Achieve Operational Excellence
through Your B2B Exchange
Presented by Michael Hurley
NEECOM Spring Conference – May 11th & 12th
My background
• Nearly 20 years of
technology and consulting
experience
• B2B software, enterprise IT
and custom software
development
• Responsible for 1 EDI
Source’s product
development and marketing
Overview
• The Promise of EDI
• 5 Levels of EDI Enablement
• Considerations
Best in Class Results
• 50% reduction in shipment cycle time
1
• 30% fewer invoices requiring manual intervention
• 27% fewer disputed invoices
2
• 20% reduction in order to cash cycle time
•
•
•
1 “EDI: Workhorse of the Value Chain”, Supply Chain Insights, 2013
2 “The Order-to-Cash Cycle”, Aberdeen Group, 2011
3 “The Future of EDI” Forrester, 2011
3
2
Doing EDI well is NOT EASY
IT Complexity
• Different Standards
• Standards Versions
• Trading Partners
Specifications
• Data Mapping
• Data Integration
Business Complexity
• Timeliness Requirements
• Data Accuracy
• Changing Business
Requirements
• Financial Implication of
Non-Compliance
Neither is the Value Understood
Lack of understanding of the potential
business impact of EDI
Perceived Impact
• Low
• Just a Commodity
• Merely File Transfer
and Communications
Actual Impact
• Very High
• Tailored Solution
• Value Added Business
Process and System
Every EDI error represents unnecessary cost!
Common EDI Enablement Themes
• Developed an EDI Enablement framework to
guide companies through their EDI journey
– Supporting thousands of companies
– 25 years of experiences
• Representing common patterns and
opportunities to impact business performance
Relevant
Actionable
5 Levels to Achieve
Operational Excellence
Level of EDI Impact
Collaborate
Manage
Optimize
Operational Excellence
Data Exchange
Automate
Comply
Operational Excellence
Questions to Consider
• How are you operating in each of the different
levels?
• Do you support different trading partners at
different levels?
• Do key business stakeholders understand the
impact and opportunity of EDI?
• Are you experiencing the challenges that will
prompt you to consider moving to the next
level?
LEVEL 1: COMPLY
Value of EDI Enablement
• Enables companies to serve high
volume customers
• Satisfies critical business
requirements of new or existing
customers
Requires Quick Action
• Quickly become EDI capable
• Only basic EDI documents
• Typical Characteristics
– Few trading partners
– Low document volume
– No ability to integrate
Two Options
Option 1
Customer
Provided Portal
Option 2
Web Based EDI
Forms Solution
Only a Fraction of the Value
• Benefits focus on compliance
• Processes remain manual
• Customer reaps most all of the
benefits of full EDI enablement
Why to Consider Level 2
• Increased document volume
• Overwhelmed by manual processes
• Complexity of multiple customer portals
• ERP investments now support integration
• New trading partners increases workload
Recognize the value of an integrated B2B exchange
LEVEL 2: AUTOMATE
The Time to Automate
100+
Number of documents
exchanged per month
Automation Checklist
EDI Translator
Data Mapping
ERP Integration
5+
Number of Trading Partners
engaged in the B2B exchange
Process Monitoring
Business Process Change
Includes EDI Process Checks
• An automated B2B exchange should
monitor for EDI process compliance
– EDI standards validation
– Functional Acknowledgment
Reconciliation
– Duplicate documents
Value of Automation
Decrease Costs
Enhance Customer
Satisfaction
Increase Speed
Improve Scalability
Eliminate manual data entry
and costly rekeying mistakes
Improve data accuracy
and accurately fulfill client orders
Streamline processes
and create efficiencies
Support higher document volumes
and additional trading partners
Why to Consider Level 3
• Fail to realize process efficiencies as EDI
documents continue to need manual review
• Too many errors get through the process
• ERP lacks checks to warn of non-compliance
• Lack of predictability when onboarding new
trading partners
The flow of data is anything but seamless
LEVEL 3: OPTIMIZE
Illusive Benefits of Automation
Automation of documents has eliminated
errors due to manual entry
…but errors persist that increase
costs and impact business
performance and customer
relationships
…the solution is to leverage custom
business rule alerts so you can manage
by exception.
Value When EDI is Optimized
Remove Customer
Friction
Identify exceptions before
they snowball into larger problems
Achieve
‘Smoother’
Interactions
Transactions are fully automated
without manual intervention
Shorten Order to
Cash Cycle
Quicker order turnaround cycles
by loading the right orders faster
Scale Your B2B
Exchange
Manage by exception rather than
reviewing each and every document
Optimize Your B2B Exchange
Validate that your documents are:
1
Sound
2
Accurate
3
Complete
4
Timely
5
Consistent
Optimize Your B2B Exchange
Validate that your documents are:
1
Sound
Documents are internally sound
and consistent within themselves
2
Accurate
Example Scenarios
3
Complete
4
Timely
5
Consistent
•
•
•
ASNs line items and totals
balance
Invoices line items and totals
balance
Discounts and allowances
properly calculated
Optimize Your B2B Exchange
Validate that your documents are:
1
Sound
Trading Partner data aligns with
your internal data
2
Accurate
Example Scenarios
3
Complete
•
•
4
Timely
•
5
Consistent
•
Incorrect mapping (ship dates)
Missing setup data for ship to
locations or new items
Pricing violations when customer
price does not match internal
prices
Unit of measure inconsistencies
Optimize Your B2B Exchange
Validate that your documents are:
1
Sound
Documents may be missing key
required information
2
Accurate
Example Scenarios
3
Complete
4
Timely
5
Consistent
•
•
•
•
Missing carrier tracking number
on an outbound ASN
Discount information at the
header or item level
Freight charges on Invoice
Customer part numbers in lieu of
internal numbers
Optimize Your B2B Exchange
Validate that your documents are:
1
Sound
2
Accurate
3
Complete
4
Timely
5
Consistent
Documents are timely based on
your trading partner’s
requirements
Example Scenarios
•
•
•
•
PO Acknowledgments
Processing of PO changes
ASNs are sent on time per the
correct dates
Invoices are sent promptly
Optimize Your B2B Exchange
Validate that your documents are:
1
Sound
2
Accurate
3
Complete
4
Timely
5
Consistent
Data is consistent between
documents in a business
transaction
Example Scenarios
•
•
•
•
•
Item Pricing
Quantity Shipped
UPC or Item Numbers
Invoice line item numbers
Unit of Measures
Why to Consider Level 4
• Functional teams struggle having lost visibility of
key business documents when the process
became automated
–
–
–
–
Limits their ability to advocate for a customer
Results in continued requests to perform “EDI research”
Must be trained to read EDI syntax
Customer relationships suffer when information is not
readily accessible
Despite improvements, management remains within IT
LEVEL 4: MANAGE
Implications of Automation
• Automation with business rules provides
incredible business value
EDI
• But automation conceals the documents
from those who need it most
To Manage Requires Visibility
Right Information to the Right Person
1
Orders Change
2
View the Source Data
3
Non-Integrated Documents
4
Related Documents
5
In a Format they can Understand
The Need for Visibility
Right Information to the Right Person
1
Order Changes
2
Source Data
3
Non-Integrated
4
Related Docs
5
Understand
Duplicate POs
• Identify when a PO is received
more than once
• How will you plan to handle a
duplicate PO?
PO Change Requests
• Does your ERP support
Purchase Order Change
Requests (860)
The Need for Visibility
Right Information to the Right Person
1
Order Changes
2
Source Data
3
Non-Integrated
4
Related Docs
5
Understand
Exact Data Received
• Prices provided by your
customer
• Shipment date expectations
on the PO
• Text notes in a PO
• Rounding on Invoice line
items and totals
The Need for Visibility
Right Information to the Right Person
1
Order Changes
2
Source Data
3
Non-Integrated
4
Related Docs
5
Understand
Some documents have no home in
your ERP
• Text Messages (864)
• Application Advice (824)
Who should review them
• Are documents getting to the
right people in your
organization?
• How are they being delivered?
• Do they know how to read
them?
The Need for Visibility
Right Information to the Right Person
1
Order Changes
2
Source Data
3
Non-Integrated
4
Related Docs
5
Understand
Provide all related documents
together
• The full picture of the business
transaction
• Eliminates follow up research
for missing information
• Identifies documents that may
not be in the ERP
• Empowers stakeholders with
the information they need
The Need for Visibility
Right Information to the Right Person
1
Order Changes
2
Source Data
3
Non-Integrated
4
Related Docs
5
Understand
Display EDI data in a way that can
be understood
• EDI syntax was designed for
computers
• Your accountants are real
people
• Avoid needing to train business
stakeholder on how to read EDI
Manage Your B2B Exchange
 Avoid new issues when business practices change
 Avoid errors before they happen (late or missing)
 Manage trends in operating performance
 Implement processes to improve performance
Value of Broader Engagement
Visibility
To measure and
manage your B2B exchange
Critical Insights
Into the health of your
most important business relationships
Proactively
Address Issues
Before they snowball
into more costly issues with
Actionable
Intelligence
Improve your customers’ experience
and by extension improve your brand
Why to Consider Level 5
• Even with visibility, customer issues persist
• Chargebacks remain a “cost of doing
business”
• Difficulties persist in realizing the supply
chain efficiencies through EDI automation
Improve relationships through improved collaboration
LEVEL 5: COLLABORATE
Internal Collaboration
Sales
Fulfillment
Customer
Service
Connect the Dots
Accounting
External Collaboration
Customers
3PL
Warehouse
Suppliers
Fulfillment
Sales
Customer
Service
Accounting
Change the Conversation
Engaging our Trading Partners
• Get on the same page
• See the same information
• Build the relationships
• Improve issue resolution
• Enhance the supply chain
• Reduce costs and improve
customer relationships
CONSIDERATIONS
Self Assessment Against the
EDI Enablement Framework
•
1
Comply
2
Automate
•
Are there customers or suppliers you are still managing over email or
fax?
Do you have opportunities to digitize these exchanges?
•
•
Do you have opportunities to automate more trading partners?
Customers, suppliers, import orders or even 3PL/warehouses?
•
Are you incorporating business rules in your automated data
integration?
Do you experience the issues with bad data in and out of your B2B
exchange?
3
Optimize
•
4
Manage
•
•
What kind of visibility do your business teams have of their EDI data?
Do you understand the trends in your B2B exchange?
•
How are you empowering your business stakeholders to collaborate
with your customers?
How do your business stakeholders share information with your
customers?
5
Collaborate
•
Thank You
Michael Hurley
Director of Product Management
1.877.334.1334
[email protected]
1edisource.com