Parent Category: ROOT
Monday, 08 February 2016
Written by Scott Koegler
The cloud and its advantages are everywhere, right? Every mobile device and every consumer web service is based on cloud technologies. Every day startups take to the cloud, building new applications, hosting data and services in publicly available storage sites and moving data between local storage in the office and inexpensive hosting. But even with all this activity and concentration on the benefits of cloud based environments a frighteningly small percentage of B2B transactions move electronically.
In fact, when we talk about B2B transactions being processed electronically we don’t even mean ‘through cloud-based systems.’ We mean electronically as in EDI or any kind of digital process. How is that even possible after the tremendous efforts dedicated to EDI implementations, staffing for electronic transfers, and all the work done to get orders processed quickly and efficiently?What’s the holdup?
If you’re familiar with EDI you know exactly what the holdup is. It’s the complexity and difficulty of getting your trading partners to implement electronic connections. And it doesn’t stop with just getting data into the right forms with the right data. Companies universally have problems connecting their internal systems that house costs, prices, inventory, and production information with the order processing systems that connect them with their customers.
Companies do their best to track the information they use to create their products and get them to market but very few have complete and integrated systems that connect every piece of the process into seamless flows. That’s because the data is stored in a variety of document types that can’t easily be unified. They include written documents for product ideas, spreadsheets for costing, emails with vendors, faxes, and eventually purchase orders for parts and supplies. It’s an overwhelming problem.
So, forget trying to link all the internal data into a cohesive whole. Let’s just deal with transferring purchase orders and the associated documents that get the product to market. That’s a much simpler process since the transactions only move between two parties - the purchaser/customer and the supplier. Simply put the data into well documented and standardized formats defined by the EDI standard and send the document to the trading partner. What could be simpler?
Of course on a 1-1 basis it really is that simple. But suppliers want more than one customer and retailers have to deal with more than one supplier. Every time the matrix of trading partners expands, the complexity of the work gets more difficult. And the cost of maintaining the mapping between trading partners becomes more brittle. Changes get requested and made and mistakes and miscommunication happens.
It would seem that some kind of cloud based service could help mitigate this fiasco by providing easy connections and managed translations. They do exist and are generally able to ease the difficulty of updating conversions and transferring documents. So maybe we are about to move beyond the meager 8% adoption rate of digital billing transactions we now live with.