M A R C H 2 0 1 4 B2B Operational Intelligence This white paper describes how B2B Operational Intelligence safeguards your supply chain against non-compliant B2B data in the order lifecycle, ensuring that your trading partners comply with your business requirements.
Table of Contents Bad Data and Process Violations Negatively Impact Your Business... 3 B2B Operational Intelligence Solves the Problem.... 4 Elements of an Effective B2B Operational Intelligence Solution.. 4 Benefits of Getting It Right.... 6 B2B Operational Intelligence in Action.... 6 The Bottom Line: Best-in-Class Supply Chains Rely on B2B Operational Intelligence... 7 Learn More... 8 About OpenText... 8
Bad data entering back-office systems, such as your Enterprise Resource Planning (ERP) System, Transportation Management System (TMS), or Warehouse Management System (WMS), can have a disastrous impact on the efficiency and reliability of your supply chain. In addition, it may impact certain rules that ensure the efficiency of your supply chain, for example, an ASN must be sent within a specified time after receipt of a purchase order or received by the ship date specified on the purchase order. B2B Operational Intelligence is the way to ensure that your supply chain is not adversely impacted by bad data and that your process-specific rules are in compliance with your business requirements. B2B Operational Intelligence can be provided in-the-cloud or via on-premise software. Bad Data and Process Violations Negatively Impact Your Business Some examples of bad data that can pollute the performance of your ERP or other backoffice system include: n Incorrect information such as shipment address, part number, delivery date it takes my team an average of six man-hours to back-out and clean up just one bad file. MULTI-BILLION DOLLAR COMPUTER SERVICES COMPANY n Missing critical order data, such as purchase order number on an invoice n Conflicting data across documents such as part numbers or a shipment s destination n Incorrect formats, such as integers instead of decimals, wrong date format Some examples of common business process violations are: n No ASN ever received n Goods received before arrival of the ASN n Invoices received without prior purchase order n Duplicate invoices Some indications that your business is being negatively impacted by bad data and process violations are: n Wrong or incomplete shipments or unplanned shipment arrival n Supply chain problems come to your attention after it s too late to avoid the consequences, such as paying duplicate invoices or crucial shipments that don t arrive on time n People are spending too much time on the phone; either in follow up and tracking or in resolving issues n IT personnel are spending too much time cleaning up bad data that has permeated throughout back-office systems n IT personnel spend too much time responding to line-of-business inquiries, such as inquiries from Order Management or Vendor Compliance n Delays in or incorrect payments, affecting cash flow n Trading partners continually violating process rules ENTERPRISE INFORMATION MANAGEMENT 3
B2B Operational Intelligence Solves the Problem Best-in-class companies solve the bad-data and process violation problem by implementing a B2B Operational Intelligence solution, which monitors transactions as they flow through the trading network before they enter the back-office systems. B2B Operational Intelligence solutions act as a firewall that protects internal systems by identifying bad data and then rejecting or quarantining it in-transit. Furthermore, B2B Operational Intelligence provides visibility into potential problems, mechanisms to contain them, and alerting capabilities to notify those who can resolve problems the fastest. This in-transit processing performs all the value-matching and rule validations on each transaction. Documents with missing or incorrect values are automatically set aside to be evaluated prior to processing by internal systems. This ability to react immediately to business anomalies prevents major issues resulting from bad data, and it helps make a company truly agile. A BEST-IN-CLASS MODEL FOR THE ORDER MANAGEMENT PROCESS HAS THREE COMPONENTS 1. B2B Operational Intelligence, which acts as a firewall to prevent bad data from entering back-office systems 2. The back-office system itself, which can now process efficiently with verified data 3. The business intelligence system, which analyzes the data fed from a clean internal system for business trends and other decision-making information B2B Operational Intelligence vs. Business Intelligence Some business managers believe that their bad-data risk is mitigated by their ERP and/or translator. While it is true that ERP systems are designed to catch certain data problems, they can act on errors only once they have entered the system. And many ERP systems and translators do not have the rigorous monitoring capabilities needed to eliminate data errors that are introduced from external sources, including business partners. Some may ask how B2B Operational Intelligence is different from Business Intelligence (BI) tools. The difference is when the intelligence is available. Business intelligence solutions find problems after they occur, while B2B Operational Intelligence solutions detect problems and provide actionable information before internal processing begins, enabling proactive resolution of issues. B2B Operational Intelligence acts as the front line, enabling internal systems to operate more efficiently. Elements of an Effective B2B Operational Intelligence Solution An effective B2B Operational Intelligence solution should include these key elements: n Seamless operation with supply chain processes n Integration support for any structured data, including EDI, XML, CSV, or flat files n Flexible business rules configuration that is powerful enough to handle even the most complex, company-specific rules and vendor compliance scenarios n Scalable architecture that performs at the speed of your business ENTERPRISE INFORMATION MANAGEMENT 4
n An easy-to-use interface that requires minimal training for line-of-business managers, enabling self-service and reducing the number of requests to IT n Role-specific visibility for your employees and business partners into operations and critical real-time events with actionable information, enabling timely decision-making n Scorecard capability that provides visibility into supplier performance and which, when coupled with easily accessible detailed performance data, enables productive performance improvement discussions with suppliers n Ability to create issue resolution workflows and alerts tailored to your specific business processes Active Intelligence BACK-OFFICE SYSTEMS AUTO- IDENTIFY REJECT BAD DATA TRACK FAILURES DIRECT CONNECTIONS TRADING COMMUNITY CUSTOMERS B2B OPERATIONAL INTELLIGENCE VALUE ADDED NETWORK SUPPLIERS 3PL/4PL CARRIERS DISTRIBUTORS WEB PORTAL FINANCIAL INSTITUTIONS PROCESS VALIDATION PROACTIVE ALERTING BUSINESS FRIENDLY OTHER B2B Operational Intelligence for Supply Chain Order Management You can purchase B2B Operational Intelligence for your in-house system or you can use a software-as-a-service (SaaS) option. Using SaaS to provide B2B Operational Intelligence will greatly minimize the impact on in-house resources. Also, vendors that offer a SaaS solution have internal teams with years of process-specific experience available as needed. In the long run, strategic use of SaaS vendors can help an organization deliver more value to its customers by allowing them to avoid distractions and focus on what they do best. ENTERPRISE INFORMATION MANAGEMENT 5
Benefits of Getting It Right In addition to the obvious benefits of having accurate, reliable data in your system and ensuring that all business partners are adhering to your business rules, additional cost savings and improved productivity can be realized through the implementation of a B2B Operational Intelligence solution. As research firm SiriusDecisions highlights, It takes $1 to verify a record as it s entered, $10 to cleanse and de-dupe it and $100 if nothing is done, as the ramifications of the mistakes are felt over and over again. In addition to the calculable cost savings realized by avoiding the bad data in the first place, B2B Operational Intelligence provides the visibility and metrics to enable you to spot trends for better decision-making and planning. It also enables you to monitor and track supplier performance against Service Level Agreements (SLAs) so that corrective action can be taken or new processes implemented. Effective use of B2B Operational Intelligence translates into greater productivity for the line-of-business staff, enabling areas such as order management, vendor compliance, and accounts payable to lessen their dependence on IT personnel for current status information. Rather, B2B Operational Intelligence provides line-of-business personnel direct visibility into the system to answer their questions. Consequently, IT staff members have more time to devote to higher value tasks, such as ERP backlog cleanup, instead of problem solving or responding to line-of-business staff inquiries. B2B Operational Intelligence in Action B2B OPERATIONAL INTELLIGENCE n Acts as a firewall to ensure the integrity of your supply chain management system by preventing bad data from polluting back-office systems n Extends visibility to all lines of business n Eliminates exception management fire-fighting n Can reduce millions of dollars of overpayments n Improves accuracy, completeness, and timeliness of electronic transactions Leading Retailers Report 75% Reduction in Manual Effort Benefits of a B2B Operational Intelligence solution apply to a wide range of industries, including retail, technology, and manufacturing. For example, consider the case of a leading discount retailer that supports its 1,700 stores with 37 distribution centers that use a B2B Operational Intelligence solution to provide automated rejection of non-compliant and business rule-violating transactions. For this retailer, all documents with missing, incomplete, or bad data are quarantined prior to being entered into the SAP system. In addition, the retailer s B2B Operational Intelligence system has the ability to scorecard vendors for accuracy of data and compliance. As a result, productivity has increased significantly, the B2B information technology staff is now able to focus on more critical issues, and partner compliance has increased due to detailed violation alerts. Major retailers report significant benefits from the use of B2B Operational Intelligence, including: n Reduction of their manual efforts by more than 75% through automating a three-way document-matching process n Saving of substantial hours by providing a single interface for all disputed research, regardless of back-office system n Improvement of on-time fill rates by tracking ASN accuracy and data quality ENTERPRISE INFORMATION MANAGEMENT 6
Leading Communications Components Supplier Reports 60% Improvement in Data Timeliness A leading supplier of components for communications instituted an Operational Intelligence solution to prevent unwanted transactions from entering its systems after duplicate transactions were causing incorrect decisions to be made and required IT resources to clean up and back out the duplicates. Automating the process resulted in a 50% reduction in manual effort. Also, the solution proactively monitors for expected transactions and sends an early notification for missing information. This resulted in a 60% decrease in late or missing data. Global Tire Manufacturer Increases Visibility into Partner Performance A global tire manufacturer implemented a B2B Operational Intelligence solution to prevent bad data from entering the enterprise and corrupting reports. It also reduced delays by automatically matching orders to invoices for items the ERP system had been unable to match. They also realized significant benefits from increased visibility into trends and root-cause analysis for partner performance problems. The Bottom Line: Best-in-Class Supply Chains Rely on B2B Operational Intelligence A significant amount of industry research and empirical knowledge highlights the high costs associated with bad data and lack of visibility. Most of the costs are in the form of extra labor, but companies that fail to correct their data problems also pay the price through an eroding customer base. B2B Operational Intelligence helps best-in-class organizations stem the need for wasted labor by reducing the amount of bad data entering back-office systems. Because companies that deploy B2B Operational Intelligence spend less effort to correct problems, they can focus on delivering more value to their customers by running a more visible and effective business. Being best-in-class is about providing maximum value to both you and your customers on a consistent basis. A well-designed B2B Operational Intelligence solution is one of the three cornerstones of best-in-class supply chain management processes along with ERP/similar back-office and business intelligence systems. B2B Operational Intelligence: n Acts as a firewall to ensure the integrity of your supply chain management system by preventing bad data from polluting back-office systems n Extends visibility to all lines of business n Eliminates exception management fire-fighting n Can reduce millions of dollars of overpayments n Improves accuracy, completeness, and timeliness of electronic transactions ENTERPRISE INFORMATION MANAGEMENT 7
Learn More To learn more about how a cloud-based Operational Intelligence solution for B2B can provide your business users with actionable information and improve the accuracy, completeness, and timeliness of your electronic transactions, read about OpenText GXS Active Intelligence at: www.gxs.com/b2boperationalintelligence About OpenText OpenText provides Enterprise Information Management software that enables companies of all sizes and industries to manage, secure and leverage their unstructured business information, either in their data center or in the cloud. Over 50,000 companies already use OpenText solutions to unleash the power of their information. To learn more about OpenText (NASDAQ: OTEX; TSX: OTC), please visit www.opentext.com. The OpenText Information Exchange suite of products and services provides market-leading fax, document exchange, messaging, notifications, and EDI solutions for businesses ranging from the smallest office to the largest enterprise. OpenText on-premises and cloud-based solutions can deliver even the largest files quickly, securely and reliably in the format of your choice. READ ABOUT OPENTEXT GXS ACTIVE INTELLIGENCE AT: www.gxs.com/b2boperationalintelligence www.opentext.com NORTH AMERICA +800 499 6544 UNITED STATES +1 847 267 9330 GERMANY +49 89 4629-0 UNITED KINGDOM +44 (0) 1189 848 000 AUSTRALIA +61 2 9026 3400 Copyright 2013-2014 Open Text Corporation OpenText is a trademark or registered trademark of Open Text SA and/or Open Text ULC. The list of trademarks is not exhaustive of other trademarks, registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text SA or other respective owners. All rights reserved. For more information, visit:http://www.opentext.com/2/global/site-copyright.html (03/2014)01833EN