The is a transcript of a GXS webinar discussing how you can increase ROI from the investment in your ERP environment with B2B integration. To view the webinar please click here.
Hello, and welcome to this Webinar hosted by GXS. My name is Mark Morley, industry marketing director. Over the next few minutes, I’d like to take you through a short presentation which discusses how cloud based B2B solutions helps complete ERP environment.
As we know it, ERP and B2B systems share many similarities. Both require skilled resources to implement and manage on an ongoing basis. There needs to be access by many users across the extended enterprise. And they can be difficult to integrate to other back office environments. Whether you are implementing in ERP systems the first time or thinking of upgrading your existing ERP environment, this will provide – normally provide the ideal opportunity to reassess your B2B platform requirements.
Given that many IT resources are diverted towards an ERP implementation, outsourcing the management in a B2B environment can bring many benefits for a company. ERP systems have traditionally focused on reporting internal business processes, however, more and more these days, companies are using external business partners or contract manufacturers and they need access to information from the same ERP platform.
Therefore, ERP systems need to exchange information in both directions with companies across the extended enterprise. But how can a company achieve this seamlessly if there is not integration between an ERP and B2B platform? ERP could, therefore, be considered as incomplete. So let me just outline an agenda for this session.
So in terms of our agenda, let me start by providing an instruction as to why it’s important for the companies to be able to exchange business documents seamlessly by into and out of an ERP environment. I will then discuss the findings from our recent executive study which looks at how companies are undertaking ERP B2B integration projects.
I will then discuss how a cloud based approach to ERP B2B integration can help companies improve visibility and across enterprise business processes and transactions. I’ll also discuss how the cloud can help build a firewall around you ERP applications, thus ensuring that only pre checks accurate information enters your ERP platform.
I will then take you through a few customer examples which we’ll highlight from companies and how they move their integration projects to the cloud.
ERP and B2B integration projects are incredibly complex and require both internal and external users to be integrated to the platform, whether it is integrated into the numerous instances of an ERP platform that may be located in different regions around the world or simply ensuring their external trading partners can connect to the platform seamlessly.
The success of such projects depends on having the right resource available to undertake the integration work. However, once these two platforms are integrated, the new platform can bring significant benefits to the company, for example, by improving operational efficiencies and offering improved visibility and collaboration across the extended enterprise.
The ERP systems have traditionally focused on supporting and processing information for internal business systems, however, as we’ll explain in a moment, a significant amount of the information entering in the ERP environment actually comes from the external business partners. Once the information has entered an ERP environment, it will then be rooted to the appropriate modules such as warehouse managements, production information or inventory management system.
In most cases, this information will then support internal business processes or manufacturing processes but if, for example, you are in the manufacturing sector, you may need to send this information back out to contract manufacturers, trading partners or logistic partners who may be supporting your business operations.
So providing a seamless way to send information in both directions across a highly available B2B platform is important. As I mentioned on the first slide of this Webinar, unless your ERP system can support two-way connectivity with the extent of enterprise, then it can be considered incomplete.
Let me explain further in a moment. To try to get a better understanding of how companies were integrated in their ERP and B2B systems together and to get a better appreciation of the day to day problems encountered with operating in these environments, GXS has sponsored a study with a research panelist.
The study had around 120 respondents from the retail, CPG, automated and high tech industry sectors. The aim of this study was to ultimately prove the success of many ERP projects can be directly associated with a level of integration that exists with their respective B2B platforms.
Some of the key findings from the study are showing in this slide. Two results that I’d like to draw your attention to was that respondents said that upon average, 34% of data feeding ERP systems were sourced from outside the enterprise and 79% of respondents said that they had exceptions or problems on more than 1% of inbound B2B transactions.
I’ll expand on these results in more detail in a moment. But what types of ERP projects that companies are embarking on today? Here are a few examples of some of the more public ERP related projects that are being undertaken, each of which provides an ideal opportunity to think about integrating to a B2B platform.
Global expansion of many companies has led to many ERP instances being established around the world and with increased IT budgets now, many CIOs have taken the opportunity to retire older platforms and implement new integrations instead.
ERP consolidation projects could be undertaken as the result of a merger and acquisition process whereby the acquired company may be asked to adopt the ERP platform with new owner. Alternatively, if a company is divested as a separate operation, this new company would have a requirement to establish their own instance of an ERP system.
Starting from a clean sheet of paper such as this will allow ERP and B2B processes to be integrated from day one. Upgrading ERP instances from one revision to the next can also provide the ideal opportunity to integrate to an ERP system.
Finally, introducing new extensions to an ERP system, such as those used across the supply chain, for example, supply chain planning or improving treasury banking relationships, can also present a great opportunity for integrating ERP and B2B platforms together.
In each case, the company should try to minimise the amount of disruption across the supply chain and find a way to smoothly integrate in the two platforms together. The findings from the study concluded that in order for the companies to maximise the ROI – return on investment – from their ERP projects, they had to address a number of key issues, namely, how to ensure that externally sourced information can flow smoothly into an ERP environment.
A higher availability of B2B systems is critical to a smooth operation of ERP platforms, poor quality external data needs to be reworked before entering and ERP system and B2B systems are vulnerable when resources are diverted towards more important ERP projects.
So let me now cover each of these four areas in turn. ERP systems use information from a variety of external sources, for example, distributors, logistics providers and financial services institutions, for example. This information could originate in numerous business systems and could’ve been created using different industry related standards.
Due to the global nature of many companies, there are constant challenges with onboarding supplies and getting them integrated to a company’s ERP platform. The onboarding capabilities of a vendor such as GXS can really help to accelerate the speed with which new trading partners are connected to the integration of the platform.
Irrespective of their technical capabilities, GXS can ensure that trading partners have the correct electronic trading capability in place and at the same time, provide a seamless integration of the ERP systems. As ERP systems receive information from a variety of external partners, there is an increased chance that unchecked, inaccurate data could enter and ERP platform.
Quite often, information from external sources is not clean enough to be processed correctly by the ERP system. This will quite often lead to a manual rework of the incorrect information to try and make it more compliant. If unchecked, information is last entered in an ERP system, then there is a chance that it could spread into other business systems leading inaccurate information being used across the extended enterprise.
A simple mismatch of part numbers, for example, could lead to incorrect electronic documents being created, which could potentially result in delayed payment to suppliers. For many companies, having access to real time information from outside the enterprise, and ensuring that the platform is available 24 by 7 is crucial to the operation of that business.
The B2B platforms ensure that information from outside the organisation can be used efficiently by internal business applications such as ERP systems. If there is an interruption to the flow of transactions from outside an organisation, then the internal business systems can be really effective. For example, if a car manufacturer does not receive an advance, it should be noted from their supplier to notify them that the parts are on their way to a factory.
Then this could have downstream implications as well, for example, possibly shutting down a production line. Many companies that need to make business critical decisions ending in real time and therefore ensuring that transactions from external business partners get through to an ERP system without delay or interruption is extremely important.
ERP B2B integration requires an immense amount of coordination across the extended enterprise, ensuring that documented maps are created correctly, trading partners are all connected properly, but more importantly, any changes made to the ERP system are reflected in the B2B system as well.
To achieve an integrated platform implies that any changes made to one system will be reflected in the other or by Sersa. During an ERP B2B integration process, numerous change requests will be issued to modify one or other of the systems.
This change management process needs to be managed and modified efficiently otherwise the implementation of the process will be significantly delayed. Having a dedicated program manager to look after the implementation can be a worthwhile investment. They not only ensure that valuable IT related resources are being used effectively, they’ll also ensure that the project comes in on time and more importantly, to budget.
They also offer support for testing and looking after the overall release and deployment for the newly integrated platform with the customer. Let us now take a look at how the cloud can help simplify the implementation of integrated ERP B2B platform.
Cloud computing environments have received a lot of coverage in the IT press to media over the past couple of years. Many CIOs thought that the cloud was juts hype, another buzzword that would disappear quickly. However, the hype surrounding cloud is very real indeed and it has fundamentally changed the strategies that have not just come to these looking to deploy cloud environment but also to software and service vendors who now provide these solutions.
Just look at the acquisitions that companies such as SAP have made in recent months to be to – to fill it out their cloud story. Many of the big software as service vendors have been rolling out new data centre infrastructures so that they can host these new cloud environments.
So some CIOs have decided to embrace the cloud and make it a core part of their company’s IT strategy. The example showed on this slide is from the CIO of Jaguar Land Rover is that a car manufacturer based in the UK who, after being divested in from Ford, said that they were to deploy car solutions for most areas of their business from using Google as the basis of their corporate email environment through to using GXS managed services to manage their B2B infrastructure.
Jaguar Land Rover decided to externalise the applications so that they could simplify and standardise and modernise their IT and B2B infrastructure. So we’re hearing a lot about cloud environment but what exactly are they? Cloud computing environment typically is comprised of three different components or layers.
Infrastructure as a service is a baseline. IS essentially provides the core backbone of the infrastructure onto which the rest of the cloud environment is built. For example, companies such as Amazon and EMC will provide extensive computing and storage facilities. And in the middle, we have a platform or service, or PAS, to provide the infrastructure to which the applications are developed, for example, GXS trading group, where its largest integrated cloud platform is a good example of a PAS environment.
And then at the top level, we have software as a service, or SAS, that provide the core business applications but effectively plug into the cloud environment. These are simply Web based in nature and are heavily optimized for operating across the Internet and cloud based environments, SAPs and business by design, for example, and GXS active logistics are good examples of SAS based applications.
Traditionally in trading partner communities, we potentially have to connect to a multitude of different business systems as shown on the left of this slide. And from an integration point of view, this becomes very complex very quickly By connecting your external trading partners to a cloud environment means they will have a single point of contact or entry into your organisation.
This will allow the trading partner community to get access to the highly available Web based set of tools for exchanging business documents electronically. Integrating business by a cloud environment can provide a number of benefits.
It provides global accessibility as all the applications are hosted by a central provider and it means that anyone in your company or across your trading partner community can get access to your B2B tools without using nothing more than a Web browser.
It also means that users will get a consistent user experience as well. Cloud environments can be deployed very quickly. Once again, as software as services are installed by a vendor at a central location, it means that new applications can be deployed in a very short timeframe and new users can be added to the environment with ease.
Cloud environments will allow you to build flexibility into your B2B environment getting access to the new functionality as of when you require it. In these uncertain financial times, cloud based environments allow a company to scale off or scale down their B2B needs very quickly, maybe as a result of winning a new contract or the need to onboard new trading partners very quickly, they need to scale down operations due to a new product coming near to retirement.
Finally, cloud based environments provide an idea way to manage a community of users with ease. Centralised management to the user names, passwords and contact details help to bring an extra layer of security to your B2B environment.
GXS B2B outsourcing environment is made up of three core components and it combines the investments in people, process and technology to deliver some information that improves the function and efficiencies as simplifies the integration between business applications and business and provides a way to establish a new B2B process and manage trading partner relationships.
It provides a company with a pool of experience from other B2B implementations around the world. And it allows a company to implement the latest B2B technologies and services without having to worry about learning how to implement the technology themselves.
This environment helps to shield the users from having to worry about resolving day to day technical issues relating to the new integrated platform. The environment provides a set of capabilities to help a company establish a best in class cloud based B2B environment.
This diagram tries to summarise the components of the B2B outsourcing environment from a cloud based integration point of view. We can take care of everything to the right of the red dash line shown on this slide.
Trading Grid, the world’s largest cloud integration platform, provides highly available infrastructures connected to trading partners in any region of the world. In GXS’ centre of excellence we can provide a service which can map between any document standard. We can offer transaction level visibility and we can implement score carding and reporting so that you can see a track of the performance of your suppliers.
We can also provide visibility into your order lifecycle and the logistics network. And program management, as I mentioned earlier, ensures that your B2B environment is implemented correctly. As discussed earlier, I designated a program manager who help define the scopes of the project and requirements and ensure that the project is completed on time.
The other roles of the program manager is to ensure that change requests and modifications to B2B infrastructure are completed correctly. When integrating with an ERP environment, the program management assures that any change requests that are carried across both the ERP and B2B systems.
From a systems management perspective, we can also provide system monitoring, security and proactive monitoring to provide alerts to any potential problems. We also provide data recovery services and a two year data archiving service as well.
And finally, many of the companies that are working on a truly global basis, we can offer multilingual 24 by 7 help desk support. So this service offers to proactively present monitoring as well so that if problems arise, they can be identified and resolved as quickly as possible.
From the B2B outsourcing perspective, GXS is very well positioned to help companies improve their ERP B2B integration project. B2B outsourcing allows the company to utilise external resources on a scalable basis. So as an integration project becomes more complicated or has to encompass different geographical size, then more resources can be pulled into the project as required. Many companies have regarded third party outsourcing vendors, such as GXS as an extension of their own IT department.
B2B outsourcing in a cloud environment allows trading communities and any associate onboarding processes to be managed and implemented much more efficiently. This allows ROI on an ERP project to be achieved much more quickly when new modules or transaction types have to be implemented across the trading community.
B2B outsourcing can lead to less risk of connectivity loss due to the greater investment and high availability infrastructures offered by vendors such as GXS. Finally, B2B outsourcing has the capability or wrapping a company’s ERP applications within an ERP firewall, thus allowing externally generated information to be checked before it enters the ERP system.
One of the main benefits of integrating ERP and B2B systems is that it is possible to establish what can best be described as a firewall around a company’s ERP application. The aim of this is to protect the ERP system and ensure that incorrect data does not enter the ERP platform.
Whether you are trying to protect your ERP system from information being sent in by customers, distributors, logistic providers or suppliers, integrating into a B2B system can provide a higher level of security around your ERP applications and downstream business processes.
GXS data quality and compliance solution helps to provide your ERP related systems by ensuring that only clean and accurate information that are bound by predefined business rules and checking procedures that are allowed to enter your ERP environment.
So how does B2B help to complete ERP? It can provide a highly available platform that allows information either internally or externally sourced to seamlessly enter an ERP system 24 by 7. It provides a way to mediate between any type of document format irrespective of where your trading partner or customer may be located around the world.
These document maps would then be maintained on an ongoing basis so if the features or functionality of applications change, then the maps can be updated accordingly. B2B helps to connect to any trading partner across the extended enterprise irrespective of the communication protocol being used, for example, it could be STP, OFTP2, or even SAP ALE or SAP PPI.
B2B integration can ensure that trading partners and ERP systems receive information by mediation between the various communication protocols. In addition, B2B integration to ERP helps to improve the way in which you manage and collaborate with your trading partner community.
This is especially important in today’s business environment where many companies are trying to be truly global or work with truly global business partners, offices or manufacturing plants. It is one thing being asked to develop an integrated B2B ERP platform but it needs to be deployed across your extended enterprise in a smooth and efficient manner.
B2B integration can certainly help to improve the quality of information entering an ERP system as explained by the firewall content earlier. And being able to proactively monitor transactions will certainly help to reduce the risk of other internal business processes or production lines being impacted in some way.
If your company has decided to divert IT resources into completing any ERP related project then you certainly do not want to leave your B2B platform exposed. B2B outsourcing can help plug the resource gap and offer a way to keep B2B integration projects on schedule.
So let me know briefly highlight some of the ERP B2B integration projects that GXS has worked on over the years. In these examples I’ll focus on how cloud integration has helped these three companies improve the accuracy of the inbound invoices, help GXS integration resources provide an extension to a company’s IT department and how our cloud platform checks its trading grid, provides a fully scalable and flexible platform to help support global manufacturing operations.
On the left-hand side, the tire manufacturer is one of the world’s leading suppliers of tires to the global automotive industry. And they operate across 72 production facilities in 19 countries. The main business issue that they were faced with was a need to improve the quality of invoices entering their Oracle based ERP platform.
They were having to spend too much time reworking invoices for their standard suppliers before they could be processed by the ERP system. So we deployed the data policy and compliance solution to help improve the accuracy of inbound invoices to this particular company.
DQC effectively created a firewall around their ERP applications with all inbound invoices now being checked against predefined business raw templates. The introduction of the EPC has helped to improve the accuracy and minimised the rework of invoices and downstream business process operate much more efficiently as well.
In the centre, the apparel manufacturer – this company is one of the world’s leading manufacturers of apparel, sports clothing. They design, source and manufacture a range of leading clothing brands. And the company consists of six major apparel divisions and their products are distributed and sold to a network of 200 leading retailers around the world.
This company was about to embark on a major SAP implementation. And after the CIO evaluates the internal IT skillsets, they realised they did not have the required integration skills to integrate the ERP and B2B systems together.
The CIO had to find a way, an alternative way, to run the project. GXS managed services was deployed to connect to and undertake ecommerce with over 200 global trading partners, 90% of which were customers and 10% were suppliers, as well as provide the necessary resources to manage the integration projects that created 280 maps and had a requirement to convert a number of documents into SAP iDoc format.
The key benefit that GXS brought to this company was we were regarded as an extension to that own IT department allowing them to not only get their SAP system implemented on time but ensure that it was fully integrated to the B2B platform as well.
The last example on the right-hand side, this company is one of the world’s largest tier one automated suppliers and they were provided – and they provide interior systems to many of the world’s leading car manufacturers. As a tier one supplier, they have to support their customers across multiple plants and locations around the world.
They’re also about to embark on a major SAP implementation and they saw this as the ideal opportunity to consolidate multiple EDI platforms under one provider. GXS managed services was deployed to provide B2B support to their operations in North America, Europe and Asia Pacific.
So working with a cloud integration provider who could provide global B2B standard support was really important to this particular company. The new integration platform provided full integration to SAP while also providing the added benefit of end to end visibility across all their business units.
Now I’ll briefly summarise while GXS helps complete the RP. So in conclusion, for ERP systems to function correctly, they need to be seamlessly connected to external trading partners to ensure that information can flow easily into and out of the ERP environment.
GXS, and in particular, our cloud based B2B integration platform is used by 500 companies from a B2B outsourcing perspective. And we have worked on many single and multivendor ERP projects over the last few years. These companies have derived significant benefit by moving this integration to a cloud based environment.
So we’ve helped companies to free up valuable resources so they can be used on other projects, and hence, they can focus on their core competencies. We can help to improve the quality of external resource information entering an ERP system. We have moved companies onto cloud integration platforms that provides us flexibility and scalability but should their business needs change, then the integration platform can be changed accordingly.
In short, GXS helps to provide the bridge for connection between an ERP environment and the extended enterprise. If you’d like to learn more about GXC cloud integration program, then please go to www.gxs.co.uk/cloud. To find out further information about how GXS can help maximise the return on ERP B2B integration projects, then please visit the Web site highlighted on this particular slide. You will find some useful resources for managing such projects.
The microsite shown on the left-hand side provides further information on the research study that I’d mentioned earlier on in this presentation and you can download a copy of the study from this site as well. The microsite shown on the right-hand side provides a more detailed overview of GXS ERP integration expertise and how B2B outsourcing can benefit SAP specific integration projects.
This site is available in U.S., UK, English and German languages. The Web addresses for both sites are shown on this particular slide. So this concludes this very brief Webinar.
I’ve got a couple of questions that are lined up that I’ll go through very briefly in just one moment. The first question – earlier in your presentation, you highlighted that you had worked on SAP and Oracle faced integration projects. Has GXS got experience working with companies who operate more than one type of ERP system within their company, i.e., as this would no doubt increases the complexity of ERP integration projects?
Yes we do have experience with working across heterogeneous ERP environments so we’ve worked with over 100 SAP and 25 on our correlated integration project. Many of these projects were with global enterprises who were going through the process of consolidating both ERP instances and ERP platforms.
GXS certainly has the integration expertise to integrate with many different ERP platforms. And, for example, we received one request a couple of years ago from one company that had 32 different ERP systems within their organisation.
So this particular environment not only consisted of legacy SAP and Oracle platforms, but those from JD Edwards and Microsoft Dynamics as well. At the end of the day, it doesn’t really matter where the ERP information is hosted. We can provide integration via our mapping service, thus helping to streamline activities between multiple ERP platforms.
And the second question – our company’s in the retail sector and in order to complete ERP as you describe it, we need to connect to electronically with trading partners of all sizes. You gave some good examples of large companies and how they integrated ERP to B2B but how does GXS work with smaller companies?
So I think certainly the introduction of cloud based services has made it easier for companies to connect electronically to their trading partners irrespective of their size or where they may be located in the world. GXS, you know, we have a number of B2B solutions targeted at smaller companies, for example, either a Web form based solution or a Microsoft Excel based solution.
We provide integration to small business ERP systems such as Microsoft Dynamics and we can provide a collaboration tools to simplify the onboarding process for the really small suppliers. Social business networks has certainly become another industry trend in recent months and GXS RollStream is certainly one environment that can certainly help with onboarding your trading product community so they can connect to the new integration platform.
So in summary, I would think we do have a broad range of cloud based solutions and services that we can offer so we can help to complete the ERP irrespective of the size of the business, industry or geographical location that you or your trading partners may be located in.
A couple other questions – so are there any predefined connectors for different ERP systems? And if so, for which? Well, we have focused in the long term on SAP and Oracle so we have a lot of experience working around those particular environments. We have a preconfigured connections via in SAP, ALE at that test – that environment.
And likewise, for Oracle as well, and also we struck up a relationship with Microsoft around Microsoft Dynamics a couple of years ago, so in terms of operating off the shelf integration and that’s really the main ERP environment but, you know, we have many companies around the world working with different ERP platforms and we can integrate as and when required to those different platforms.
So I think at the moment, those are the questions that have come through. If there are any more questions that you have directly for me, then my email address and contact details are shown on this particular slide. And if there are any further questions, please feel free to either contact me or contact us through the details shown on this particular slide.