Centralization and consolidation of back-office functions can bring impressive efficiency and cost savings. But things are never that simple. How can you gain control and visibility into fragmented B2B networks and infrastructure?
Many organizations are consolidating back-office functions across business units, companies and geographical locations. Some establish Shared Service Centers to provide non-strategic roles such as accounting or HR to the entire organization. The benefits come not only from cost reduction but more frequently from increased productivity and quality of service. By centralizing or consolidating functions such as B2B e-commerce your business becomes more agile as it can grow quickly without the expense of re-inventing or extending your back-office functions.
Most medium and large organizations will have developed piecemeal B2B solutions over time. This is very often on a national or business unit level. The result is a trading community supported by a number of different solutions from a number of different suppliers on a number of different platforms. Merger and acquisition adds further to the challenge by introducing the necessity to consolidate an entire new set of B2B systems.
Areas to address: Increasing complexity
Most B2B infrastructures have developed on a national basis. There can be very good reasons for this: a devolved business strategy or the ability to identify and select suppliers with the correct local market solutions. However, once the organization begins to consolidate its B2B solutions, it soon discovers that it is supporting a huge range of document types, communications protocols and technical standards. In addition, the expertise on each of these areas is held locally. Even consolidating in a few regional centers takes extremely careful planning and implementation.
Areas to address: Multiple providers, multiple service levels
One key goal of consolidation must be to benefit from economies of scale. Yet, it is likely that different business units and countries have their preferred providers – especially where they are using Value Added Network (VAN) providers. Each business unit will have their own service levels and cost structures. In some cases, a VAN can be working with two separate business units and charging different pricing to different SLAs. The organization will have to manage a series of different contracts. By consolidating onto a single B2B infrastructure, managed by a single global provider, you can ensure you receive the highest level of service at the keenest prices on a single central contract.
Areas to address: Global supply chain visibility
The piecemeal trading networks that many organizations have today make it almost impossible to know what is happening across their entire supply chain. There is little or no possibility of the real time data flow or decision making needed to fully capitalize on the business opportunities in supply chain optimization. By consolidating onto a single B2B infrastructure, you gain much more control over all aspects of your supply chain. You can begin to better manage supplier performance and service customer demand.
The role of B2B Managed Services
Often, properly consolidating operations gives you the opportunity to start fresh. You have the alternative of integrating all your disparate B2B networks, trading partners and supplier contracts into a centralized operation or selecting a third party with global reach that can quickly onboard your internal systems and trading partners onto their infrastructure. In most occasions, the costs associated with the second option are significantly less than maintaining the B2B systems in-house, while giving access to the advantages a Managed Service provider delivers in terms of future-proofing and disaster recovery.
Issues to consider
- How many B2B networks are there within your organization?
- In how many countries do you have trading partners?
- How are your trading partners currently supported?
- How many VANs does your organization currently use?
- Are you getting the best price for your B2B transactions?
- Do you have complete view of your global supply chain?