Monday, May 24, 2010

IBM to buy AT&T's Sterling Commerce for $1.4 billion

IBM acquiring Sterling Commerce is big news in the world of EDI.  2010 has turned out to be the year of consolidation among the big players in EDI.  First came news that GXS was acquiring Inovis, SAP committing to the SAP Information Interchange by Crossgate, and now IBM is buying Sterling Commerce from AT&T.

Why is this happening in 2010?  In the article EDI Competition in the SAP Ecosystem, I shared my thoughts on this trend.  Legacy EDI companies realize they must form business networks to remain relevant in the long term.  Networks that operate in a cloud computing environment and provide fast, efficient, reusable, and cost effective EDI and B2B connectivity to the members of the networked community are the future.

Let's talk about the term "networked community."  The most natural networked community is a community of software users that share the same ERP (think SAP or Oracle).  These companies share similarities in software applications, integration points, business processes, data requirements, knowledge, and technology platforms.

SAP's earlier investment in Crossgate, and now their release of the SAP Information Interchange, is a good example of this move in the market.  AT&T must have realized that maintaining a legacy third party EDI system is not the future.  Independence is not a virtue in a world of Facebook, iTunes and LinkedIn.  The power is in the linked and connected community!  EDI and B2B technologies and managed service hubs must be associated with technology platforms, ERPs, and industry communities where connections and links can be reused and the entire community benefits from each new member.

Author: Kevin Benedict CEO/Founder Netcentric Strategies LLC
SAP Mentor, SAP Top Contributor
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

Wednesday, May 12, 2010

SAP Information Interchange at Sapphire 2010

2010 will be the first year that the SAP Information Interchange will be unveiled and demonstrated by SAP at Sapphire.  In 2009 SAP's CEO announced the strategy of business network transformation and identified SAP's relationship with Munich based Crossgate as being an important part of it.  In 2010 that relationship has advanced and matured to the point where SAP private labels Crossgate's Business Ready Network as the SAP Information Interchange by Crossgate.

Here are a few of the sessions and events where you can learn more about SAP Information Interchange:
  • SAP Information Interchange - Featuring the International Flavors and Fragrances Case Study - Exchange ideas regarding your business-to-business network, and learn how to leverage standard content to collaborate with suppliers, customers, logistics providers, and toll manufacturers. Space is limited – 12 seats are available on a first-come, first-served basis! Date/Time: Monday, May 17, 2:00 p.m. Location: Microforum 208 Industries.
  • Connectivity of Finance (Payments, Invoice-to-Pay, Customer-to-Cash, Business-to-Business) - Businesses of all sizes can benefit from improving invoice payment cycles, while eliminating manual, paper-based systems. Discover how SAP Financial Supply Chain Management, SAP Invoice Management by Open Text, and SAP Information Interchange by Crossgate can help cut costly manual processes and strengthen relationships with suppliers and customers, while improving profitability. Date/Time: Open during exhibit hours at Pod Number 407.
  • Invoice-to-Pay Process Overview with SAP Partners Open Text and Crossgate - This session is for any business of any size interested in improving its invoice payment cycles and eliminating manual, paper-based systems. Discover how invoice-to-payment automation provided by SAP Invoice Management by Open Text, SAP Information Interchange by Crossgate, and SAP Financial Supply Chain Management can help cut costly manual processes and strengthen supplier relationships, while improving profitability. Speakers: Mr. Tom Walker (Open Text Corp.), Portfolio Manager, Mr. Joseph Pacor (SAP), Marketing Director - Date/Time: Wednesday, May 19, 3:30-4:00 p.m, location:  Theater 3 Lines of Business.
The concept of having a global network of SAP customers all connected to an SAP co-owned EDI/B2B exchange and leveraging each other's maps and connections to trading partners continues to fascinate me.  A recent article I wrote discusses the enormous volume of business that flows through SAP systems.  Upwards of 70% of the world’s economy is executed by organizations running SAP Applications.  To be able to bring order to that flow of business through a powerful EDI exchange that is supported by SAP is exciting and the possibilities intriguing.

Traditionally, each company seemed inclined to develop their own complex and expensive in-house EDI department and to purchase their own servers, software, and training.   The SAP Information Interchange just may be compelling enough to change that paradigm going forward.

Author: Kevin Benedict
CEO/Founder Netcentric Strategies LLC
SAP Mentor, SAP Top Contributor
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

Tuesday, May 11, 2010

Eight Issues to Consider When Selecting an E-Invoicing Service Provider

There are a variety of different business models for global e-invoicing networks and network operators.  Some are more advantageous than others to the companies connected.  Let's take a look at some of the different models and understand what they mean to the companies that connect to them.

1.  Network Ownership

With many e-invoicing networks the goal of the network operator is to control the relationship of all participants and the pricing. If the network operator wants to increase their fees, they can do it.  The participants do not have a voice in the fee structure.  This does not sit well with many companies that invited their business partners to all join a particular network operator that then had their fees raised and their relationships exploited.  Understand your risks and vulnerabilities in these kinds of relationships before inviting your trading partner community to join them.

Some e-invoicing networks like Crossgate, which is co-owned by SAP, understand this concern and do not attempt to own the Trading Partner Agreements or trading partner relationships.  They simply provide a managed e-invoicing service on behalf of their client.

2. Trading Partner Fees

Many e-invoicing network operators require both the sender and receiver of the e-invoice to pay fees.  This is unacceptable to many trading partners, and it inhibits e-invoicing participation and diminishes the ROI.  Alternatively, other e-invoicing network operators only charge their clients for the managed e-invoicing service not their trading partner communities. This is a very attractive model for trading partner communities and encourages participation and rapid adoption.  Consider how the various fee structures can impact your implementations and community participation before agreeing to them.

3. Security

A number of industry groups have encouraged their members to give up their autonomy and commit their e-invoicing efforts to the industry standard and shared e-invoicing system.  Because these services are shared by your industry peers and competitors, you are often limited to only the services used by all members.  This prevents you from implementing new processes and business practices that may in fact provide competitive advantages.  At what point do the limitations imposed by the industry group limit the individual member's ability to customize, innovate and exploit new business opportunities?  The managed e-invoicing services provided by SAP/Crossgate is developed around your SAP system not your industry peers' systems.  This enables you to exploit business opportunities and customize your services in a manner that maximizes the benefit to your organization.

4. Supported Processes

Many e-invoicing network operators provide only a basic PO-Flip service or other limited process support.  What if your organization would benefit from automating a wide range of business processes like ASNs, PO Changes, Partial Line Item Acceptance, etc. It is important to consider the full range of processes supported by your managed e-invoicing service provider before committing to the implementation effort.

5. Service Level Agreement

What is the Service Level Agreement provided by your e-invoicing network operator?  Have you read the fine print? Often the response time in the SLAs is 48 hours.  Is that sufficient to meet your goals?  Often a motivation for implementing e-invoicing is to improve invoice processing speeds so companies can take advantage of early payment discounts.  Ensure your SLA is acceptable and supports your plans and purposes.

6.  Global Coverage

Do you conduct business in Latin America?  Latin America involves some of the most complex and challenging e-invoicing requirements in the world.  Many e-invoicing network operators do not support these requirements.  Ensure the countries where you operate are covered by your service provider before committing to the effort.

7. ERP Integration

Many e-invoicing network operators pride themselves on being ERP agnostic.  They do not care what back-end ERP you use, because they simply pass on a file.  The problem of course, is that many countries have e-invoicing requirements that impact the ERP and require editing your ERP to be compliant.  Using an e-invoicing network operator with deep ERP knowledge and experience helps you meet all of the processes and data requirements needed to be fully compliant with each country.

8.  Language Support

Many e-invoicing network operators may have the technology knowledge to send and receive invoices, but do not have the language support required to implement with trading partners in specific countries.  This is an important consideration.  SAP/Crossgate have native Spanish and Portuguese language specialists to help with implementations.

These are eight issues for you to consider.  If you can think of more, please comment below, and I will add them to the list.

Author: Kevin Benedict, SAP Mentor
Principal Consultant/Founder Netcentric Strategies LLC
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

Tuesday, May 4, 2010

SAP Customer Kellogg Meets Brazilian Nota Fiscal Eletronica (NF-e) Compliance Mandates

I have written several articles about Brazil's new and changing regulatory compliance laws for electronic invoicing over the past few months.  Brazil's requirements are some of the most complex in the world and SAP customer's have been contemplating how to support them and meet the compliance deadlines.

Recently the Kellogg Company, which is the world’s leading producer of cereal, had to meet a tight timeline for compliance with the Ministry of Finance (SEFAZ) in Brazil.  They needed to find a managed B2B/e-Invoicing solution quickly for sending and receiving the XML formats required by the new regulations, and they wanted to implement the solution with as little impact as possible on their existing SAP/IT infrastructure.  The new SEFAZ regulations require companies to prepare outgoing invoices in an XML format and have them authorized in real time before shipments can be delivered.

The Kellogg Company has a consolidated global SAP landscape but with only six weeks until the new mandates went into effect, they didn’t have time for a lot of SAP customization and configuration.  They asked Crossgate, a company co-owned by SAP, to provide the managed e-Invoicing and bill of lading service.  Crossgate's global e-Invoicing services are fully integrated with SAP and provided on a cloud computing platform that utilizes SAP's NetWeaver and offers real-time integration with SEFAZ.

"Our experience with Crossgate was extremely positive as a solution partner to implement the Nota Fiscal Eletronica in Brazil,” said Eduardo Zendejas, EDI IT analyst for Kellogg.  “The solution was deployed with minor impact to our current operations and SAP ERP.”

In the managed service that Kellogg implemented, each nota fiscal e-Invoice (NF-e) is converted to the government-required XML format, validated, and transmitted to SEFAZ for comparison to their master data.  If the address information doesn’t match, the NF-e is not approved and the master data must be corrected manually before the invoice can be reissued. Kellogg hadn’t cleansed their master data for customers in several months, but the managed service included an automated solution that was able to clean their master data quickly so that it would be ready when the new mandates went into effect.

Kellogg realized an immediate ROI from using the managed service because it eliminated expensive internal application augmentations and fully complied with the Nota Fiscal Eletronica initiatives.  Another important benefit for Kellogg was that the service is managed with a local office staffed by people who speak the local language.

The implementation project was completed within six weeks and did not cause any significant business disruptions.

Related Articles:
Author: Kevin Benedict
SAP Mentor, Principal Consultant/Founder Netcentric Strategies LLC
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.