With thirty plus years of EDI now behind us, there is both good and bad news on the state of EDI programs within most corporations.
The goods new: The majority of purchasing, measured in financial terms, has been automated with EDI.
The bad news: Only a minority of the total vendor ecosystem has been enabled, measured in terms of number of suppliers.
It has become clear that B2B system integrators have learned this little known fact years ago and have tailored their messages, focus, internal rewards, sales quotas and solutions in such a manner that they don’t care about the long tail. In an effort to maximize short term value creation, these B2B system integrators have focused on providing a solution that enables only the “fat cats” within the supply chain. As one might suspect, publicly traded companies are rewarded for revenue growth and there isn’t a lot of value in enabling hundreds of suppliers that only trade one or two transactions per month. B2B system integrators that are publicly traded have been the first to abandon the focus on assisting with the long tail within the supply chain.
As a result, historical offerings that helped enable thousands of small trading partners have been whittled down. Most of the publicly traded B2B integrators no longer have adapters for the most common small ERP systems, such as Quickbooks, Microsoft GP, Microsoft NAV, Microsoft AX, SAP ByDesign, SAP All-in-One, and SAP Business One. In addition, they lack a service bureau that will convert paper to EDI. Even the EDI web portals offered by the biggest B2B integrators have become dated and inefficient for small users. In fact, the usability and scalability architecture at most of the large EDI providers prohibits adoption, as the EDI web portals often require the user to have a different login ID for each trading partner. This is the equivalent of asking someone to have a different e-mail address for each person they want to converse with via e-mail.
While most mature EDI initiatives are relatively happy with their historical success, it leaves the organization with a bifurcated procurement process. Over time, this bifurcated process creates problems and limits the organization’s ability to leverage the investment they have made in B2B integration.
Solving this problem often requires partnering with a solution provider that focuses extensively on enabling the long tail, and finding them can be difficult given their niche focus. The ability for a niche vendor to get their message heard is limited given that analyst firms such as Gartner, Forrester, and IDC do not typically write about such companies, and advertising budgets from these companies often are insufficient to reach the mainstream.
If you think that your current B2B integration partner can assist with solving the long tail, do a bit of due diligence and ask some questions:
How many desktop ERP systems do they have native “plug-in” adapters for? Ask for a list. Ask for a demo, brochures and a list of certifications that confirms such adapters exist. Don’t be fooled by B2B integrators who try to plug this gap with partnerships.
Do you offer a service bureau with the ability to take inbound paper and convert it to EDI? Ask whether the service bureau can handle bi-directional traffic (EDI converted to paper, fax or email). Ask whether the service is native or via a partnership. Ask how many users they have on their service bureau.
Ask for a demo of the web EDI portal. Ask whether the end user can scale and add additional trading partners using the same ID. Ask whether the trading partner can pay for the service as opposed to being held hostage on a private web portal.
Ask for recent client references that have enabled a large population of very small vendors using both plug-in adapters and service bureau offerings.
Chances are that if you are using a large or publicly traded B2B integration provider, you are going to need to find a partner that can help you with the long tail.
-Daniel Ford, DiCentral