What is B2B integration and how does it help businesses?
B2B integration is a term that the business world has been using for years. But what is integration in business? And why is it important for you to integrate B2B? Learn about B2B integration best practices and unleash its full potential.
As your business grows, you will likely be working with more suppliers and partners. While there are many benefits to collaborating with external suppliers, these connections can also be a challenge to manage, and might result in an extra workload that can adversely affect productivity and profit.
It’s a common scenario we have encountered many times, and it is one where B2B integration can make all the difference.
This is how it usually goes: a medium-sized company starts trading with one of the big guys, which means having to integrate with their systems. The medium-sized company receives all the standard documents (orders, stock returns, requests for quotes and payment confirmations etc.) electronically and automatically from the big corporation, and, in turn, it has to send everything back the same way. Initially “forced” to comply, the company soon realizes the advantages of using this same model with their other, much smaller partners.
Soon, the growing company is able to do things like: check raw materials supply status, set order metrics that link their incoming order book and material stock requirements for the next period, and match that with both the stock levels of their suppliers and, eventually, their real-time pricing. This means they can now auto-check their needs and auto-order from the best-priced suppliers at the time, seamlessly connecting their own and their partner’s ERP.
All of this is done automatically and using electronic document exchange. It lowers costs, improves profitability, takes time out of supply schedules and can improve cash flow massively. Human involvement is reduced, and error rates fall.
Why your business need B2B integration?
However big or small your business may currently be, it can benefit from fully implementing B2B integration. Regardless of the industry you belong to, B2B integration will bring some key benefits to your business:
reduced need for manual data entry – saving a lot of time and money
improved accuracy and efficiency – increasing productivity
real-time visibility into business processes – helping you react and adapt when it matters
enhanced collaboration with partners – allowing for better communication and easy partner onboarding
improved and simplified decision-making – helping you make informed strategic decisions or react rapidly in the event of issues such as delivery delay.
Maybe you are a small, family-owned business looking to make a move and work with more of the big players in your industry or you simply want to reduce your workload and have more free time, maybe to introduce new innovations or drive further business development.
Or, you are a supply chain company that needs to handle hundreds or thousands of transactions daily and you want to make sure everything runs smoothly, even on days when you need to process peak volumes of transactions, for example on sale days or those critical days before holidays.
No company is too big not to need, or too small not to benefit, from digitalized and automated B2B data exchange.
How B2B integration works
So what is business integration exactly? The business integration definition is: a way of connecting different digital systems, applications, technologies and protocols in a way that they are able to communicate and exchange information. Similar to how two people who speak different languages can communicate if they both speak a third, common language, for example, English. Business-to-business integration enables technologies that speak different languages to find common ground. And it does its job very fast, much faster than any human.
There are four basic steps of the process:
extract information from source application – this could be a purchase order (PO) document
convert the format of the document to a standardized format that can be shared and read
send the information (document) using the agreed transport protocol
the target system receives the information and transforms it back from a standardized format into a locally accessible document.
The example above illustrates communication with external systems, but B2B integrations can also be used for communication of your company’s internal systems.
Types of B2B Integration
When we look at types of integration, we can classify them from two perspectives – what is integrated – data or people – and how it is integrated or the architecture of the solution.
data-level integration – used in the example above with the purchase order or in any transaction between various business processes, such as order-to-cash or procure-to-pay
people-level integration – used for community and customer management, automated collaboration between partners such as financial institutions or logistics providers
cloud B2B integration solution – cost-friendly, simple to use and the most convenient
on-premise B2B integration solution – hands-on internal control, but requires substantial time, resources and technical expertise, and it can pose a problem if you decide to relocate
hybrid B2B integration solution – the convenience and lower cost of a cloud solution combined with the flexibility and control of an on-premise solution, but it still requires some significant internal input and expertise.
After 15 years of being in the B2B integration business, we can say that EDI (Electronic data interchange) B2B integration is the best option as it offers easy automation of crucial business processes and meets the expectation of full visibility of processes.
Omnizon enables cloud-driven B2B integration which is usually the best choice for businesses, especially those without extensive internal resources. Cloud-based EDI B2B integration allows you to process all your important data quickly and securely, using a single platform, at the same time offering flexibility and adaptability. That means you can implement new processes as your business evolves, and your EDI solution will evolve with it. It ensures true scalability and helps companies grow, while also being the most worry-free option.
What is an example of B2B integration
Let’s take, for example, an automobile manufacturer who wants to procure raw materials.
According to our experience, the process of getting steel without B2B integration would look something like this:
contact suppliers for availability and pricing
analyze and compare
choose the supplier
send purchase order
make the payment
receive a receipt.
With B2B integration, the automobile manufacturer can do the following:
check the raw materials supply status from various suppliers simultaneously
set order metrics that link the incoming order book and material stock requirements for the next period
match that with both the stock levels of suppliers and their real-time pricing
auto-order from the best-priced supplier
Top benefits of a B2B integration solution (by industry)
No matter which industry you belong to, you can achieve great benefits if you use B2B integration. Here are some practical B2B integration examples by industries.
Manufacturing: Easily exchange buyer and supplier information, manage procurement and delivery, and integrate various file formats and engineering files.
Wholesale and distribution: Process orders quickly, stock the right amount of inventory, reduce chargebacks, time and fees, and securely communicate with financial institutions.
Food & beverage: Gain greater visibility into the supply chain, plan inventory with greater accuracy and less waste, easily track a shipment to its source in the event of a recall, and comply with safety regulations.
Transportation and logistics: Ensure accurate and timely delivery of everything from purchase orders to shipment confirmations, integrate warehouse management systems, maximize the cost efficiency of load tendering and ensure contract compliance.
The Challenges of B2B integration
Both in-house and cloud-based B2B integration solutions may face some challenges when it comes to end-to-end implementation.
The process may seem intimidating and complex.
You need to consider the resources you will have available.
New technologies evolve all the time, and it takes effort to keep up.
There is a wide range of communication protocols to support.
Trading partners may be resistant to changing the way they work.
Government regulations change and require adaptation.
However, it is important to be aware that, even though integration does not happen overnight, employing help from industry experts and professionals and investing time to develop a well-structured plan best suited to your business is a worthwhile investment in your future. It is like creating an effective exercise plan – it may seem complicated when you are starting out, but with the right guidance you can quickly experience all the benefits and make significant progress. And it all depends on what your specific needs are, so choosing a reliable B2B integration solution provider is the first step along the way.
The Future of B2B integration
With the ever-evolving trends and technologies, we can be sure that the future of B2B integration will be characterized by flexibility, which is crucial to be able to adapt to all the changes and challenges, and also by simplicity, as it is designed to help people and make their lives easier. The time and resources needed to achieve this will continue to diminish as new advancements are made, and business will no longer need to do the heavy lifting. Instead, integration will be done for you by seasoned, integration professionals, and you will in turn gain competitive advantage and agility.
Get B2B integration done right with Omnizon
Sometimes when our customers look at where they sit on the B2B integration journey it can look both scary (Are we getting left behind?) and daunting (This all seems so complex). A very common and completely understandable concern is: How can we do this by ourselves at an affordable price?
This is where Omnizon can be your trusted partner. Our B2B integration platform has been helping businesses like yours for years and we understand not only the challenges, but also the fears that may be involved.
We offer a simple to implement and straightforward to use integration platform that you can try for free: for as long as you like and which can be used for real business. We will only charge once you want to move beyond the entry-level number of partners and documents.
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