Dynamic EDI & B2B in SAP Environments Using Netweaver Integrations

Today's IT environment is not the same as it was 10 years ago. The market place, global supply chains, outsourced IT, 3PLs, distribution models, outsourced manufacturing and a challenging economic climate ensure that everything is different, rapidly changing, dynamic and unpredictable. The only thing you can be sure of is change. Companies can no longer make 5 year plans and invest in IT infrastructures that will work only for today's business model and business plan. Management is unwilling to commit to that future horizon. The business world is changing too fast. The following factors ensure change:

• Deregulation
• Globalization
• Technology evolutions
• Commoditization
• Economic instability

Today's IT environment must be built to rapidly adapt. It must be dynamic in nature or it could quickly be an inhibitor to your business success rather than a benefit. In the world of EDI and B2B the traditional approach involved purchasing expensive software, training, consultants and VANS and beginning slow multi-year integration with trading partners. That approach does not meet the demands and requirements of today's business. Multi-year EDI and B2B implementations that are designed to meet one set of business processes are unlikely to be completed before the business process changes.

In today's world, EDI and B2B must be an extension of your ERP and the associated business processes. Changes demanded by your business must be able to be quickly supported end-to-end from your customers to your suppliers, 3PLs and partners. Maturing technology, business and communication standards now make this vision possible.

In the past, EDI and B2B systems were silos of third-party technology that were difficult, expensive and slow to integrate. They were disassociated with your core ERP. They required their own projects, skill sets, staff, training and hardware. They worked independently from your ERP and business processes and required herculean integration efforts. They were a separate entity with a life and cost of their own. That model will not survive in today's world. Companies that have this environment today are likely researching alternatives that are more ERP-centric.

Changes to your business processes and business models should include the ability to make rapid and dynamic changes to your EDI and B2B messages and communications. SAP calls this strategy, Business Network Transformation and has adopted a strategy of using the SAP Netweaver platform and its eSOA strategy to assist here. They invested in an SAP Netweaver based automated business exchange (EDI/B2B managed services company) that enables rapid and dynamic integrations and EDI and B2B implementations for SAP customers. SAP users can connect to this automated business exchange via Netweaver-to-Netweaver connections, IDocs, and tRFC.

SAP is now creating "service extensions" to the most common business processes:

• SNC - Supplier Network Collaboration
• TMS - Transporation Management
• Orders to Cash
• Procure to Pay
• etc.

These service extensions enable EDI and B2B communications with trading partners to be simply activated in an on-demand model. This is a different paradigm for EDI and B2B that is SAP ERP-centric. This model has many advantages over traditional EDI:

• No hardware required
• No integration scripts
• No integration development projects
• No multi-year EDI roll-out projects
• Quick activation and implementations
• Rapid and dynamic changes
• Fixed fee based manage services

In addition, since this is an SAP centric approach, SAP already knows what data is both consumed and produced by their applications and supported business processes. This enables integrations to often be pre-built in the automated business exchange which saves a great deal of time and money for the company utilizing it.

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SAP and e-Invoicing - The Value of Time and Money

There has been an interesting trend this quarter with companies looking to implement e-invoicing initiatives. In the past, when companies considered converting paper-based invoices to electronic invoices they sought to reduce the costs of manually processing both inbound and outbound paper invoices. The reductions companies were looking for were usually the followings:

• Reduced paper costs


• Reduced printing costs


• Reduced handling costs


• Reduced postal costs


• Reduced DSO - (days sales outstanding) with outbound e-Invoicing


• Reduced payment processing costs


• Reduced data entry costs (entering payment information from paper)


• Reduced data entry errors


• Reduced billing disputes


• Reduced paper storage

Lately, we have seen the following goals added to the above list:

• ensure compliance with regional tax regulations


• simplify the process and reduce the complexity and high costs of supporting e-invoicing globally


• focus internal employees on core business processes, not global EDI compliance

These additions relate to confidence, peace of mind, focus and risk management. It seems that companies are increasing the priority of these issues. I believe that reduced budgets, less staff, and challenging market conditions have forced these issues to the fore front.

These issues are not easily solved internally with today's budgets. I am seeing an increased interest from companies to outsource e-Invoicing initiatives to e-Invoicing experts that operate managed services companies that focus on this area.

It appears that companies are closely evaluating each process and internal department to better understand if the services required and provided can be more cost effectively and efficiently supplied externally by subject matter experts. When there is less staff the value of each member to the company is likely to increase. Companies will want to focus these valuable members on the most productive and strategic projects and initiatives. They can not afford to assign expensive and valuable staff members to routine or non-core projects. For this reason, global e-invoicing seems to be an in-demand service for managed services providers.

SAP users have an advantage in this area. SAP is the co-owner of a managed services company called Crossgate that provides global e-Invoicing services for SAP users utilizing SAP's Netweaver platform.

Multi-national companies that must support e-Invoicing in many different geographies must find ways to ensure compliance with all of the various tax authorities. South America, Mexico and EMEA are very different from each other. Companies must either staff up to support these areas and requirements or find an expert to provide these services.

• Brown Forman, the USA's largest distributor of spirits and wines, describes how they addressed these issues in this article.
• SAP is working with OpenText and Crossgate to provide solutions and managed services for helping companies deal with global e-invoicing requirements as discussed in this article.
• Many countries around the world have evolving requirements for e-Invoicing like the new requirements in Mexico which are described in this article.

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Contract Manufacturing, SAP, EDI and B2B

I am working with a large multi-national high tech manufacturer that has a need to add a large number of EDI and B2B connections to a new and evolving group of trading partners. Their motivation is their increasing use of contract manufacturers and the adoption of new distribution, support and sales models.

Mark Schenecker, with the SAP High Tech Industry Business Unit, speaks about these kinds of environments and issues as needing an "agile" IT model. A business and IT model that enables companies to rapidly address changing business, sales, distribution, support and marketing models.

I am a former EDI Manager. As such, we were involved in lengthy, multi-year EDI implementation projects. Now days, this is not acceptable or workable. A new model is required that can enable companies to add and subtract supply chains, distribution channels and logistics companies in days or weeks.

SAP has developed a new model for SAP customers to implement and support EDI and B2B needs. This new model, is often referred to as "Business Network Transformation" and supports the on-demand implementation of large numbers of EDI and B2B trading partners through an Automated Business Exchange that is co-owned by SAP called Crossgate. This automated business exchange uses Netweaver and other SAP technology to simplify EDI implementations and support for SAP customers.

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EDI, B2B Strategies http://b2b-bpo.blogspot.com/
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SAP Users are Outsourcing EDI/B2B to Crossgate

Last week I spent some time onsite with a large SAP customer discussing their plans for EDI and B2B. They, like everyone else, have had to reduce their IT staff and slow down their IT plans and ambitions over the past year. They were, however, very interested in looking at the new model for supporting EDI and B2B requirements that is being promoted by SAP and Crossgate. Why? They have an increasing number of EDI relationships that need to be implemented and supported, but less budget and staff to dedicate to it.

This model, that SAP often calls "Business Network Transformation" utilizes Netweaver (when available) or IDocs and/or tRFC to connect with Crossgate's EDI and B2B Hub that also utilizes Netweaver. Crossgate then takes care of all EDI and B2B mapping, integration, trading partner implementations, operations and support for a simple one time set-up fee and then low monthly support fees. This managed service frees up the IT staff to focus on core SAP related projects while Crossgate manages all external trading partner communications.



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EDI, B2B Strategies http://b2b-bpo.blogspot.com/
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Business Process Improvements vs. Product Purchases

I had lunch with a team last week that worked for a large commercial truck manufacturer. They said they have been focusing their IT efforts on business process improvements, rather than purchasing new products and services. He said many business process issues had been ignored in favor of throwing more technology and solutions at the problem in the past, however, in today's climate they are looking at actually improving the processes.

This was an interesting discussion and got me thinking. Not every problem needs a new layer in the technology stack to fix it. Many companies that I have been working with lately are looking to consolidate on less technology, not more.

Today I spoke with a company with multiple ERPs and multiple EDI systems. Again, many of their process problems were the result of trying to support too many different complex technology environments. Their goals for 2009 and 2010 were to standardize, simplify and consolidate IT environments and technology stacks.

SAP customers who are looking to consolidate on an SAP instance, often contact SAP to ask how to additionally consolidate B2B and EDI systems and processes at the same time. The following 2 articles discuss this topic.

• SAP-centric EDI/B2B - http://b2b-bpo.blogspot.com/2009/03/what-does-it-mean-to-have-sap-centric.html
• SAP Netweaver Approach to EDI - http://b2b-bpo.blogspot.com/2009/04/new-edi-approach-for-sap-netweaver.html

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EDI, B2B Strategies http://b2b-bpo.blogspot.com/
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New EDI Approach for SAP NetWeaver® Process Integration Users

This is a very interesting article that describes SAP's new strategy for supporting EDI and B2B requirements in a NetWeaver-centric manner through their investment in Crossgate, an EDI and B2B exchange that SAP now co-owns. This network approach and adoption of cloud computing strategies brings a new twist to traditional EDI.

Atlanta, Georgia, April 7, 2009 –Crossgate Inc., the global expert in business-to-business integration (B2B), continues to grow its customer base by offering an alternative deployment strategy through a fixed-cost EDI and B2B managed service.

In light of recent economic uncertainties around the world, many companies are keeping a closer eye on operating expenses and trimming budgets by finding ways to consolidate business processes. For SAP customers, the clear answer to integrating internal and external processes is SAP NetWeaver Process Integration (SAP NetWeaver PI).

More than 3,000 organizations have decided to use the SAP NetWeaver PI offering as their business-oriented SOA middleware to perform application-to-application (A2A) and business-to-business (EDI and B2B) integration across a business network. It includes an Enterprise Services Repository, an enterprise services bus, pre-packaged integration templates, and technical and application adaptors to support end-to-end process integration.

SAP NetWeaver PI goes beyond a pure technology focus with pre-packaged business integration templates such as integration scenarios, process components, interface description and global data types…etc. to reduce organizations’ integration TCO, enabling customers to focus on the integrated business results.

By leveraging SAP’s existing co-ownership and Business Process Outsourcing (BPO) relationship with Crossgate, SAP NetWeaver PI customers can also choose an on demand EDI approach for B2B integration that does not require additional investments in building mappings, software, servers or hiring staff to maintain trading partner connectivity.

Crossgate B2B360 Services Powered by SAP® opens the door to more than 40,000 business partners that are pre-integrated in Crossgate’s Business-Ready Network. For customers dealing with global customer and government requests, this EDI managed service provides the perfect complement to address line of business initiatives while operating under tighter budgets and hiring restrictions.

Most IT executives are tasked with ‘doing more with less.’ This alternative approach to EDI maintains an SAP-compliant strategy while reducing the current and ongoing costs of supporting ever-changing B2B requirements. Crossgate B2B360 Services Powered by SAP addresses the key issues found with traditional in-house EDI and B2B integration development.

Instead of providing only generic B2B data standards such as ANSI X12 and EDIFACT, along with mapping toolsets, this managed services approach to EDI includes partner-specific mappings, communications, and business processes. More importantly, the interface with Crossgate is fully aligned with SAP NetWeaver and Service-oriented Architecture. And unlike in-house B2B solutions where time and materials costs can quickly skyrocket out of control, Crossgate’s business model offers fixed-price predictability.

B2B360 Services Powered by SAP also provides turnkey service extensions for SAP ERP, SAP Business All-In-One, SAP Business ByDesign, SAP Supply Network Collaboration, SAP Transportation Management, and a variety of other SAP solutions. Crossgate’s fully integrated, fixed-cost solution will help customers improve productivity, address global e-business mandates, and increase organizational agility so they can meet business challenges both now and in the future.

To date, 47 customers in various industries and geographical locations have contracted for Crossgate’s B2B360 Services Powered by SAP, and that number continues to grow. “2.7 new customers every working day choose SAP NetWeaver PI to help them integrate their processes across application and business partner network without being mired in technical integration hurdles,” says Ken Tsai, Director, Enterprise Solution Marketing, SAP NetWeaver PI. “With SAP’s relationship with Crossgate (SAP is a co-owner), customers can continue to enjoy the same benefit of business-oriented integration through a managed services approach to EDI that allows them to simplify partner on-boarding and enablementprocess.”

If you would like to discuss any of these subjects in more detail please email me.
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EDI, B2B Strategies http://www.blogger.com/b2b-bpo.blogspot.com/
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