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Business Network Transformation and EDI Revisited

by Kevin Benedict

April 20, 2011

In today's world of multi-enterprise supply chains, 3PL (third party logistics providers) and discrete manufacturing environments, companies can no longer be satisfied with business processes that stop inside the four walls. These business processes are extended outside the four walls through various EDI and B2B messages that can be sent in real-time to their relevant business network partners. The visibility provided by real-time data exchanges ensures that management can make decisions based on accurate and timely information and analytics.

Often the ability to communicate and extend business processes to your business network partners is inhibited by out-dated EDI/B2B methodologies and strategies.  EDI and B2B data exchanges are more important today than ever before but need to be considered in a new light.  New and different strategies must be adopted to ensure that quick and cost effective methodologies are implemented that enable large numbers of new business network partners to be quickly added or changed as markets and products change.  Traditional, costly, multi-year on-boarding EDI projects have not well and are not the answer today.

In an article by Scott R. Sykes, Principal of Supply Chain Solutions at SAP America,  Understanding and Managing Supply Chain Risks, Sykes writes about companies taking greater risks nowadays with increasingly complex and extended supply chains.  Sykes describes them as follows, "Supply chains today are growing continuously more complex, interconnected, and global."  Extended supply chains are no longer the concern of one company but rather all participants.

For decades SAP has been focused on developing business s olutions that work together to form one large homogeneous ERP solution.  Much of this goal has been accomplished, and they now seem to be focusing significant amounts of attention on the next frontier - making one large homogeneousbusiness network.  This involves making it easier for their solutions to speak to the world.  This is likely the reason they initially partnered with and invested in both Hubwoo and Crossgate.

SAP solutions are fueled by business data.  SAP solutions both produce and consume business data.  The data required is not all self-generated.  Much of the business data is produced by external business network participants (trading partners) in the form of Purchase Orders and Invoices (just two examples of thousands of different business documents that are exchanged between business network participants).

Over the last decade we have all witnessed the transformation of SAP solutions from many disparate components, to an integrated system based on a defined set of standards and technologies.  The process of transforming a trading partner community into a homogeneous business network will follow a similar path.  Utilize a defined set of standards and technologies and organize them in a manner that can be cost effectively implemented in a reliable and seamless manner.

This week's announcement that Hubwoo and Crossgate have formed an alliance to, "combine their B2B networks so that enterprises can gain access to hundreds of thousands of active trading partners globally through a single connection" is a gia nt step toward SAP's vision of business network transformation.  This is relevant to SAP customers because SAP is a significant investor in both companies and resells both of their solutions.

Kevin R Benedict EDI and e-Invoicing Veteran, SAP Mentor, Analyst and Blogger 
Join the SAP EDI and SAP Information Interchange group on Linkedin: . 

*Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

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