The most recent set of partner mandates in the supply chain management community is centered on leveraging new Internet-friendly communication protocols, such as Wal-Mart’s AS2 mandate, and the promise of cost reduction for those mandating adoption of the preferred technology. Customer-driven mandates are inspired by the natural financial implications and relationship of customers and vendors.
Mandates and Compliance as a Positive Catalyst
Industry-centric mandates are certainly not new to the retail space, and AS2 is just the most recent star. UCCnet has identified AS2 as a transport preference, and many key players are mandating use of the item registry to synchronize data.
The ability to use the Internet to transport information, manage items and synchronize data reduces internal errors due to common nomenclature in the total supply chain and the industry at large. To achieve the promise of lowered costs, adoption across the entire supply chain is required.
However, adoption rates continue to be the key challenge. Partners and mandate sponsors are required to reposition the execution strategy and implementation requirements and timelines to aid in accelerating adoption. This has been seen in the number of implementations starting with electronic data interchange (EDI) and continuing with AS2 and other mandates where dates slip, additional solutions are added and previous restrictions on service providers are relaxed.
RosettaNet, another example of a technology mandate, is also seeing adoption challenges. In the electronics industry, the establishment of RosettaNet has identified a series of strategic processes which can be choreographed with suppliers and customers to deliver benefits to both sides. The largest RosettaNet challenge is the implementation cost, which requires thorough process analysis, back-office enhancements, software purchases and the necessary implementation services to roll out a functional solution.
Over the last two years, vendors have developed service offerings which promise an extension of current EDI/B2B communications investments to minimize change and cost. Industry leaders like Cisco and their eHub initiative have accelerated adoption and required affordable solutions in the form of software, and most importantly, service offerings that extend current implementations.
These options continue to streamline the effort to successfully implement RosettaNet for small and medium-sized organizations.
Seeking a Hybrid Solution
Key players helping to resolve the adoption issue are traditional Value-Added Networks (VANs) and e-commerce service providers who support communications, data transformation or the total outsourcing of the full initiative to meet the requirements.
Often, a hybrid solution, (e.g., combining legacy systems with emerging technologies or merging in-house expertise with outsourced services), is the answer to balancing cost and control. Companies are adopting hybrid strategies to extend the return on investment of existing e-commerce infrastructure, while meeting the stringent timelines to become enabled and compliant to industry and customer mandates.
Retail has long led the B2B mandates being put forth by the industry heavyweights, including the recent Radio Frequency Identification (RFID) requirements and complex demand planning initiatives. As incremental investments are required to support the compliance requirements, most companies must weigh the value of operating a solution in-house or selecting an external service provider.
Services continue to emerge, but so do modestly affordable alternatives in the $25,000-$50,000 implementation window. Therein lies the challenge for IT directors and CFOs and the ultimate drive toward a hybrid B2B implementation: Finding solutions that leverage working heritage solutions while supporting the dynamic standards, technologies and the strategic partners central to an organization’s future revenue stream.
Meeting a partner-driven mandate requires a delicate balance between investment, timelines and complexity. The de facto integration standard in many companies can be as simple as dual-data entry or a fragile point integration environment. On the other hand, it can be as complex as a modern Enterprise Application Integration (EAI) solution harvesting data from the Enterprise Resource Planning, Sales Force Automation, Customer Relationship Management of Warehouse Management System applications to deliver on a global B2B initiative.
Regardless of the level of sophistication, and perhaps due to advanced corporate integration, a hybrid services and software solution may best meet many organizations’ business requirements.
Build vs. Buy
Each organization must map its own solution to the business needs and deliver a solution to the existing business problem. As with any business problem, organizations must rationalize build vs. buy.
In 2004, “build” is no longer a home-grown technology. It is an implementation of existing software, which integrates applications both behind and outside the firewall. If an organization can scale to meet the demands, and the business process is critical to driving profitability and remaining competitive in the market, then the in-house solution may work best with existing software footprints, third-party add-ons, or a new software product altogether. While potentially disruptive to a annual IT plan, technology mandates can often deliver incremental process and integration improvements as organization rethink how they do business and how they integrate.
If a given initiative is not central to a company’s competitive nature, then outsourcing needs to be considered as a way to extend current investments while complying to the requirements and timelines.
B2B outsourcing continues to rise and vendor selection is becoming more difficult as viable, long-term providers are sought. The niche vendors may often bring some domain expertise derived from an “industry veteran” who understands the issues in a space and often represent a purpose-built solution that may only resolve a single mandate. As such, boutiques may or may not be able to scale to the needs of enterprises. The selection process must look at the breadth of the solutions and the ability to absorb the next mandate, solve new problem sets and provide cross industry support.
Another typical outsourcing solution often targeted to solve small organizational issues through proprietary solutions such as browser-based Web forms, or an on-premise client managing the communications for pushing spreadsheets to transform and track documents. As a trading community grows, alternatives are required for all members of the community, from the very small supplier to the largest enterprise.
To deliver the right solution for each partner and community supported, the breadth of support requires dynamic protocol conversion, network interconnectivity and transformation capabilities — traditionally the domain of traditional VAN service providers.
Outsourcing Your Value-Added Networks
The EDI VAN and outsourcing space continues to evolve to address the changing market and technology. As more peer-to-peer connections and new standards emerge from industry organizations, many customers are overwhelmed by the niche options and solutions which could solve the problem at hand. The current infrastructure of your existing VAN service provider represents an optimal position to extend your B2Bi initiative to support the next mandate or technology.
VANs are required to remain technologically current and have the core features and processes in place to securely meet the requirements, often leveraging your existing EDI implementation. VANs offer the extension of current connections, software and potentially data sets to deliver the promise of a true hybrid solution to meet the compliance requirements of most mandates.
Michael Croxton is senior vice president of marketing at Inovis. He can be contacted at mike.croxton@inovis.com.
[...] and Inovis has been actively recommending a best practice approach to B2B along these lines for years. The interesting twist is that it is not only the way some companies support B2B integration that [...]