Out of a recent survey of 120 mid-to large-sized companies in the UK, the majority (41%) of the 26 manufacturers which responded are top tier B2B integration performers (compared to 23% mid-tier and 36% bottom tier).
B2B Integration is the flow of information (or data) from one business organisation to another business. So in the manufacturing sector, this could be throughout the supply chain process, ensuring all data is understood and up-to-date.
Those in the top tier are three times more likely to be doing well financially and four times as likely to be growing, than the bottom tier. The survey, by IT Analysts Freeform Dynamics, was commissioned by Liaison Technologies, a data integration specialist.
Almost all (94%) of the manufacturers surveyed are completely satisfied with their B2B integration capability, compared with other business sectors, such as finance and engineering, which acknowledge they are behind the curve but have no current intention to drive improvement. Almost 80% of all top tier respondents cite operational cost reduction, from more B2B efficient processes, as a ‘compelling benefit’. Reduction in the cost of inventory, from reduced stocking levels, was also amongst some of the top benefits. The research suggests that these benefits often only become clear in hindsight.
B2B integration is an essential capability for all UK organisations in an increasingly connected and interdependent global economy. Over 80% of top tier performers rate themselves as being ‘significantly’ or ‘a bit’ ahead, compared with 48% of bottom tier performers, who rate themselves as being ‘significantly behind’.
One of the main difficulties in achieving better B2B integration, which is mirrored across all sectors, is lack of clear ownership and support at management level. Poor internal systems and information can seriously undermine performance.
Automating the way a business connects, communicates and transacts across extensive global supply and demand chains can have a massive impact on the overall cost of doing business. It comes as no surprise that that top tier performers are three times more likely to be doing well financially than the bottom tier, and four times as likely to be growing.
According to Dale Vile, research director at Freeform Dynamics and regular commentator on B2B integration issues, the findings shine the spotlight on a fundamental misconception about B2B integration. He said: “Decades of relying on bespoke solutions have conditioned many to accept high costs and inflexibility as norm, especially when large managed service firms are in the mix. It’s clear from our study that the shortcomings of B2B solution providers have played a significant part in perpetuating the low levels of integration we see among UK businesses.”
Mikko Soirola, vice president of Liaison Technologies, believes that the subject of B2B integration needs to be a top focus for financial institutions. He said: “Poor IT integration has really hit the headlines recently and what is surprising is that these incidences will become a lot more common if people don’t address the issue.”
Soirola concluded: “Because of the benefits it can deliver when done correctly, I feel that B2B integration should be viewed as one of the most profitable strategic initiatives for financial institutions rather than an inconvenient cost. UK firms that wish to remain competitive should make an honest assessment of their current B2B capabilities and, if they are underperforming or accepting sub-standard solutions, should refuse mediocrity and raise their expectancies. The specialists are out there and the market may be pleasantly surprised by both expertise and costs.”
The survey was conducted by independent research firm Freeform Dynamics. The full findings of the white paper ‘Effective B2B Integration: Challenges, Practicalities and keys to success’ is available at: http://liaison.com/drip-pages/uk-drip-pages/eu-b2b-trading-partner-research-report
