Information technology has enabled companies to build internal control systems that are highly integrated, cost-effective, and secure. Companies have sought the same kind of gains by building closer relationships with suppliers and other strategic partners in a business-to-business (B2B) community. The needs of that B2B community continue to evolve. Companies have increased their level of sophistication in communicating with one another from basic company-to-company connections to basic interactions to exchange information within a business community. Thanks to the advent of Web applications and suites, Web services and Service-oriented Architectures (SOA), closer community integrations are possible. The next frontier is to do more than interact. Companies strive to improve their business community management and gain the benefits of true multi-enterprise collaboration.
The challenge today is that most trading communities don’t simply need to become larger; they need to become more inclusive. But smaller partners, who may have the most to gain by eliminating manual processes and accelerating communications, often fall by the wayside in the rush to integrate. Either they can’t afford the initial costs of adopting collaborative technologies, or the complexity and organizational challenges of implementing and maintaining multiple lines of communication are too great. Yet it’s not just those partners who lose out as a result. Larger trading partners and channel masters must adopt hybrid communications strategies for their trading communities, using secondary channels and methods to do business with their smaller partners.
At the heart of multi-enterprise collaboration is a foundation that supports collaborative business applications so an organization and its business partners can exchange information over an intelligent network that provides real-time visibility from a process-centric, rather than data-centric, perspective. Unlike traditional value-added networks, which focus exclusively on moving data, this foundation should provide a real-time window into the status of business processes such as the order-to-cash cycle, thereby placing document and data flow in a business setting, resulting in increased efficiency within the organization and among business partners. Other requirements of this foundation include the ability to:
• Communicate securely with anyone, any way, regardless of protocols, application formats and preferred communication methods (from legacy to Internet-based)
• Seamlessly connect business partners to backend applications, and to enable delivery in whatever format required by business partners, regardless of the enterprise systems in place
• Deploy specific industry and business applications, functionality, and compliance capabilities that enable an organization to synchronize key information across its community
With this foundation in place, organizations can begin to truly manage their collaboration efforts. However, organizations can only manage what they can see. This creates a need for graphical dashboard views to keep an organization and its business partners up to date with real-time visibility, event-driven alerts and powerful reporting features. Most visibility tools treat a process as a stream of unassociated transactions. Visibility is only provided for an individual document without vision into the state of the rest of the process. To add “business” to these business processes, visibility tools need to display these transactions as a single long-running business process and provide status on each transaction as well as how they relate to each other within the process.
Let’s take the supply chain as an example of how this visibility can help business process management. Supply chain management has been an area of focus for many years. Most companies have invested heavily in ERP solutions to improve their processes, but, this effort has largely remained inside the four walls of the organization. This has pushed inventory out into the extended value chain. According to a 2004 AMR Research study, $1.2 trillion in inventory is trapped within the value chain in the United States alone.
How do we release that inventory? One way is to optimize the order-to-cash cycle through business process management. This cycle includes multiple documents, including a purchase order, acknowledgement, ship notice, invoice, and remittance advice. By viewing these transactions holistically, organizations can view the status of the business process while they’re in progress and track the performance of their partner community as a whole. Supplied with such timely business information, organizations can control not only their own business processes but also those in which they collaborate. This provides insight into these documents for the smaller suppliers for the first time. Resulting benefits include:
• Improved management of funds
• Prevention of document inconsistencies
• Reduced revenue loss and/or shipment delays
• Accurate and timely information
• Increased effectiveness of Accounts Receivable/Payable functions
• Reduced vulnerability to processing errors and confusion
• Reduced dependence on after-the-fact troubleshooting
• More control over the transaction sequence
By seeing business processes as they happen, an organization can manage them more effectively. These steps will help organizations gain unprecedented access to supply chain information critical to meeting customer demands, and other important operational requirements, resulting in new cost savings, process improvements, and a competitive advantage for their business.
Jim Aten is Vice President of Product Management, Infrastructure, for Sterling Commerce, one of the world’s largest providers of multi-enterprise collaboration software and services. Mr. Aten leads the overall product lifecycle and profit and loss management of the company’s B2B infrastructure products and services. Mr. Aten has over 25 years experience with technology management in a variety of software and manufacturing automation companies, including 6 years of prior service with Sterling. Prior to joining Sterling Commerce, Mr. Aten was Vice President of Infrastructure Services with Reynolds & Reynolds, a leading global provider of automotive retailer software and services. Mr. Aten received his Bachelor’s Degree in Engineering from The Citadel.