Modern enterprises do not operate in a vacuum. Instead, they rely on trading partners in order to maintain their competitive edge. Nevertheless, business to business (B2B) integration is still sorely lacking in many cases, and this often prevents enterprises from truly being considered digital.
In fact, more than half of the information that business partners exchange is done manually rather than automatically. Silos of data and overly complicated linear processes are often the culprit, while each business’s unique applications are another stumbling block when it comes to the smooth exchange of information.
B2B integration has many benefits, including making it easier to enter new markets, add new trading partners and exchange information with customers and suppliers alike. It also reduces complexity and costs. In fact, some experts believe that the extent of a business’s B2B integration is a strong indication of just how close it is to becoming digital.
Most Enterprises Only Halfway There
A recent survey carried out by SCM World found that most businesses are near the middle of this journey, sitting in the analytical stage where they can aggregate and analyze supply and demand data to provide collaborative insight.
The next step on their path toward maturity is developing a responsive network. This can be done by integrating trading partners across multi-tier supply and demand networks.
The survey identified a number of benefits experienced by leaders at this stage. For example, 72 percent experienced a reduction of one fifth or more in their transaction processing costs. More than two thirds said they boosted their inventory turns from less than once per month to more than twice a month, while more than three fourths said they had decreased their days’ sales outstanding figures to under 60 days. They also noted a drop in the percent of orders that needed to expedited.
Once a business reaches the generative stage, it is likely to note profitable growth cycles thanks to full digital integration throughout its value chain.
This blog post was based off of an article from Supply Chain Digital. View the original here.