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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SAP Makes Decisive Move in EDI

It is not every day that BIG news comes out of the world of EDI and B2B. I think GXS acquiring Inovis was BIG and Tibco acquiring Foresight was interesting, but today SAP and Crossgate announced that SAP will be reselling and private labeling Crossgate's EDI, B2B and e-Invoicing services. In the world of SAP this is huge!

Some of you may know that SAP is already a co-owner of Crossgate, and that Crossgate's EDI/B2B exchange is tightly integrated with SAP, but it was always sold as a separate service on Crossgate's paper. Now SAP's field sales teams can sell it directly from SAP's price list.

I have a lot of experience working with SAP's sales teams and can tell you that making it to the SAP price list makes a BIG difference. The solution will be called the SAP Information Interchange.

This appears to be a definitive move by SAP to compete directly against GXS, Sterling Commerce and WebMethods. Why would SAP want to compete with these companies? Because each of these legacy EDI vendors has chosen to enter direct competition with SAP. They have been adding more and more business processes to their cloud computing services and threatening to take business away from SAP. 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.

That is not all the BIG news - In my research I came across a recent report from German daily business magazine Handelsbatt that stated the following, "SAP has filed for approval with the German Cartel office to buy an additional stake in Crossgate."

The announcement of SAP private labeling Crossgate's EDI/B2B Exchange and services, plus this report from the German Cartel's office seems to suggest that SAP has finalized their strategy for EDI and B2B processes now and in the future. These developments do not bode well for Seeburger or other legacy EDI vendors hoping to partner with SAP.

Crossgate Announces Global Reseller Agreement with SAP; Relationship Encompasses Next-generation B2B Strategy

Companies Establish Foundation to Enable Global Business-Ready Network

ATLANTA, Georgia – February 23, 2010 – Crossgate Inc., the global expert in business-to-business integration (B2B), has announced a global reseller agreement with SAP AG, through which SAP will resell Crossgate’s B2B engine and associated partner profiles under the name SAP® Information Interchange application by Crossgate. The solution, available today, allows customers to streamline business-to-business (B2B) processes and enables a business-ready network, and also demonstrates SAP’s continued commitment to delivering additional choice and flexibility to customers through collaboration with partners.

“We estimate that upwards of 50 percent of an organization’s revenue and spend is coordinated with other enterprises utilizing SAP applications,” said Stefan Tittel, CEO, Crossgate. “By utilizing enterprise services and SAP Information Interchange by Crossgate, thousands of SAP customers will be turned into one network and enabled for business-to-business information exchange, transaction execution, and collaboration with each other and with the outside world.”

SAP Information Interchange allows companies to exchange electronic purchase orders, forecasts, invoices, delivery notes and other documents directly from their SAP applications, eliminating the need for legacy B2B translators and electronic data interchange (EDI) mapping tools. SAP customers will now be able to purchase a trading-partner-specific profile rather than building, deploying and adapting one-to-one mappings every time a new business-partner requirement surfaces.

The initial interfaces of SAP Information Interchange will be based on standard intermediate document (IDOC) technology and extended to support enterprise services as defined in a joint solution roadmap. Through the use of enterprise services, all users of SAP solutions will be turned into one network and enabled for “out-of-the-box” information exchange, transaction execution, and collaboration with each other. The resulting business-ready network will help make SAP customers semantically compatible with each other and with the outside world, reduce today’s B2B costs, and make internal ERP processes independent from ever-changing B2B requirements of trading partners.

“In today’s global economy, companies need to meet the challenges of an ever-expanding network of customers and partners,” said Lori Mitchell-Keller, senior vice president, SAP Business Suite Solution Management, SAP AG. “SAP Information Interchange by Crossgate expands our commitment to help our customers integrate business partners around the world, while leveraging the investments they have already made. Enterprise services form the foundation of our applications, and through our cooperation with vendors such as Crossgate, we will be extending that expertise to transform their business networks.”

The official North American market launch of SAP Information Interchange by Crossgate is scheduled to take place at the SAP Insider Logistics and Supply Chain Management conference, Feb. 23-26, in Orlando, Fla. The European launch is planned for the SAP World Tour conference, March 2-5, which will be held parallel to CeBIT 2010 in Hannover, Germany.

About Crossgate, Inc.

Crossgate offers the world's first Business-Ready Network, guaranteeing 100% integration of business partners, clients and suppliers. A single connection to the Network means electronic data exchange with any business partner regardless of their technical capability. In addition, Crossgate's B2B-360° Services provide clients direct access to all integrated business partners in the B2B transaction network via their SAP systems. With its legally compliant e-Invoicing Services, Crossgate also provides an innovative and 100% secure solution to cover the entire process of incoming and outgoing invoices, including signatures, global compliance monitoring, and secure automated long-term archiving. More than 40,000 business partners, representing over 10 industries, currently exchange documents and data via the Business-Ready Network.

Crossgate is represented at four sites in Germany, with operations in Atlanta, London, Milan, Paris, and AsiaPac. For more information, visit http://www.crossgate.com

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Author Kevin Benedict
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP Discusses 5 Year Plan - Social Networking, EDI, Cloud Computing and More

SAP executives at their annual Influencer Summit in Boston on Tuesday laid out a broad outline of the company's five-year product and technology vision. They emphasized integrated business analytics, software packages, and on-demand, cloud-based extensions to applications, to enable customers to avoid difficult upgrades while tapping new capabilities.

For those involved in EDI and B2B integrations and data exchanges this is interesting information. It pulls back the veil on their investment into Crossgate, the cloud computing based EDI exchange, last year. SAP does not want EDI and B2B data communications to be a hindrance to solution roll-outs. They want an on-demand model that can simply be switched on.

EAIs (enterprise application integration) solutions grew out of the need to have a more "orderly" and standardized methodology for connecting multiple applications together and for sharing data across the enterprise's IT ecosystem. This exact same requirement is needed externally among large trading partner communities. They need a method for quickly sharing real-time business data across multi-member and extended supply chains. This is best achieved by using a centralized EDI/B2B exchange that manages the data formats of all participating members and creates a repository of partners and formats that can be switched on - in an on-demand model.

An on-demand, cloud computing model for EDI/B2B, removes the limitations of IT budgets, IT staffing, EDI expertise and EDI systems from the equation. It is a pay-as-you-need-it model. It abstracts the system from the business and makes it a simple choice to connect, not an IT project.

SAP users want to be able to use social networking sites such as Facebook to collaborate, said SAP executive board member Jim Hagemann Snabe. "Companies want to take advantage of these technologies without disrupting business," he said. Much of SAP's innovation focus will revolve around flexible extensions to core applications and processes, which can be developed and deployed quickly, via an on-demand or on-premise model, said Hegemann Snabe.

This is a very intriguing concept. The buzz word Enterprise 2.0 is often being used to describe social networking for businesses. I believe this is what Mr. Hegemann Snabe is describing. It is also the model that EDI and B2B Exchanges are rapidly adopting.

Rob Guerriere writes that the EDI industry is investing a lot of time and money addressing SOCIAL supply chain issues right now. He also states that he believes this is the battleground that will determine the winners and losers over the next 5 years.

Social supply chain issues has to do with being able to find, connect and collaborate with your business partners, vendors and customers in an efficient means and often referred to as Web 2.0 (or Enterprise 2.0 in the business context). At a recent GXS conference (GXS is a leading EDI company that recently announced they are merging with Inovis) they announced the launch of two new tools that addresses social supply chain networks. The functionality includes user groups, threaded discussions with support personal and other customers, as well as the ability to chat and post support tickets.

Social Business Networks (SBNs) is one of the hottest areas, and major corporations and government agency CIOs are looking into today. One of the first and best places for organizations to implement this strategy is in the EDI and B2B integration space. It is the purpose of EDI and B2B systems to connect an enterprise with their network, or community of trading partners. The ability to quickly find customers, suppliers, banks and other trading partners and easily connect with them is a perfect use case. I still believe SAP's investment last year in Linkedin and Crossgate (the EDI exchange) reflects some behind the scenes Enterprise 2.0 strategies.

This week IT research and advisory firm Gartner announced their latest 2009 report “Magic Quadrant for Integration Service Providers”. The EDI exchange that SAP co-owns is now positioned in the Leaders Quadrant. This EDI exchange runs in a cloud computing environment using a SaaS or IaaS (integration as a service) model. Gartner's positioning of this EDI exchange highlights the importance of its global repository of re-usable B2B mappings. Customers can connect once to this EDI exchange and access more than 40,000 pre-integrated business partner profiles, regardless of transaction type or volume. Instead of providing only generic data standards and toolsets, this exchange includes partner-specific mappings, communications, and processes aligned with ERP application installations and upgrades. This is an Enterprise 2.0 model or social networking for businesses.

I invite your thoughts and comments.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Wal-Mart and Supply Chain Financing Require EDI

In Saturday's Edition of the Wall Street Journal (November 14, 2009) there was an article called Wal-Mart Program Will Aid Suppliers by Vanessa O'Connell. The article described how Wal-Mart, in partnership with Wells Fargo & Co and Citigroup, have created a new Supplier Alliance Program designed to provide supply chain financing to their suppliers.

I have been involved with similar supply chain financing programs in my role as an SAP EDI consultant. These programs most often require EDI and B2B connectivity to work well. Why? Let me first explain the process. It is all about the supplier getting paid faster. That means instead of waiting 60-120 days for payment from the retailer, the supplier delivers the products and then factors the invoice amount through a participating bank and receives payment within 10-15 days. In this case the interest rate and fees charged by the banks are less because of Wal-Marts participation.

The key to getting paid faster is being able to navigate the retailer's invoice and approval processes faster. EDI and B2B connectivity removes the postal service delay, data entry delay and paper processing components of the process. With EDI the electronic invoice is directly integrated with the retailers' automated accounts payable workflow process.

EDI between the supplier and retailer makes the invoice process go faster. EDI between the retailer, supplier and the bank make the factoring process faster. In order for supply chain financing to work well, it requires a good EDI integration between all parties.

If EDI is not possible with a segment of suppliers, then there are companies like BancTec that retailers can contract with that provide outsourced or insourced services to scan/OCR all inbound paper invoices and to process them so they are entered into the SAP or other ERP system quickly.

SAP users can work with SAP Partners OpenText and Crossgate (SAP co-owns this EDI exchange) to automate and optimize their accounts payable processes nicely. Crossgate provides the EDI/B2B integration and OpenText through their Vendor Invoice Management system can automate the invoice approval processes.

If you would like to discuss these in more detail email me.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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EDI, SOA, SAP NetWeaver and Cloud Computing

If you are using custom integration scripts to move data back and forth from your EDI system to your ERP or other database applications, then you are in trouble. The clock is ticking. Business and IT environments change much too quickly these days for any company to be using custom integration scripts.

When I was the EDI Manager of a computer manufacturer I remember studying the spider web of custom integration scripts to see how EDI data got from point A to point B. I remember asking for documentation on the scripts and hearing nothing but laughter. I remember asking what systems would be impacted if a business process was moved from one application to another vendor's application and no one could answer the question.

Custom integration scripts will ultimately damage the business. Why? They are way too expensive to maintain, edit and support. They can not be easily changed and over the years companies can accumulate thousands of them (for a related article click here). Businesses must be able to rapidly change, add and support integrations today.

SOA (Service Oriented Architectures) models for integrating EDI with SAP and other database applications must be implemented. SAP NetWeaver PI is a good platform to implement the eSOA approach to EDI integration. Integrations between the SAP ERP and your EDI system can become services that are stored in the Enterprise Services Repository and available for reuse and editing.

This approach avoids many of the problems caused by most custom integration scripts for EDI. It gives the enterprise the ability to quickly find, edit and use pre-existing services.

Starting in late 2008 SAP has been developing and promoting a new concept for EDI. A network-centric approach to EDI that calls for the use of an EDI Exchange that utilizes SAP NetWeaver in a cloud computing model. All SAP users can subscribe to it and access it using a NetWeaver-to-NetWeaver connection. New Enhancement Packages (SAP updates) will come with pre-developed EDI integration services in the Enterprise Services Repository. It is a very interesting concept that is pointing us to the future.

Here is the biggest problem. Management does not want to hear about fixing something they think works. They don't want to reserve budget to fix what works today even if it is a ticking time bomb. Good Luck!

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Who Wants Cloud Computing Other Than SAP for EDI?

In this article by Gartner's Thomas Bittman, he answers the question on which industries are most interested in cloud computing. He answers the question by listing the industries that have asked Gartner the most questions about cloud computing.

I am interested in this question as well since SAP has been strongly pushing their co-owned EDI exchange called Crossgate that operates in a cloud computing model.

Here is the list from Mr. Bittman:

1. Financial services (12%)
2. Manufacturing (10%)
3. Business and management services (10%)
4. Telecommunications and equipment (9%)
5. Government (7%)
6. Insurance (6%)
7. Oil, gas and electric (5%)
8. Professional/specialized services (5%)
9. Schools and education services (4%)
10. Food (4%)
11. Retail (4%)
12. Healthcare (4%)
13. Media (3%)
14. Chemical and pharmaceutical (3%)
15. Military and National Security (3%)
16. Freight services (2%)
17. Energy management (2%)
18. Membership organizations (2%)
19. Commercial physical research (1%)
20. Other (4%)

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP EDI, Inovis and Cloud Computing

SAP and Crossgate (the EDI Exchange that SAP co-owns), are not the only companies talking about EDI in a cloud computing environment. Inovis' chief technology officer was recently quoted saying the following, "Our customers are dealing with a perfect storm of rising partner transactions, governance mandates and reduced staff and budgets. Our B2B cloud integration platform has gotten great feedback as a flexible way to solve these challenges, both for today and tomorrow," said Erik Huddleston, Inovis chief technology officer.


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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Crossgate Rises to the Top Category of EDI Service Providers

In this blog article by Rob Guerriere on the recent Forrester report called B2B Service Providers 2009 he talks about the fact that several German EDI companies have quickly risen to the top. Crossgate, a company co-owned by SAP, is one of them listed.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP EDI is a Community Effort

EDI is all about communicating with a community of business partners, service providers and customers. It is not about internal operations and IT infrastructure, but external. It is about your ability to externally communicate business information in the easiest and most cost effective manner to conduct more efficient business.

Traditionally, SAP EDI in large companies with many customers, service providers and suppliers required many internal IT resources, computer servers, security processes, EDI consultants, EDI software systems and hundreds of internal meetings to set-up. This was all before any EDI data was being transmitted. Once all of the internal EDI infrastructure was installed and ready, long and expensive multi-year trading partners implementations could begin.

The challenge with the traditional methodology is that business processes and trading partners change faster than you can implement EDI transactions with them. Just when you finish getting your largest suppliers connected, you acquire a new company and must start over with a new implementation effort. It is very rare that a company can implement EDI with more than 20% of their trading partners. That means 80% of trading partners continue to conduct business using slow paper based processes.

If each SAP customer continues to attempt to implement all of their EDI themselves, it will never succeed at replacing paper systems. Business changes faster than EDI transactions can be implemented.

What is the answer? The community of SAP users must all work together. Like farmers joining together to gather a harvest before the rains.

If each SAP customer could benefit from the EDI implementations that other SAP users have already completed, then the community could provide huge benefits. What would this look like?

1. There would need to be a central hub or exchange where all of the connections from trading partners to SAP customers could be registered and stored.
2. This list of registered trading partners, business processes and supported data formats would need to be available for querying by all members.
3. The registered connections would need to be reusable by other SAP users. This requires that all trading partners' supported data formats and standards be translated into a canonical data model.
4. SAP users would be able to create 1 connection per business process into the hub and then take advantage of the canonical data model to send and receive data from all of the SAP communities' trading partners.
5. To reduce costs, EDI experts at the hub could manage all of the IT infrastructure, operations and support.
6. SAP users would simply connect into this SAP community hub in a cloud computing environment using IDocs, NetWeaver PI, tRFC or web services once per business process.

If 1,000 SAP users registered and connected 10 trading partners per month on the SAP Community hub, you would have 10,000 connected trading partners in 4 weeks, and 120,000 in one year. This phenomena is called the network effect. It is a network-centric approach to EDI and the one that has the best chance of maximizing the value of EDI and B2B data exchanges and reducing the largest amount of paper from the system. It is the green method and the lowest cost method.

In the network-centric method of supporting EDI, SAP customers could eliminate internal EDI infrastructure, hardware, software and headcount. Simple NetWeaver PI connections to the community hub is all that is required for conduct EDI and B2B.

This evolution of EDI from internal departments and expensive infrastructure to low cost external services is similar to the evolution of electricity. In the early days of manufacturing when electricity was first used, each company needed to invest in and operate their own private power generation plant to supply electricity. This investment and effort stopped once communities formed electrical co-ops and utilities that could supply services to the entire community. EDI has reached this mile post.

Last year, SAP began this move by investing in an EDI Exchange for SAP users.

For a related article see: SAP and the Big Switch

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Too Big to Manage? Complexity, Cloud Computing and EDI

This week I read an article called Too Big to Manage?, in the Wall Street Journal, The Journal Report, Monday, October 26, 2009. The subtitle is Some companies are simply too complex to be run efficiently. The focus of the article was complexity, and how complexity can overwhelm management. I have been there. I have been an executive that was completely overwhelmed by the complexity of managing all the various components and competing interests in a fast growing high tech company. This article resonated with me. In hindsight I recognized that much of the complexity was unnecessary and not core to the success of my company.

One of the solutions, listed in the article, that helps companies reduce complexity is to, "Outsource or spin off nonstrategic services. Many companies have taken entire business processes off of their books, such as IT, finance, logistics and human resources, thus simplifying their internal operations dramatically."

In my experience, R&D, product delivery (software development and professional services), marketing, sales and customer service were core, but just about everything else should have been outsourced.

In this article I identify the large number of people and departments that get involved in even a simple EDI implementations. Traditional EDI is complex and resource intensive. Many large companies have directly contacted me this year to ask my advice on outsourcing EDI as a nonstrategic service. It is required, but not as an internal effort. Many companies are better served by simply connecting their SAP ERP to an SAP-centric EDI Exchange and letting all the complexity be managed in an external cloud computing environment.

Focus your IT brain power on something that will actually produce additional value for the company. Traditional EDI and B2B are no longer considered competitive differentiators. All large companies have these capabilities. Therefore, the advantages are now found only in making it less expensive, simpler and more widely used, all of which are accomplished by outsourcing to a quality EDI service provider.

SAP has recently invested in and become a co-owner of an EDI Exchange for SAP users. Why? The same reasons - the believe they can create an EDI Exchange in a cloud computing environment that can provide EDI services faster, simpler and for less money than SAP users could do in-house.

I look forward to your thoughts and comments.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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SAP Event Management, EDI and Cloud Computing

SAP Event Management (SAP EM) is a powerful solution that I believe will be increasingly popular as companies continue the trend of globalization and employing extended multi-enterprise supply chains and contract manufacturers. Here is a brief description of SAP EM that comes from SAP's wiki:

With the SAP® Event Management application your company can monitor and manage events across your distributed processes involving partners, inventories and assets. It captures events from your system and your partners' systems, analyzes them against it's predefined plan and alerts or workflows a response to the required people to react when deviations are found. It comes integrated with SAP® NetWeaver BI and SAP® Auto-Id Infrastructure (RFID enabled scenarios).

RFID and auto-id solutions using both static systems and mobile handheld computers collect data that are used to report on the shipping status and assembly line progress of various components. This data is fed into SAP EM via EDI or B2B data exchanges.

Multi-enterprise supply chains are inherently risky as you add more variables that can go wrong. Each participant in a multi-enterprise supply chain has its own supply chain and priorities that can become a dependency to your project's success. Include cultural issues, different languages, geo-political uncertainties, taxes, currency exchange rates, laws and regulations to the mix and you have a recipe for excitement and drama.

The management of an extended and multi-enterprise supply chain requires a much higher and advanced level of automation, visibility and management than ever before. SAP EM is a solution well positioned for this role.

I see extended multi-enterprise supply chains as nearly an entity in itself. It is a shared community effort, an organism with many different living parts, a process that requires cooperation from all parties to be successful. In many cases, I think it would be better if SAP EM were a hosted solution in a cloud computing environment that supported the extended multi-enterprise supply chain community, rather than being owned by one particular participant in the process.

Let's now discuss for a moment the role EDI and B2B messages plays in the SAP EM environment. All participants in this extended multi-enterprise supply chain need to be sharing data that informs the other participants as to the progress, schedules and status of their segment of the supply chain process. They need to receive orders, acknowledge the order, order parts, receive parts, manufacture products, ship products, provide advanced shipping notices, invoice etc. This is where EDI and B2B messages come in.

EDI is structured data that is documented in a standardized manner and shared between trading partners. This structured data can be called EDI or B2B (business-to-business) data exchanges. I will use the term EDI to cover both areas. This EDI data is what the participants of the extended multi-enterprise supply chain (I will make up an acronym - EMESC) send to the SAP EM to communicate status and other business data necessary for the supply chain's success.

In the same manner as SAP EM seems to be best suited for a SaaS model in a cloud computing environment because it is a shared process by a community of members, I think the EDI/B2B data exchanges should also be an extension of the EMESC. It does not seem to make sense to have one of the many participants be responsible for the integration, development, operations and support of all participant's EDI exchanges. This responsibility should be owned by the same SaaS provider that supports the hosted SAP EM in a cloud computing environment.

I find the entire concept of SAP Event Management as a solution for tracking the entire supply chain fascinating. It has the same capability to alter the landscape of traditional supply chain management as does Business Network Transformation or SAP EDI in a cloud.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Switching from Traditional EDI and Going Green

It appears I am not the only one talking about how EDI helps companies go green. Several weeks back I wrote the article called Going Green with SAP EDI and e-Invoicing, and today I read this announcement, Moving towards a Green Future - SANYO Switches to EDI On-Demand.

SANYO Component Europe GmbH, the leading supplier of industrial batteries for hybrid vehicles and other electronic automotive components, is switching its EDI communications with business partners to an on-demand EDI service (using a cloud computing model) that is "powered by SAP" which is fully in line with its green "Think GAIA" corporate vision.

It appears that SANYO sees switching from a traditional EDI model to an in the cloud computing model as helping them achieve their goals of accelerating the introduction of innovative and ecologically friendly technologies, and to become a leading supplier of industrial batteries for the automobiles of the future. The previous solution, an in-house EDI middleware solution, was too expensive to maintain and to continue adding new trading partners and complex EDI requirements.

Let's attempt to interpret this announcement. SANYO likely has a new supply chain, new customers and new logistics partners for these products. That means several new EDI implementation projects and EDI/B2B on-boarding initiatives. That translates into lots of expensive work and a long term commitment to the traditional in-house model of EDI if done internally. Many companies pause before starting these kinds of costly initiatives and ask themselves if the traditional approach of running an EDI system and staffing their own internal EDI department is the best strategy for EDI and B2B support in the long term. Obviously SANYO decided that it was a good time to switch to the cloud computing model for EDI/B2B promoted by SAP.

For related articles read:

• SAP's New Strategy for EDI
• SAP Centric EDI

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Upfront SAP EDI Costs - Or Pay as You Go

Sometimes I don't write very well. In this article from NPR's Jon Hamilton dated October 16, 2009 he reports that it take only about 1/2 second to transform a thought into words. Sometimes it only takes 3/4 of a second for my thoughts to end up on a blog. I apologize. An article I recently wrote called EDI - $500,000 Invested and it Still Doesn't Work generated quite a few comments that focused on issues related to poor project management. Since that was not a focus of my article, I must conclude I wrote poorly and did not make my point. As I am not one to give up easily, I will try again.

In traditional EDI, in a medium to large size enterprise, one must spend considerable money up front simply to purchase the EDI translator and set-up all the associated hardware, software and integration processes to support it. A company must also invest considerable amounts of money into staffing an EDI team, or hiring consultants, and creating a project plan. EDI standards must be considered, trading partner's surveyed, data formats reviewed, ERP integration strategies determined and communication protocols selected. All of this work is done before there is an ROI. That was the point readers of my original article did not get. So again, all of the infrastructure, licenses, staffing and meeting after meetings must be done in advance of any ROI in the traditional way of running an internal EDI/B2B department.

The new alternative, is to Pay-as-You-Go for EDI and B2B integrations and support it in a cloud computing environment so you can immediately begin receiving a ROI. As I have mentioned earlier, many IT departments are being told to demonstrate a 90 day ROI on any IT investments or don't bother submitting the request. You cannot show a 90 day ROI if you choose to implement a traditional in-house EDI system and department. The ROI is a multi-year effort in most cases. Therefore, IT and business units must either not implement new EDI in the traditional mode, or find an alternative manner of implementing EDI that shows a much quicker ROI.

SAP understands this point They invested in an EDI and e-Invoicing Exchange for SAP users that functions in a cloud computing environment with a subscription business model. All of the EDI systems, global e-Invoicing processes, EDI standards, communication protocols, help desks and EDI expertise is already set-up and available in a monthly subscription model. You only start paying a set-up and service fee when you implement a new EDI or B2B trading partner's processes. You don't need any hardware, software or EDI staff investment upfront.

This model enables you to immediately start showing an ROI. It is the new method and strategy that changing economic times demands from IT vendors.

If you would like to discuss this topic in more detail please contact me.

For related articles please read:

• Going Green with SAP EDI and Electronic Invoicing
• Breakdown of e-Invoicing Benefits
• Converting Paper Invoices to Electronic Invoices is Required for Global E-Commerce
• The Benefits of e-Invoicing

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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The True Costs of EDI

In this article the true costs of implementing EDI are discussed. The costs go way beyond that which is usually reflected on the IT budget spreadsheet. Why? The business unit must be involved as are people involved up and down the supply chain and other impacted departments. For a true ROI on EDI it is important to consider the points made in this article.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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EDI - $500,000 Invested and it Still Doesn't Work

It is very important these days for IT and business departments to get a fast return on their investment. I have heard business managers mandate 90 day ROIs or the IT project will not be approved. This is a big challenge for EDI vendors. Why? Let me share some experiences.

Many EDI translators are expensive. When you add up the license costs, the various servers, development, testing and production, consulting, implementation, training, hardware, communications, mappers, EDI standards, ERP adaptors, integration development etc, it is not unusual for all of this to add up to over $500,000. Here is the big problem - it still doesn't provide an ROI after all of that investment. The $500,000 is just to get you prepared.

Prepared, that is, for the start of your expensive and long multi-year trading partner implementation project. This could be more expensive than the original investment. The ROI will only start once data is moving in production through the EDI and integration system between you and your trading partner. Everything that you spend money on that does not move production data between you and your trading partner can not provide an ROI.

Here is an alternative to consider. Skip all of the software, hardware, integration code development, consultants, etc, and simply use a managed EDI service. Only pay for actual implementations and production services. That way every penny that you spend is for an ROI, not to prepare you for an eventual ROI.

SAP co-owns their own EDI managed service for SAP users that runs in a cloud computing environment so you have no hardware or software to purchase and maintain. You only pay for connecting to your trading partners and supporting a production environment. Something to consider.

If you would like to discuss this topic in more detail please email me.

For related articles please see:

Implementing EDI

Staffing for an internal EDI department

EDI Business Network Transformation

EDI and B2B Challenges

EDI data, mappings and other intellectual assets

Considerations for outsourcing EDI

SAP's New Strategy for EDI

The Real Purpose of EDI

More on EDI Staffing

Documenting EDI data requirements

Creating an EDI Implementation Guide

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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How EDI and B2B Connections Can Destroy Your Company

I realize the title of this article may be a bit dramatic, but it is true.  I have seen companies that desparately needed to change their business model, upgrade their SAP ERP systems and implement new business processes, suddenly halt this effort due to the unexpected and unanticipated requirements to replace all of their existing EDI and B2B integrations. 

Think of it this way, have you ever needed to move the entertainment system in your house?  The mass of dust covered cords, wires and cables hidden behind it can be daunting.  You may hesitate to even move the entertainment system out of fear that something will become disconnected and not work.  It is the same process multiplied by 100,000 with your trading partners and their integration scripts.

Let's say you have 1,000 suppliers.  If you are going to upgrade, change or alter the data model of your ERP, it is highly likely you are going to quickly start breaking mission critical EDI data exchanges between you and your suppliers.  This tends to enrage just about everyone in your company and at your suppliers. 

OK, there is a challenge here, but there is also a very desparate need to upgrade or change the ERP so you can take advantage of all kinds of new business processes, technologies and application features.  The problem is the ERP folks and the business managers didn't talk to the EDI department when they purchased the new upgrade.  Now the ERP is suppose to be functioning and in production in 5 months, but the EDI department is already buried under just routine operations and support.

At this point things get really crazy.  The business managers start blaming the EDI department for obstructing progress, innovation and business transformation.  The EDI team just looks up from their terminals and says, "huh?" 

Now the CIO is in hot water.  She calls the EDI Manager to her office and asks, "How come you are stopping the company from meeting their quarterly and yearly goals?"  The EDI Manager says, "Not our fault.  There is 20 years worth of custom and undocumented integration code that an upgrade to the ERP will break.  Has nothing to do with us.  The ERP folks are breaking what already works."

The story gets darker.  The CIO walks the green mile to the CEO's office and says there is 20 years worth of EDI integration code and scripts that need to be replaced, and it will take 2 years worth of unbudgeted development to re-integrate and test all of these EDI integrations.  The CEO steps around his desk and quietly shuts the door of his office.

When the CEO's door reopens 3 hours later, the CIO has been tasked with re-introducing manual spreadsheets, phone calls, emails and faxes to the suppliers.  This step 15 years back in time is needed to keep the ERP upgrade on schedule without EDI interference. 

What the 3 hour meeting in the CEO's office did not fully acknowledge or plan for is how much the supply chain, logistics department and customers would be effected by this return to manual systems.  The downward spiral begins.

I have seen this process unveiled before my very own eyes.  How can it be avoided?  There needs to be a plan in advance to create a layer of separation between your ERP and your EDI translators and trading partners.  This layer is a change management insurance policy.  Custom EDI integration scripts need to be replaced with one integration per business process.  This single integration needs to support all varieties of Purchase Orders, Invoices and other EDI messages.  You cannot have a new integration to your ERP for every trading partner's custom data file.  The EDI integration needs to be a standardized process that connects to a canonical data model associated with the EDI translator.  This is usually only possible if you are using a manage service from a large EDI/B2B hub.  The alternative, is the situation documented above.

This is one of those things that no one likes to plan for, but the business depends on it.

If you would like to discuss this topic in more detail please email me.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict  
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Mobile and Location Based Services and EDI Integration

Location based services are not usually associated with EDI or B2B integrations, however, I am considering a scenario where that might change.  By location based services we generally think of mobile phones, Smart Phones and handheld computers.  We think of various marketing and informational programs that can target the phones of people within a specific distant of a business.  For example, you want Pizza so you open Safari on your iPhone and type in the word pizza.  It immediately shows you on a map the location of businesses that serve pizza.  By tapping on the screen up pops their address, phone number and website.  How does EDI fit into that?

Many large companies have central ERPs (enterprise resource planning) software that manages their business.  ERPs manage just about everything from new employee hires, transportation, shipping and manufacturing.  Sometimes the information you need in a "location based services" application is kept on one or more ERPs. This may involve real-time A2A (application-to-application) or EDI integration to access this information. 

In this article there is an interesting example of LBSs from Subway (the sandwich folks) and a scenario with a grocery store chain.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Implementing, Organizing and Managing SAP EDI

For any company that is considering a new EDI implementation and is struggling to understand EDI and what it takes to develop an EDI department, the links I have provided below should prove useful. 

The first question a company will want to ask themselves is why support EDI or other B2B data exchanges at all?  What is the purpose and business value?  EDI and B2B systems, integrations and support are expensive and time consuming.  What is the expected ROI?  Often customers demand EDI support, and the business will quickly see the value in implementing EDI (electronic data interchange) with their suppliers and logistics partners  The reason you want to document the purposes is that it helps focus support and encourage perserverance during challenging implementations.

If your company can identify why supporting EDI is important, then the second question is should EDI be supported internally or can it be subscribed to as a service (SaaS or IaaS models)?  EDI systems, staffing, development, integrations, implementations, operations and support are very expensive.  The company really must understand the business value upfront, and then decide if this huge multi-year investment is worthwhile to support internally.  Not only is it expensive, but it will require your best IT developers and brains to get everything working.  Is this the best use of your best brains this year?  If not, can you simply subscribe to an external EDI service provider that will take care of everything for a small set-up fee and a monthly service fee?

For those new to the world of EDI, or just want a refresher, the following links identify many of the tasks, challenges and issues that need to be considered and understood.

Implementing EDI

Staffing for an internal EDI department

EDI Business Network Transformation

EDI and B2B Challenges

EDI data, mappings and other intellectual assets

Considerations for outsourcing EDI

SAP's New Strategy for EDI

The Real Purpose of EDI

More on EDI Staffing

Documenting EDI data requirements

Creating an EDI Implementation Guide

If you would like to discuss any of these topics in more detail, or schedule a training class for your business please contact me.

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Author Kevin Benedict
EDI, B2B and Mobile Computing Evangelist and Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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EDI Audits and ROIs for Supply Chain Management

EDI and B2B systems are expensive and time consuming to setup. A positive ROI (Return on Investment) is realized only after economies of scale are reached. This may come after the successful implementation of 10 high volume trading partners or 1000 low volume. The exact ROI figure depends on the initial investment and the expected returns from each successful implementation. What is known is that the faster, and simpler the implementation the less expensive it will be. Also, the more that the initial implementation work can be reused and leveraged, the more cost effective it will be and the sooner the ROI will be recognized.

In order to maximize the ROI, it is necessary that we prioritize our tasks and efforts. Which trading partners do we implement with first, high volume or high value? Where is the greatest potential savings or returns? One of the first steps to implementing our strategy is to audit our internal business processes, and then to audit our external business processes that touch our trading partners.

The following list contains questions that should be resolved before and during EDI and B2B system implementations:

1. What information is exchanged between business partners? This includes formal documents such as purchase orders, invoices, etc., as well as informal documents and communications such as messages, memos, phone calls and faxes. All methods of communication have costs associated with them.
2. How and where is the information initiated; manual input, screen entry, or computer generated?
3. Where can time be saved?
4. How much labor savings could be recognized?
5. What is the internal flow of information?
6. Currently - How many copies are produced, and in what format?
7. Who receives copies and why?
8. Are these copies stored and for how long?
9. What control and reporting measures are used—status reporting, audit trails, security safeguards?
10. Who needs to be involved in the work flow? Who approves the business documents or transactions and how?
11. What specific information is needed for current application programs—form of data, data flow between applications, entry of data?
12. What information is available from application programs?
13. What results are produced?
14. What is the format and structure of the data output?
15. How does the speed of processing documents effect the business? Some are time sensitive, others not so much.

Once internal and external business processes have been documented, it is necessary to evaluate the changes required to your internal systems to accommodate the EDI / B2B standards that both you and your partners require.

Additional Issues:

1. The addition of new data to the database to meet standards requirements.
2. The use of tables to cross-reference part numbers with trading partners.
3. A change in review or approval processes.
4. The development of a data link between the application program and the translation package.
5. Electronic linkages to the database for departments that formerly received manual reports.
6. The need to bridge between applications if multiple departments use the same information.

If you would like to discuss this topic in more detail please contact me.