Integrating EDI, Emerging Technologies and Value-Added Networks to Streamline Trading Partner Relationships
Small and mid-sized organizations often get caught in a tough squeeze between large trading partners in the global supply chain.
Major companies present smaller trading partners with conflicting technical requirements for machine-to-machine transaction processing, dampening the ability for value-chains to fully digitize B2B commerce value-chains.
As the imperative rises to improve visibility and accountability across local, regional, and global supply chains, new technologies, advanced application program interfaces (APIs) and managed services are emerging to address the challenge.
When it comes to keeping the global supply chain running, small and mid-sized organizations often get caught in a tough squeeze between large trading partners on both the buy-and-sell side of the equation. It is not unusual for large trading hubs (large multinational corporations) to adopt varying practices and technologies that result in unique requirements, adding costs and complexity to the business-to-business (B2B) e-commerce process.
It is a challenge that has frustrated mid-level organizations for decades, according to Angel Acevedo, vice president of digital messaging for mid-market, and Naomi Skinner, senior manager of product marketing with OpenText, in a podcast interview with BizTechReports.
“Major companies present their smaller trading partners with complex and often conflicting technical requirements for machine-to-machine transaction processing. This dynamic can dampen the ability for value-chains to fully digitize B2B commerce value-chains,” says Acevedo.
As the imperative rises to improve visibility and accountability -- across local, regional, and global supply chains -- new technologies, advanced application program interfaces (APIs), and managed services are emerging to address the challenge.
Naomi Skinner, OpenText
At the center of the action is electronic data interchange (EDI), the machine-to-machine transaction processing technology that has been around for decades. EDI is theoretically supposed to leverage industry standards and protocols for commercial documents (like invoices, purchase orders and advanced shipping notices) to process routine transactions without human interference.
The reality, however, turns out to be a bit messier.
Despite decades of debate and discussion, the global supply chain remains plagued by transparency challenges as organizations with different levels of technological maturity struggle with the great variety of EDI formats applied inconsistently across different tiers of the ecosystem. This opacity has been a particularly hard pill to swallow in today’s hyper volatile trading environment.
Between pandemics, constantly shifting geopolitical developments -- and operational interruptions (such as ships getting stuck in trade chokepoints) -- there has never been more need to see what is going on in near real-time so that adjustments can be made to the flow of goods to meet B2B and B2C commercial demands.
Angel Acevedo, OpenText
“While EDI has been effective in streamlining the flow of digital information exchanges, in too many instances, manual exceptions are introduced that often violate the integrity of transaction processing through the value chain,” says Acevedo.
This has prevented many organizations from accessing a “single-version-of-the-truth” about transactions, creating confusion, adding costs, and straining relationships with trading partners.
“New technologies -- including innovative APIs, the application of blockchain, and internet-of-things (IoT) -- are supplementing EDI to bridge maturity gaps and introduce higher levels of transparency, accountability, and security, which could play a significant role in better integrating with partners up and down the stream,” explains OpenText’s Skinner.
For mid-sized organizations that do not have the resources to address the complexity associated with integrating these technologies, value-added networks (VANs) are playing an increasingly important role in executing and reconciling large volumes of transactions across supply chain tiers.
“In addition to clearing EDI transactions and cleansing data before it hits corporate boundaries, VANs are in a position to integrate and rationalize a wide range of data formats. This helps diverse communities of trading partners process transactions with minimal human intervention while offering access to accurate trading records. It also allows all players in the ecosystem -- including mid-sized companies -- to capture insights that enable effective data-driven decision-making,” says Acevedo.
In so doing, VANs can go a long way toward leveling the B2B e-commerce playing field.
For more information or to schedule a BTR podcast interview, please contact melissa@biztechreports.com.