Involvement of business partners and customers in the operational processes is mandatory for today’s business performance efficiency. In this write-up, we will discuss on why real time partner integrations are imperative to generate quality of products and how that improves business performance. Also this write-up gives an introduction on the various integration solutions, the challenges faced and how to overcome those challenges. Fundamentally, any partner or customer’s contribution in operational processes can be achieved through an integration approach traditionally called as B2B integration. This can be achieved by various approaches.
Challenges faced by B2B Integration Solution
- Integration over network is complex: Any Integration solutions have to transport data from one system to another across networks. Compared to a process running on a single computer, distributed computing has to be prepared to deal with a much larger set of network problems. Often times, partner to be integrated are separated by continents and data between them has to travel through phone-lines, WAN segments, routers, switches, internet networks, and satellite links. Any failure might trigger business outage.
- Data Security: Sending data across a network must be secured enough for data integrity and theft. Designing a widely distributed integration solution the same way you would approach a single application could have disastrous consequences.
- Source and Targets are different: B2B Integration solutions need to transmit information between internal systems and partner’ systems that might use different programming languages, operating platforms, and data formats. An integration solution needs to be able to interface with all kind of technologies.
- Change is inevitable: Business Applications or partners might change over time. An integration solution has to keep pace with changes in the applications it connects. Integration solutions can easily get caught in an avalanche effect of changes – if one system or partner changes, all other systems may be affected. An integration solution needs to minimize the dependencies from one system or partner to another by using loose coupling.
How to overcome the challenges
The below three key architecture approaches can be used to overcome those B2B challenges by real time integration,
- Messaging: One business application or partner publishes a message to a common message channel. Other business applications or partner can read the message from the channel at a later time. This message can be in EDI format so that all Partners and Business process need not worry about the message standardization. But the communication should be asynchronous. There are various middleware integration software’s available for such EDI messaging. Even though the communication is asynchronous, it should be happening near-time to exchange most valuable information at transaction level. This helps to prevent tight binding between systems or partners.
- EDI (Electronic Data Interchange): provides Business processes with an efficient tool for the automatic transmission of business data with Partners. EDI has a standard electronic format which is predefined. Both Business and Trading partners need to follow the format defined in the EDI while exchanging EDI documents. However instead of going through batch model of EDI transactions, business system should adopt transaction EDI with real-time processing.
- Services over Internet: The most efficient model of real-time partner integration should be through Service Oriented Architecture (SOA). Exposing business system functionality over internet should give opportunity for business partners to send message to the business systems at true real-time. This approach helps to align the processes within few mins of information exchange. However this might appear as tight binding and business outage; this constraint can be overcome by better design patterns.
Real-time Partner integration to Grow Your business
Many enterprises are under pressure to become much more responsive to customer needs or to reduce costs. When a process is entirely under the control of a single enterprise, speeding up cycle is straightforward, but not simple. The problem of improving customer responsiveness is more significant when an enterprise controls only a piece of a larger process, yet the cycle time of the end to end process needs to be faster.
In manufacturing industry, there is a need to reduce the cost of inventory, particularly where demand is volatile. When there is adoption of dynamic demand planning applications, upstream manufacturers are being asked to be more agile. Manufacturer needs to receive order data in real time from its partners and synchronizes that data with its assembly line to configure products on demand as they are assembled. Partner and Manufacturer need to communicate in real time to keep the partners demand process and manufacturer’s assembly processes synchronized.
In Healthcare industry, when the patient provides the hospital with insurance information, the registration system sends a transaction to the B2B gateway and, from there, to the appropriate clearing house or payer organization. The insurer verifies the information, approves coverage, and provides eligibility and co-payment information or other limitations. The B2B gateway maps this verification and sends a transaction back to the registration system.
All of this happens in near real time during the registration process while the patient waits to be admitted. Based on the insurer’s response, the hospital can explain at registration what is covered and what isn’t covered and ask for the patient to provide a credit card or some other means to pay what isn’t covered by insurance. By improving the cycle time on patient eligibility, the hospital was able to reduce the number of accounts receivable days from the payer as well as improve the rate of collections from patients.
In Retail industry, by moving from a batch-oriented architecture to a real-time architecture, the monitor’s central processing cycles runs every 15 minutes as opposed to every 6 hours. This has expedited the process behind identifying exceptions and taking action to recover from them. This retailer has also benefited because it was able to manage a leaner inventory. By keeping safety inventory at a minimum, the large retailer was able to cut overhead costs and at the same time improve its fulfillment process.
The need for faster cycle times across a multi enterprise process spans multiple industries and multiple process domains. By exchanging messages real time with their partners, the enterprises were able to reduce cycle times to respond in seconds or minutes. Depending on the business objective, each of these enterprises was able to win new business, gain better control over costs, or respond more quickly to adjustments in demand.
Real time Partner integration helps to grow business
- Availability of Data: Once the message is received, it is immediately ready for use with other internal application.
- Increased speed of transmission: Large volumes of commercial data can be communicated from one computer to another in a matter of minutes, enabling faster response. Paper documents may take days to transport from one location to another, while manual processing methodologies necessitate steps like keying and filing that are rendered unnecessary through EDI.
- Improved accuracy – Eliminates the errors resulting from manual data input/manual file transfers. All data moved electronically has likely passed through a validation layer, resulting in a decrease in costly charge back’s.
- Supply Chain Management: Increase trading partner relationships with improved efficiencies in Supply Chain Management. By agreeing on how EDI documents will be sent and received with the trading partner, will strengthen customer’s satisfaction.
- Planning and Processing: Allows suppliers to process orders more quickly and schedule shipments accordingly allowing the manufacturer to anticipate and schedule tasks in advance.
- Information Access: Permit users access to a vast amount of detailed transaction data in a timely fashion. In a non-EDI environment, in which information is held in offices and file cabinets, such dissemination of information is possible only with great effort, and it cannot hope to match an EDI system’s timeliness. Because EDI data is already in computer-retrievable form, it is subject to automated processing and analysis. It also requires far less storage space.
- Better logistics management and increased productivity – Enables to better manage and control production, purchasing and delivery requirements. EDI is a key component of just in time manufacturing and quick response customer supplier links, resulting in significant reductions in inventory levels, out-of-stock items and returns of goods.
- Cost efficiency – Significantly reducing the volume of paper to be handled and re-keyed, results in immediate savings in administrative and personnel costs. Staff can be redeployed to other more value added functions within the organization.
Today business agility is the most important capability to enhance the performance of business. The growth of your business is relay on the efficiency of your business operations. Partner or Supplier involvements in real-time with your operational processes will help to accelerate the business performance.
Note: The above article is authored by Mr.Arun Mathew from Enterprise Integration & Information Management Practice @ Aspire Systems.
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