Over the past year, e-business initiatives have enabled companies to take huge steps toward improving business processes related to the purchasing and fulfillment of manufactured goods. Business-to-business (B2B) enabled applications are allowing manufacturers to more efficiently meet the demands of their customers. Companies are finding that they can attain cost savings and improve delivery times through integrating their business processes with those of their suppliers, distributors and others across the supply chain.
However, B2B implementations to date have been fairly restricted to the procurement of indirect goods equipment and material that are not related to a company's core business. In addition, some companies are now forming marketplaces to address predefined commodity-like goods that can be ordered from a catalog without further specifications.
This has limited the return on investment that had been anticipated by most companies who spent large sums of money to develop infrastructures that enable B2B integration. This is largely due to the fact that indirect goods only constitute 25 percent of the actual dollars spent by companies. The majority of expenditures are related to purchases that typically involve more complex transactions, requiring collaboration and greater information exchange. The higher-value savings will come from automating these higher-value processes.
Enterprise application integration (EAI) has become a key component of current B2B integration efforts. EAI tools enable companies to utilize their existing systems to conduct inter-enterprise transactions. An order initiated in one company's SAP enterprise resource planning (ERP) system can automatically generate an increase in the production levels managed by a supplier's supply chain system.
This type of inter-enterprise integration has enabled companies to greatly improve efficiencies in their traditional business operations. Transferring information from one company to another, or even from one department to another, often involved manual data entry from system-generated reports, purchase orders and invoices. Organizations quickly realized that the time delays and processing errors could be greatly reduced by electronically passing data and ordering instructions directly from one system to another.
However, what EAI fails to provide is the context behind the transactions. This is a major reason that B2B solutions currently only address what needs to be done and not why it needs to be done. Without an understanding of the relevancy of transactions, business improvements are limited to gains in real-time processing and do not address true process improvement.
Additional information is required to help companies make smarter decisions and improve how processes are completed, as opposed to simply addressing the speed at which they are conducted. This information is typically not contained within the business processing applications that EAI tools have primarily addressed.
The context and relevancy of transactions cannot be obtained from the structured data maintained within transactional systems. The knowledge that can be used to improve decision making, along with the relevant information required for making enhancements to how processes are performed, is buried within unstructured content related to the transactions. This unstructured content includes reports, e-mail, chat logs, threaded discussions, Web pages, design documents, marketing collateral and news feeds. This content is rarely captured in the same systems that have traditionally been integrated into EAI and B2B implementations.
This lack of context is a primary reason why today's B2B solutions are only addressing the more systematic, simple processes around the procurement of indirect goods and commodities, which account for less than half of corporate expenditures.
More complex transactions require a greater degree of collaboration among all of the companies involved throughout the value chain. Build-to-order goods and services necessitate the ability to share information before, during and after the transaction. This information is typically created and managed as unstructured content, not as structured data within the business processing applications to which EAI tools provide access.
In addition, products are no longer designed in a vacuum by individual departments within individual companies. Product design and manufacturing require interaction and collaboration at all stages of the product life cycle. Customers and suppliers, along with manufacturing and maintenance divisions, require access to the design diagrams, product specifications and other documents created at the beginning of the process, along with change orders, standard operating procedures and maintenance records required after the initial transaction.
Sharing documents with suppliers, partners and customers throughout the supply chain, and even various departments dispersed across an organization, is becoming critical for companies trying to compete in the age of e-business. This can present a significant challenge taking into consideration the different types of systems and formats used by different companies to create, store and manage documents and unstructured content throughout the value chain.
This challenge must be addressed by making the inclusion of documents and other unstructured content an integrated part of a company's B2B infrastructure strategy. The documents and other unstructured information have become critical to addressing the next wave of processes targeted by e-business solutions. The result will be collaborative commerce, or c-commerce.
While traditional EAI solutions have primarily addressed the integration of business-processing applications, such as ERP, CRM and supply chain management, the collaborative commerce scenario predicates the need to apply these same concepts to content- controlling applications, such as collaborative groupware, document management, imaging, Web content management and product data management (PDM) environments. Integration of these systems will allow organizations to collaborate to conduct more critical, complex transactions through their B2B solutions.
Collaboration necessitates that people in different organizations have the ability to share documents regardless of how or where they are stored and managed. However, companies use a wide array of environments to manage their product data and documentation, making it difficult to provide others with the ability to access the necessary documents in an efficient and meaningful manner.
In addition to the problem of different companies using different systems, it is rare that other departments outside of engineering are using the same environment. In many cases, even within engineering, there is use of more than one content management solution in place. With everyone using different applications, how can companies share documents that are stored in different managed environments, in different formats, and still achieve true collaboration?
The answer lies in many of the same technologies used to connect disparate application environments. Combining XML, application integration and business-to-business integration concepts can lead to a solution that allows organizations to more easily share documents and promote collaboration.
XML is often misrepresented as the solution. While XML plays a critical role, it is important to understand its true applicability. Marketing collateral, project requirements, engineering diagrams, design specifications, e-mails and other documents related to a transaction often cannot be broken down into components that fit into a standard XML schema.
However, XML does allow organizations to create a wrapper around these documents that includes the associated meta data. This puts the document in context, enabling other applications and organizations to know what the document is and how it should be handled. This is what has led to the addition of attachment specifications by the standards bodies responsible for both SOAP/BizTalk and ebXML.
Companies are now realizing that they need to do more than just exchange transactional data to obtain the returns they have been looking for from their B2B investments. They need to collaborate with their partners and supply chain on customer needs and demand, product design, ongoing process improvement, component availability, alternatives and engineering changes. This collaboration is required before companies can e-enable the more complex transactions that offer greater opportunities for savings. It will also provide the intelligence to help improve corporate planning and decision making, which is what will ultimately lead to the type of process and product improvements that can have a more significant impact on profitability.
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