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The networked economy has revolutionized the ways of conducting business and
has brought with it a plethora of new opportunities and challenges for
companies. All established companies not only face competition from traditional
powerhouses but also from new emerging companies, and must continue to
channelize their efforts in maximizing revenue opportunities and increasing
process efficiencies. According to the Gartner Group the total volume of B2B
transactions will exceed $7 trillion by 2004 -- a sustained annual growth rate
of 120%.
In the networked economy companies largely depend on strategic alliances with
their suppliers and partners to create value chains, which will provide them
with process-level integration among their commerce chain partners and enable
new value models for their company. In effect today companies realize the value
in conducting virtual, real time collaboration and trade with their commerce
chain over the web. Traditional ways of doing business, such as email, faxes
and voice mail introduce numerous delays and require data to be reentered into
multiple systems, multiple times. Hence, the need for dynamic
business-to-business (B2B) integration, which can automate business processes
that encompass a diverse range of packaged products, custom applications,
legacy applications and systems within the corporation and among partners.
The ability to develop viable B2B relationships and realize their potential
value in the shortest possible time is critical to the long-term success of the
enterprise. Indeed, no company can afford not to investigate how to efficiently
automate business processes with trading partners, lest they fall behind to new
competitors who can wield increased efficiency to improve margins or cut costs.
So, companies find great value in outsourcing their IT functions so they can
focus on their core competencies. By using the outsourcing model, companies are
able to leverage the experience and expertise of their technology partner to
their advantage, which results in developing a better product, faster and more
efficiently while maintaining economies of scale.
At the same time, companies continue to forge deeper relationships with their
customers. Customers expect to be informed every step along the way from
contact to completion of transaction. Rather than adding the costly human
resources that would traditionally be required for such service levels,
companies now invite customers to interact directly with their information
systems via automated email systems, self-service web sites and information
portals. Customers not only expect their interaction to be real time but also
to be personalized, presenting information that represents their specific
history with the company. In order to meet these demands businesses must be
able to automate business processes that span the entire extended enterprise.
In effect, they must be able to integrate their information systems and
applications with those of their suppliers, partners and customers reliably,
securely, and in real time.
The Business-to-Business Integration
Not surprisingly, this has led to a tremendous growth in B2B integration as
companies look for ways to automate and accelerate their business processes and
become e-businesses, responding to customer demands immediately and making
changes to their business dynamically as market opportunities shift.
Although businesses have operated EDI (Electronic Data Exchange) networks to
share data with partners for years, EDI has not become widespread because of
the limited functionality, complexity and high cost of implementation. Today,
with the widespread adoption of the Internet, there are newer technologies
which are enabling companies to more quickly accomplish the objectives of B2B
integration. By using open standards such as CORBA, COM, Java, XML and HTTP,
the speed and cost of implementation can be greatly reduced. This is important
not only for obvious economic reasons but because it encourages the so-called
"network effect" whereby more partners and suppliers will adopt B2B
integration technology, thereby increasing the value to all partners. All of
the modern approaches to integration use Internet technologies, though they
differ in their speed of implementation, support for standards, security,
reliability and scalability. Choosing the right e-business integration platform
will have major implications for a company's long-term competitive abilities.
Exchange of information between companies has to be based on a standard
protocol. Each company has interactions with many other companies and it would
not be practical to have to agree on a different protocol for each. XML
(eXtensible Markup Language) has become the de facto standard for defining
business documents that can be exchanged with partners. There are several
groups, such as RosettaNet, Electronic Business XML and BizTalk which are
defining standard XML documents and processes for specific industries. Your
business partners will need a standard and inexpensive way to participate in
B2B integration for it to be effective. In many cases, trading partners may
have their own investments in enterprise and B2B integration so you will need
to make sure that the solution you use is fully compatible with XML standards
and does not have proprietary extensions that would restrict your ability to
integrate with partners.
B2B integration significantly improves organizational performance by supporting
the key principles of business success:
Faster to market with new products and services
Improved customer service
Shorter sales cycle and streamlined sales process
Reduced operational costs
Reduced production costs
Lower inventory costs
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