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The Changing World of EDI, B2B and Extended Supply Chains

The world of business and government compliance, and as a result EDI, is rapidly changing today. Solutions and methods that worked 5 years ago may not support the new reality of the market and government regulations. Companies are seeking greater consolidation, standardization, efficiencies and cost reductions. Management is evaluating every service to identify if it is a core service that is required to be provided internally, or is a candidate for outsourcing. The following changes in the market are impacting EDI and B2B operations in 2009:

  1. The rapid adoption of multi-enterprise supply chains add huge numbers of mappings, integrations and communications to a traditional trading partner community.
  2. These emerging requirements will require significant increases in the size and expense of the EDI/B2B department or a change of paradigms.
  3. Mergers and acquisitions are to be expected as the norm – IT staff and infrastructures must be preparted for many integrations and systems consolidation projects.
  4. Supply chains, logistics, customers, vendors, government regulation, markets and product lines are changing monthly and IT must be flexible enough to effectively support these changes.
  5. The traditional methods of on-boarding or rolling out new EDI and B2B trading partners in long multi-year implementations are far too slow and labor intensive.
  6. Standardized integration methodologies and technologies must be implemented to enable rapid on-boarding of EDI and B2B trading partners.
  7. Data and system harmonization must be accomplished. The semantics and syntax of data must be harmonized and normalized across the enterprise to enable rapid and accurate data integration projects.
  8. Expensive EDI infrastructures must be re-invented to reduce costs in these troubled economic times.
  9. More government regulations, VAT compliance and e-Invoicing requirements are to be expected.

Here is an example of one new government regulation in Mexico that will impact the EDI departments of companies with locations that invoice from Mexico.

  • In May 2009 the Mexican government will change the way companies can send paper invoices to customers. The new regulations require that companies using paper invoicing will now be required to obtain pre-printed invoice forms certified by the Servicio de Administracion Tributaria (SAT) or adopt a solution to send digitally signed invoices electronically to domestic and international customers.

The two excerpts below describe some of the many changes in the world of EDI and B2B that are impacting SAP users:

  • SAP customer Brown Forman had a steadily increasing backlog of EDI project requests, with each transaction requiring multiple weeks of internal effort, and increasing complexity associated with integrating trading partners in locations around the world. “Hiring new employees or training existing ones to include new global EDI requirements would have been cost-prohibitive for us because it would have been so resource-intensive,” said Kathy Pramik, Brown Forman’s AVP & Director of Enterprise Systems.
  • Due to recent acquisitions of various businesses, this Nemak’s operations around the world have more than doubled. As a result of this rapid expansion, the complexity and volume of EDI and B2B transactions has also increased. The company had various ERP solutions in place and multiple EDI and B2B platforms, teams and locations to support, with no centralization of EDI or B2B integration management.

Traditional EDI is hard work and takes a lot of time, focus and effort. SAP is listening  and has taken steps to address the changing market for EDI and B2B. They are standardizing EDI and B2B integration around Netweaver PI, Enterprise Services Repositories, Global Data Types and eSOA and delivering these out-of-the-box B2B services with upcoming enhancement packages.

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    • The first part of your comment raises an important question about content categories, RSS usage, and consumption preferences.  The second part is articulated in a way that needs to be substantiated, else it resonates as a personal attack.
      • Marilyn/Kevin,
        I apologise for the comments that came after a very frustrating afternoon trying to locate technical information on SDN. I've seen Kevin s posting on relevance and commented but I feel I should expand upon my earlier posting.

        Should SDN be for purely technical content and the BPX community for business/process related content? I'm a developer (you're probably aware of that by now) and I'm interested in technical content and Kevins postings, although interesting, don't meet those needs. Can we separate the content yet still maintain a link? I think we can and should do that. Other developers must feel the same way. I'm employed to do a specific job and need all the help I can get to do it. However, I need to grow as a developer and that is where content such as this may be of interest at a time when I want to view it.

        I hope I've gone some way to explaining my earlier comment and haven't offended anyone in the process.

        • Now we are cooking.  Glad you expanded your comment.  The debate you open (reopen) is an important one and you raise excellent points and responses to Kevin's next blog post: Separating BPX and SDN for Relevance?. I understand now that what you are asking for is to take the feedback and find a way to better enable your needs so that you are not drowned out with content that for you appears as "noise".  Real tagging, catergories, and enhanced usage of RSS feeds are part of the solution. I also get you want clearer and defined separation of content, including blog and forum postings. And lastly you want improved ways of searching for relevant content.  Now I can say thanks for your clear comments and requests and to Kevin who took the opportunity to engage with you.
  • Good point Robert.  How do we separate discussions between the business users and the technical users on these blogs?  I will not be any help to you on technical issues as I work in the business process design and strategy area.
  • I have to take this article in stride. I have heard from number of pundits that EDI and B2B "supposedly" died and become irrelevant for at least a 10 years now. Now, decade later this still widely used and very relevant process and technology for a lot of business across the world. I have being operated web-site dedicated to basic implementation patterns between SAP and EDI (  ), for about 4 years now, and I noticed spike in traffic in the past 18 month. So, this being purely empirical test, I see growth in demand EDI and B2B implementation. Now, I do have to agree with an author, at least in part, that technology is hard to implement, but only because the lack of understanding, strategic planning and leadership oversight. The last statement, is based on personal market place observation and over decade of experience...

    If your company is serious about supply chain optimization, EDI and B2B strategy is a must. Feel free to contact me and I will be more than happy to share information to jump-start your EDI program.

    Cheers and happy Optimizing!

    Sincerely, Max