EDI Problems and SAP Upgrades

I read two interesting numbers from AMR research today on EDI and EDI projects.

1. AMR research confirms that 84% of manufacturers experience a delay in ERP projects due to B2B integration issues. These ERP project delays can cost multi-billion dollar companies an average of $50,000 per day.
2. A recent AMR study confirms that over one-third of all data in ERP applications originates from external trading partners: customers, suppliers, third-party logistics providers and financial institutions.

Both of these numbers simply point to the importance of electronic data exchanges. Since one-third of the data coming into an ERP is commonly coming in via electronic data exchanges from trading partners, then any break in this system can cause massive problems. One common break point is an ERP upgrade.

SAP upgrades often break the legacy customized integration scripts that have been programmed over the past few decades. If the time to rebuild these integration scripts was not factored into the project plan, you are bound to suffer delays.

One of the solutions now available is using the SAP Information Interchange (SII) to process all of your EDI and B2B needs. The SII (a hosted EDI/B2B exchange) is SAP's solution for processing all EDI/B2B needs for the SAP user community. One of the benefits is that integration between the SII hub and the SAP ERP is simply a standardized one time set-up for each business process. Not dozens of different custom integration scripts for all the various formats of a purchase order or other B2B message. Since the SII hub also uses NetWeaver, many SAP users can simply plug-in using a NetWeaver-to-NetWeaver integration scenario. For those not using NetWeaver, simple IDoc or tRFC connections are easily implemented.

The bottom line is that you can abstract the EDI system from the ERP and integrate them with standardized integrations that are pre-defined and painless. As a result, any future upgrades to your ERP will not break thousands of custom integration scripts. The process would simply involve testing one standardized integration per business process. Since this is a quick and simple process no delays in future upgrades are anticipated as a result of your EDI/B2B environment.

If you are interested in the subject of SAP EDI/B2B and SAP's new SAP Information Interchange, then please consider joining the Linkedin Group called SAP EDI and SAP Information Interchange.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.netcentric-strategies.com
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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More on Brazil's NF-e (electronic bill of lading) Requirements

Under Brazilian law, the NF-e is replacing the conventional, hard-copy nota fiscals (bill of lading)with an electronic counterpart which must be digitally signed and shaped into a particular government specified XML format. For many organizations this switch must be accomplished by April 1, 2010.

Brazil has put in place a different and far more involved electronic bill of lading requirement than other countries. The implementation of NF-e requires real-time reporting to the Ministry of Finance (SEFAZ), which then issues an electronic authorization (along with a bar code) that must be included on the printed paper Bill of Lading which accompanies the product delivery. This is in contrast to the requirements of most countries (see Mexico e-Invoicing) that only require reporting at the end of certain date ranges like months or quarters. Let's discuss this point in more detail.

Under these new requirements a company receives an order from a customer and must prepare a bill of lading in the SEFAZ designated XML format, submit to SEFAZ and receive an electronic authorization which must be added to the bill of lading and then printed before the product is shipped and sent with the product delivery. The term "before shipped" is important. There must be a real time electronic exchange of data that goes to SEFAZ, and an electronic authorization returned before it leaves the warehouse.

If the delivery truck is stopped by the police, the bill of lading can be scanned with a police bar code scanner which queries SAFAZ electronic authorization database and identifies the products associated with it. This must match or you are in big trouble.

Think about the IT infrastructure that must be in place to support these real-time interactions between ERPs and SEFAZ! These processes are new, different and unique and are not supported in traditional ERPs. Most companies will be searching for a managed B2B service that can perform these functions (send and receive the appropriate XML and follow the designated rules and processes defined by SEFAZ) and integrate with their existing IT infrastructures.

SAP and Crossgate (Crossgate is co-owned by SAP) have this service already in place and in production for SAP users. For more information and webinar schedules click here.

A related article:

• SAP Support for Brazilian e-Invoicing - Nota Fiscal Electronica (NF-e)
• Mexico e-Invoicing, Beyond the Basics
• Implementing e-Invoicing
• Electronic Invoicing in Mexico
• e-Invoicing Requirements for Mexico

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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New Report Data Supports Need for SAP Information Interchange

According to a recently published Forrester study, as little as 19 percent of enterprises (with more than $1 billion per year in revenue) conduct EDI or other B2B e-commerce with more than 80 percent of their communities. My apologies in advance for being mathematically challenged, but I think these numbers mean the following:

• 81 percent of companies with $1 billion and more in revenue do not use EDI or B2B e-commerce with 20 percent or more of their trading partners...is that right? Or another way of saying it - less than 20% of large companies can implement EDI/B2B with 80% or more of their trading partners. My guess is that companies with less than $1 billion have an even smaller percentage of trading partners exchanging data via EDI.

Forrester also reports that nearly 85 percent of respondents (300 companies) currently use some form of B2B e-commerce services, versus software, in their B2B environments. That is an interesting number to me. I thought there would be more of a battle between the internal EDI department and outsourced EDI managed services - it appears companies are widely accepting outsourced EDI managed services.

Forty-six percent of respondents, according to Forrester, plan on putting more focus on services-based transport for B2B in the next three years. This number bodes well for solutions like the SAP Information Interchange that offers EDI as a managed service to the SAP community.

Why are companies moving toward EDI and B2B managed services? Forrester says companies are looking to reduce costs, convert more paper to electronic document exchanges and improve visibility into the business.

In summary, large amounts of expensive paper documents continue to be mailed and manually processed even within large enterprises with legacy EDI systems and infrastructures. There is a huge need for more EDI and B2B implementations and companies are increasingly turning to EDI/B2B managed services to solve this problem.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.netcentric-strategies.com
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP Information Interchange for Existing EDI Users

Many companies have been operating legacy EDI environments for decades and have long ago captured their expected ROIs. What value then would SAP's new SAP Information Interchange (SII) for EDI/B2B managed services offer them?

In my opinion, if you have hundreds and thousands of connected EDI trading partners running efficiently on a well managed EDI system today, then there is not a great deal of motivation to change. However, if any of the following exist, then it may be a good time to re-think your approach to EDI:

• Mergers and Acquisitions - If an IT department must absorb, consolidate, downsize or transfer IT responsibilities, it would be a good time to look at new and more efficient ways of supporting these activities.
• Annual support and maintenance renewals are required by your legacy EDI vendor - and the high cost forces you to reconsider your current EDI processes.
• High upgrade costs are required by your legacy EDI vendor in order to support new processes.
• There is a corporate mandate to reduce third party software applications and standardize on SAP whenever possible. Utilizing the SAP Information Interchange would enable the IT department to eliminate third party legacy EDI software systems and IT infrastructures and simply plug-in to the SII for EDI managed services.
• Shared services centers are embraced by your company and EDI is an ideal shared service. It can be shared not just with internal departments, but with the entire SAP community to reduce costs and share trading partner connections.
• Large trading partner implementation projects are being planned. EDI implementations are hard work that often involve multi-year efforts. This may not be the best use of internal IT resources. See the articles listed below for more details on EDI implementations.
• SAP upgrades often disable existing EDI integration scripts. This often requires significant IT development efforts to rebuild and reconnect legacy EDI systems. This is a good time to ponder your costs and approach to EDI.

Staffing Resources Required to Implement EDI

The Process of Implementing EDI and B2B

EDI Message Implementation Information for SAP Users

EDI & B2B Relationship Management for SAP Users

The Impact SAP Upgrades Have on EDI and B2B Operations

Challenges to EDI, B2B, Business Network Transformation and Supply Chain Collaborations

SAP's field sales and pre-sales teams can answer additional questions.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.netcentric-strategies.com
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Cloud Computing, EDI and SAP Information Interchange

The SAP Information Interchange (SII) is a big step forward into the cloud computing arena for SAP. All of the components of this service including managed services, EDI infrastructure, servers, connectivity, data mappings, standards support and helpdesk reside in the cloud. As a hub this makes perfect sense. Unlike legacy EDI systems that are located inside the IT infrastructure of one just one specific SAP customer, this solution operates in the cloud for the entire community of SAP users.

Let's consider five SAP customers. In a traditional EDI model, each of the five SAP customers would need to fund and implement their own legacy EDI system, purchase servers, plus hire EDI experts to start long multi-year trading partner implementation projects. Today with SII none of the SAP customers would need to invest in EDI infrastructure, servers or hire additional resources.

When electricity first became important to manufacturing, all factories purchased and installed their own electrical generating power plants. However, once this utility was available on the street out front, they simply connected to the service as it was an ideal "shared service" and the costs of building, operating and maintaining the infrastructure could be shared by the community. I see the SAP Information Interchange in much the same way today.

Cloud computing is perfect in a B2B scenario. It is the SAP community's SSC (shared service center) for EDI/B2B. Costs are lowered, reusability across the community is emphasized, and the support systems are set up to provide services to the entire community for less than companies could operate and support it internally.

All trading partners are registered and their unique maps and data formats are set-up once and loaded into a repository for reuse by other members of the SII hub. Integration with SAP can be standardized as far as possible, and custom integrations can be documented and stored for reuse by other hub members.

SII is a good example of the value of a solution in a cloud computing environment. Everyone in EDI agrees it is a good idea to reuse maps and integration scripts when possible. Everyone agrees it is good to capture efficiencies and lower costs. Everyone agrees that utilizing standards in as many areas as possible increases efficiencies. Everyone agrees that making EDI implementations faster is a good thing. SII is a good start in this direction.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP Support for Brazilian e-Invoicing - Nota Fiscal Electronica (NF-e)

April 1, 2010, is the deadline for many Brazilian companies to support the tough new requirements for e-Invoicing called Nota Fiscal Electronica. SAP's co-owned e-Invoicing and EDI exchange, Crossgate provides support for these requirements for all SAP customers. Here are the details:

SaaS-based, Brazil Nota Fiscal Eletronica service allows companies to meet April 1st, 2010 Mandates

Atlanta, Georgia, Crossgate Inc., the global expert in EDI and business-to-business integration (B2B), has extended the coverage of its on demand B2B services to help customers meet upcoming April 1st 2010 mandates by providing a turn-key Nota Fiscal Eletronica (NF-e) service.

[Remember, SAP co-owns Crossgate and has recently announced that SAP will resell Crossgate's global EDI managed services under the name SAP Information Interchange by Crossgate through the SAP sales organization...read more here]

Under Brazilian law, the NF-e is replacing the conventional, hard-copy nota fiscals with an electronic counterpart which must be digitally signed and shaped into a particular government specified XML format. For many organizations this switch must be accomplished by April, 2010. Crossgate’s on demand NF-e solution is the fastest and most reliable way to meet these quickly approaching deadlines.

Since most organizations are not equipped to comply with such extensive regulation, there is a huge need for companies operating in Brazil to find extensions to their IT systems to handle these requirements. In order to avoid potential non-compliance fines and potential implementation delays, many companies find it best to leverage a service provider to manage the traffic flow as an outsourced service. With the assistance of Crossgate, organizations now have a partner that handles the responsibility for converting, signing, archiving and monitoring the integration with the SEFAZ. Crossgate’s On Demand NF-e Service includes:

· Fully complies with the Nota Fiscal Eletronica initiatives
· Real-Time integration with SEFAZ
· Fully integrated with SAP® R/3
· Eliminates expensive ERP Augmentations
· Turn-key enablement, investment protection, meet the April 1, 2010, mandate
· One on-demand service that supports over 38 countries in the EU and Latin America

According to Scott Lewin, President, Crossgate, Inc., “Brazil has certainly the most stringent set of requirements in global e-Invoicing today and the upcoming April 1, 2010, mandate is only adding to the complexity. Regulatory compliance efforts such as Nota Fiscal are often seen as being time-consuming and difficult, but Crossgate’s B2B 360 services and market leading e-Invoicing Network make it easy for organizations to comply with local Tax Authority mandates in over 38 countries.”

Crossgate also supports the Mexico e-Invoicing requirements for SAP customers.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP EDI, Cloud Computing and Business Networks

SAP currently serves the largest network of businesses in the world. Over 89,000 organizations utilize SAP technology to run their businesses. Upwards of 70% of the world’s economy is executed by organizations running SAP Applications. I am impressed.

IDC's Research Director of Enterprise Applications, Albert Pang stated, "We have reached a stage where a number of tech vendors, including SAP, have amassed enough of a base of customers and business partners that could really reshape how companies are going to be implementing the next generation of business applications.

SAP II (SAP Information Interchange by Crossgate) is a very intriguing concept. It is a centralized EDI and B2B hub that all SAP users worldwide can connect with to exchange EDI and other electronic business documents.

SII has similarities to Linkedin. Individuals do not need to understand the technology underneath the covers, rather they simply invite other people to connect with them. That is the vision and reality of SII. Companies can simply subscribe to the service and invite their trading partner communities to connect via SII to exchange EDI and other electronic data files.

The power of a connected business network is immense. Each time a new company connects a business process to SII it adds to the global repository. These connections are saved, published and made available to the rest of the SAP community. This, of course, removes the decades old problem that has plagued EDI. That is the problem of no reusability of maps or connections.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Gartner on SAP EDI - SAP Information Interchange

Gartner just issued their opinion on the new SAP Information Interchange (managed EDI services solution) announcement. First, here is how Gartner explains it, "SAP Information Interchange by Crossgate is a B2B gateway that allows companies to exchange purchase orders, forecasts, invoices, delivery notes and other documents electronically via their SAP applications."

For SAP customers with a specific strategy of standardizing on SAP solutions and simplifying their IT environments this will be appealing. SAP field sales teams will now be directly selling this EDI and e-Invoicing solution on SAP paper. This SII (SAP Information Interchange) solution will now be a check box item on new SAP proposals and RFIs, RFQs and RFPs that require EDI and B2B functionality. SAP pre-sales and sales teams will be trained on SII features going forward.

Because this is a managed SAP EDI services solution operating in a cloud computing environment, no hardware, software or EDI specialists will be required to operate EDI in an SAP environment going forward. It will involve a one time set-up and then just a monthly subscription.

"SAP's direct role as an investor in Crossgate and its direct reselling of the Crossgate solution is SAP's strongest ever commitment to a B2B services solution....SAP Information Interchange by Crossgate seems to be the B2B offering that SAP will strategically bring forward for B2B. " ~ Gartner

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP® Information Interchange - SAP's New EDI Solution

The SAP Information Interchange is SAP's new EDI and B2B managed service. It is a managed EDI/B2B exchange service that is operated in a cloud computing environment. It utilizes SAP's NetWeaver platform as a foundation for the service which makes integrating with SAP users that have NetWeaver very simple - almost plug and play. Even those without NetWeaver can activate the service using IDocs or tRFC.

In an article from last week, I made the following statement, "SAP is making a bold move now to eliminate the need for third party EDI and B2B service providers in favor of a simplified SAP supported environment." What does that mean?

Historically, companies would need to purchase an expensive EDI system from some third party specialized EDI vendor. It was a completely different technology platform unrelated to SAP, required in-depth training, specialized EDI knowledge, integration projects, servers, security and 24/7 helpdesk support (related article on EDI costs). This is just to get started. Once the EDI system and resources were in place, long, hard and expensive multi-year trading partner implementation projects would be initiated. For more information read the article, The Process of Implementing EDI and B2B here.

Today this scenario has completely changed. SAP customers can now simply activate the SAP Information Interchange and pay a small set-up fee and then subscribe to the monthly EDI/B2B service from SAP. There is no longer the requirement for servers, specialized training, helpdesk, EDI systems, multi-year implementation projects, etc. For companies wanting to simplify their IT environment, reduce third party applications whenever possible and standardize on SAP this is a big step in that direction. Simplifying IT environments and reducing non-SAP applications is a growing trend. Even in the emerging mobile computing categories companies are choosing vendors like Sky Technologies because they have embedded SAP mobility solutions rather than external third party middleware.

This new methodology for supporting EDI requirements is similar to connecting to the electrical grid that is run by your local electric utility. You do not need to operate the electric power generation plant, the utility manages and operates it. You just need to activate your account with the electrical utility. SAP now has this service available and it is sold through their field sales teams.

You can get more details and pricing by contacting your SAP sales team.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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