Connecting Homes – The Ideal Multi-Enterprise Business Network
At the heart of any successful project is clear, open communication and seamless collaboration amongst all involved parties. Let’s start with a story.
My friend Andrea is building a house. She needs to ensure her house has water, gas, power, telecommunications and more to make it livable. She has some work to do to determine what is required, search for service providers, and contract the work out to different specialists. Andrea soon becomes overwhelmed with the amount of effort to manage all the different service providers.
She wishes she had a single point of contact who can manage all these requirements on her behalf – a single service which connects her to the power, gas, and water lines, provides a single invoice to pay, and finally, provides one phone number to call in case some of these items create any sort of headache.
How does this translate into the business world?
Let’s imagine that Andrea’s house is your company. Different lines of business have their own needs and require access to, or collaboration with, partners and suppliers. Perhaps you are part of a supply chain department that collaborates with material suppliers to share forecasts, orders, and inventory. Or part of a logistics team that works with freight forwarders and customs agents. Or you are in asset management and maintenance. Although today machines can connect to the maintenance service provider, this is yet another communication channel and business partner to manage.
All the individual departments use their own communication channels, processes, contracts, SLAs, onboarding, and support services, and, of course, have to deal with different contacts at different trading partners.
The result can be significant administrative overload and inconsistent, yet disruptive processes and as a potential consequence high need on safety stock and capacity.
Managing all points of communication can be challenging. Often, departmental silos arise and may result in inefficient and error-prone process.
But all of this alignment, communication and collaboration is necessary. Going back to the house analogy, nobody wants to sit at home in the dark without water and heat, right?
Looking at this complex structure, we need a new and better way of managing the ecosystem and network outside of our individual organization.
Let’s imagine unifying all your points of interaction – a network of trading partners and service providers that connect through a single channel to you or even directly to your back-end infrastructure (such as ERP, planning, or transportation management systems). Back to Andrea, the single channel means one point of contact to get her connected to gas, power, water. In your company single access means the end user to connect seamlessly to all external stakeholders, including suppliers, contract manufacturers, logistic service providers or maintenance service providers to collaborate on inventory, forecasts, orders, shipments, workorders, and more. In short, it provides a unified experience.
But what is a unified experience?
Unified experience means that there is a single integration method to connect to all your trading partners. It means eliminating sending of orders via 1:1 EDI or on premise portals; or managing forecast alignments with suppliers through excel shared via email; or resolving quality issues via phone. Instead, single access is highly automated and monitors exceptions, with a single way to manage resolutions.
Furthermore, organizations might want to add additional trading partners in different areas, or a group or even an existing network of trading partners that are not yet connected. This requires a unified onboarding experience for any kind of trading partners, for example suppliers and logistic service providers – and not different onboarding experiences for procurement, logistics, supply chain, etc.
To come back to the analogy of Andrea and her house, Andrea wants to simply switch on her coffee machine or any other electrical appliance and automatically leverage the best power service without having to deal with the complexity behind it. In business terms: continue to work in your well-known ERP, planning, PLM, or plant maintenance tool, but you have better data and are instantly connected to your trading partners.
This concept of a network of trading partners along with a unified experience reduces the complexity for your business, as well as for your partners. It allows all parties to focus on their core business of planning, buying and selling great services.
For many years, SAP promoted this idea of connecting trading partners across a network to collaborate seamlessly. There have been different networks for different business areas: procurement (Ariba Network), logistics (Logistic Business Network), and asset management (Asset Intelligence Network). These networks are now coming together. Earlier in 2021, SAP launched SAP Business Network, a unified network that harmonizes supply chains into a unified, collaborative, and intelligent network.
Components of SAP Business Network
In part 1 of our blog on business networks, we discussed how networks can help solve the complexities of collaborating with an ecosystem of trading partners. Let’s take a closer look at the components that make up a unified, collaborative, intelligent business network.
Community of Peers
Trading Partner Connectivity Options – Your trading partner community can connect through a variety of different ways, as the network supports a robust number of integration methods and document formats. For example, your vendor may have experience with a certain communication protocol, but wants to use Microsoft Excel for upload and download, or leverage a single Web UI giving them access to multiple of their customers.
SAP Business Network comes with all these types of connectivity options. This flexibility is one reason for the large number of trading partners currently transacting and running mission-critical processes via SAP Business Network every day.
Network of networks – Being connected does not mean only one singular network, run by a single software provider such as SAP. Different networks should rather be connected to each other. This is similar to your telecommunications provider, which interoperates naturally with its peers, to ensure you can call a friend who’s using a different provider than yourself. The same should apply to business networks, and the networks should also map the different languages, formats, and technologies, so you can stay with your single provider.
SAP Business Network interoperates with more than 50 partner networks, so millions of trading partners are already connected today.
Make onboarding easy – A unified and streamlined onboarding process is integral to adoption and fast time-to-value. When you reduce onboarding friction, it becomes much easier for your new trading partners, whether suppliers, logistic service providers, financial institutes, or maintenance service providers, to connect and collaborate with you. This does not only cover connecting them technically to the network, but also enabling them on certain collaboration processes such as forecast or work order collaboration.
SAP is bringing together its network onboarding teams and technologies to deliver a unified experience to its customers.
Stay connected and become better – Communities do not end with onboarding. Communities learn from each other and potentially adapt processes. Community means a constant exchange of best practices to become better together.
Being part of SAP Business Network allows you to exchange best practices with your peers to learn from each other.
There are many existing examples from thousands of trading partners connected via SAP Business Network. To learn more on how some of them are using the network for direct material supplier collaboration, listen to one of our customer best-practices webinars.
Once onboarded, information needs to flow in a smart way to not spam any of the trading partners and keep them focused on-business critical information.
Processes collaboration technically translates into the exchange of different types of documents, such as orders, shipments, forecasts, workorders etc. The single access described above should cover a large number of potential documents.
SAP Business Network supports the exchange of more than 200 types of documents. Each one can be adapted to the individual process needs.
Mappings / translation – Different trading partners might have different interpretations of processes and documents, yet they need to be translated and mapped. That is not only a technical effort, but also requires proper change management to avoid any misalignment.
SAP Business Network comes with mapping services and long-time experience with connecting different companies.
Business rules and validation – Collaboration doesn’t work without rules. Some examples of rules on SAP Business Network include: a customer confirms a certificate of analysis (CoA) before the supplier can create the advanced shipping notice (ASN). Otherwise, it means a quality issue has to be resolved before another order can be shipped. Handling units need to be respected, or invoices need to follow defined compliance criteria and match the local tax authority rules. Or it can simply mean a reminder is sent out in case a confirmation is expected.
All of the above rules reduce the complexity for the end user and ensure highly efficient collaboration.
Collaboration should be a highly automated process, meaning no order which is confirmed as expected or within the defined threshold should reach the end-user’s desk. But of course, in case there are exceptions or deviations, this needs to be manually assessed and acted upon.
SAP Business Network comes with deviation reporting as part of a supply chain disruption monitor.
SAP Business Network allows you to get into a very structured individual person-to-person exchange, with the network keeping track of the conversation and allowing you to manage the documents required to resolve a situation along with the conversation.
SAP Business Network leverages a vast amount of data to provide you with meaningful and actionable insights.
Big Data – If you think about the mass of information that flows through the network every minute, you can imagine how valuable these insights might be. But we also need technology to make sense out of that data.
Analytics – The data needs to be filtered and presented to the end user in a consumable way.
Artificial Intelligence – Think about a supplier who confirms an order. Although the request day is December 10, the supplier says they can confirm delivery on December 11. However, an algorithm has learned from past orders that the supplier always delivers 3 days later, or 4 days later if there is a weekend in between, or even 5 days later if delivery is going through a certain harbor. In addition, the delivery date usually also differs between summer and winter. All of the above information is available, and this algorithm can suggest an expected delivery on December 15, not December 10. Finally, the end-user must decide which of the dates – the one from the supplier or the one from the algorithm – is the most reliable, and plan accordingly.
The above is just an example of how intelligence works when organizations connect to SAP Business Network today.
It’s SAP’s vision to be the one place in the cloud where customers can manage trading partner interactions, removing the complexity to enable users to focus on their core work, with better data and guidance through the process and data jungle.
With respect to my friend Andrea and her new home, she is still waiting for a single point of contact to complete all of her utility installations. Let’s wish her the best of luck!
But you don’t have wait for better trading partner collaboration. Most of the components described above are already available today in SAP Business Network. And SAP is committed to heavily investing in the future of a unified SAP Business Network.
In the meantime, join us on September 21 at 10 am EDT for a live discussion on network-based supplier collaboration.