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Front coverDeveloping a long-term EDI strategy with IBM B2B Cloud ServicesRedguidesfor Business LeadersMatt BuceyUnderstand how IBM B2B Cloud Services can help yougrow your businessLearn how to improve B2B collaboration using theCloudAccelerate electronic B2B collaboration with customersand suppliers to achieve a competitive advantage
Executive overviewElectronic data interchange (EDI) was the standard for exchanging business transactions,purchase orders, invoices, shipping notices, and electronic funds transfers for over 25 years.In the last 10 years, EDI evolved with newer technology, especially with the ubiquity of theInternet. Because of these technological advancements, EDI is nearly as easy to use asemail and is no longer an option for doing business. Instead, EDI is a business requirement.One of the major concerns of IT and business decision makers responsible for managingsupply chains and the activities of their trading partners is how to enable more effectivecollaboration with business partners that have individual regulatory requirements. The varyingdegrees of technical expertise, communications protocols, data standards, and informationsystems of those business partners also are of concern.Adding to this complexity is the short supply of EDI or business-to-business (B2B) processexpertise and the technologies required to achieve successful B2B collaboration. Thisshortage is even more difficult to overcome as most businesses search for administrativesavings and vital performance improvements. Businesses also are trying to keep pace withthe growing demand for accommodating new global partners, automating more interactions,and managing older EDI systems. Adding to this difficulty is the growing number of datatypes, standards, and protocols.Organizations need a secure, agile, flexible, and global B2B integration platform to respond tothese challenges. When combined with real-time business process visibility to achieve thehighest level of B2B collaboration, the EDI platform can accommodate resource limitationswith a skilled, experienced staff to offload the responsibilities from your own IT personnel.These responsibilities include bringing on new partners to managing your entire EDI and B2Boperations. IBM B2B Cloud Services delivers the technology, expertise, and range of Cloudsolutions to address your global B2B needs.This IBM Redguide publication is for IT and business decision makers to help themunderstand how IBM B2B Cloud Services can meet their global B2B needs. Copyright IBM Corp. 2012. All rights reserved.1
Business challengesFor organizations that seek to drive growth in an increasingly competitive global marketplace,the ability to trade electronically is key. Electronic trading facilitates B2B collaboration.Electronic trading also provides real-time, end-to-end visibility and control over the businessprocesses that organizations share with their customers, suppliers, banks, and tradingpartners.EDI in the beginningEDI was created in the 1960s and is a widely used technology for the automated exchange ofdocuments between dissimilar applications. Value chain partners use EDI to exchangepurchase orders, invoices, advance ship notices, and other business documents directly fromone business system to the other, without human intervention.But EDI is more than a technology. The term also refers to the implementation and operationof systems and processes for creating, transmitting, and receiving EDI documents.In this expanded context, the essential elements required to implement electronic datainterchange can be systems and processes used for creating, transmitting, and receiving EDIdata by using standards such as UN/EDIFACT, ANSI ASC X12, TRADACOMS, and ODETTE.These information sources also include non-EDI data such as XML, spreadsheets, and othertext-based documents.The essential systems and processes used for creating, transmitting, and receiving EDI datainclude an electronic communication medium to send and receive the data in a timelymanner. These systems and processes include the following types of electroniccommunication: Managed file transfer to facilitate point-to-point connections with trading partners Value Added Network (VAN) to facilitate one-to-many connections with trading partnersEDI was used because the cost of handling a paper document was more than 10 times thecost of handling an EDI document. When companies began running on central enterpriseresource planning (ERP) systems, the order-to-cash process was automated. Thisautomation further drove down costs and gave an incentive to move all high-volume suppliersto trade by way of EDI.Helping EDI become the normAs organizations started to realize the benefits of automating by using EDI, many of the largerhubs in the supply chain implemented initiatives to automate their trading community. Forexample, many buying organizations realized that their smaller and lower-volume suppliers(who are a critical part of the business) cost more to do business with because thosesuppliers were still processing paper. Many studies done on the cost of paper transactionsshowed that the transactions cost from USD5 - USD50 per transaction. The cost of an EDItransaction often is less than USD0.65 per transaction.The global recession that started in 2008 still drives many IT and business decisions andplaces intense focus on continual improvement to the bottom line. Supply chain disruptionsare an expensive component of operating costs. Most organizations are operating with alimited staff that must effectively manage thousands of trading relationships and millions oftransactions. Any manual intervention into these automated processes causes inefficienciesthat can escalate costs.2Developing a long-term EDI strategy with IBM B2B Cloud Services
The options for electronic communication expanded beyond the VAN and managed filetransfer to include the following possibilities: EDI outsourcing: EDI outsourcing is the provision of software and services by an externalcompany for the implementation and operation of systems and processes. These systemsand processes are responsible for creating, transmitting, and receiving EDI documents.The VAN is the core of the earliest forms of EDI outsourcing. EDI transformation: EDI transformation software facilitates data exchange standards andenables the messages transmitted and received to be translated, mapped, interpreted,and checked for compliance. This process evolved to become B2B gateways. Thesegateways are software that provides the transformation, process integration, andpoint-to-point file transfer capabilities that incorporate Internet protocols.Moving beyond basic EDIOne of the major concerns of IT and business decision makers is how to enable moreeffective collaboration with business partners around the world. Adding to the collaborationissues are the individual regulatory requirements, varying degrees of technical expertise,communications protocols, data standards, and back-office information systems used bypartners. EDI is one of the most effective technologies for creating transaction efficienciesamong business partners. However, the global business landscape shifted and other tools arenow necessary.The limitation of EDI technology to support more complex relationships is becoming a barrierto growth for many companies. As companies are forced by marketplace factors to becomeglobally integrated enterprises, they increasingly need to expand their business with morepartners. Supply chains and trading partner relationships are no longer linear. Theserelationships are a complex network that requires much more coordination. For example, atypical manufacturing company relies on more than 35 contract manufacturers around theworld to provide the necessary parts for its goods. For some companies, such as automobileand airplane manufacturers, the number of manufacturers can range in the tens of thousands.As a result of these trade changes, the number of standards grew to the extent that the termstandards in this context can be an oxymoron.EDI technology designed for transaction efficiency and standardization imposed limitations onnew trading relationships. Diverse customer requirements and mandates led to disparatesystems with multiple environments to support and maintain. Limited flexibility also limited thenumber of enabled trading partners.EDI systems are the norm for the exchange of standard business electronic documents inmany sectors. It is unlikely that EDI disappears from most of the companies that rely on it, butnewer alternatives beyond EDI have advantages. Companies that use EDI are considering(and use) these alternatives.Supporting B2B collaborationAs the global trading environment grows more complex, the need for EDI technologiesbecomes the need for B2B collaboration capabilities that can enhance partner integration,process automation, and comprehensive visibility. Companies realize the importance of B2Bintegration to their business.B2B integration also evolved as the focus moved away from the provision of pure EDI to B2Bintegration that supports supply chain and trading partner activities. This move to B2Bintegration enabled more effective collaboration with business partners.3
The VAN also evolved to meet the needs of its customers. This evolution is seen in thefollowing integration paradigms: Integration as a Service (IaaS)B2B collaboration networkIntegration on demandBusiness process networkB2B integration CloudIntegration Platform as a Service (iPaaS)How transport and deployment options changed to further enable B2B integration is anexample of iPaaS.Addressing future challengesAs companies develop long-term EDI strategies to scale up to large B2B and EDI projectswith many customers and partners, they must address the following requirements: How to handle the challenges to service global growth markets based on the diversity ofsuppliers, the effect of trade regulation and finances, and the complexity of supply chaindelivery. Companies need to respond to all customers and manage all partnerscost-effectively. How to integrate on-premise systems with those systems used from the Cloud. How to integrate with business partners who also use systems and applications in theCloud.Business decision makers responsible for the success of B2B integration found that B2Bprocess experts and technologies are in short supply. Businesses in search of administrativesavings and vital performance improvements also face the difficulties of obtaining theresources needed to address these new requirements. Businesses also must address thechallenge of managing older EDI systems complete with the growing numbers of data types,standards, and protocols. As a result, these critical collaboration projects often arepostponed. Delays and complexity further increase the total cost of ownership (TCO) for B2Bcollaboration.Business valueCompanies that want to develop a long-term, global EDI strategy to encourage growth andincrease efficiency are adopting B2B collaboration strategies that use the Cloud. The goal ofthese strategies is to reduce cost and increase profitability through real-time, comprehensivevisibility and control over the business processes they share with customers, suppliers,banks, and other outside partners.Designed to alleviate the burden on internal resources, IBM B2B Cloud Services can takeresponsibility for part of or virtually all B2B and EDI electronic commerce infrastructure andprocesses. By taking this responsibility, IBM B2B Cloud Services enable clients to achieve thefollowing results: Reduce the TCO of B2B and EDI operations and use internal resources where they areneeded most. Increase profitability by increasing the reliability of B2B operations. Accelerate B2B collaboration with customers, partners, and suppliers to achieve acompetitive advantage.4Developing a long-term EDI strategy with IBM B2B Cloud Services
Reducing TCO and using internal resourcesIBM provides the following resources to manage your B2B integration technology so you canrapidly grow and adapt your B2B community: Integrating business partner transactions with back-end applications by using IBM expertsand a service-oriented architecture (SOA)-based platform Offering flexible delivery options, in which you can take as much or as little responsibilityas needed so you can transfer ownership as needed Offering security-enhanced communication with any partner around the world,independently of protocols or gateway Improving the agility and control of your supply chain with real-time business processintelligenceIncreasing profitability and driving competitive differentiationIBM helps drive increased reliability and competitive differentiation through the following B2Band EDI reliability benefits: Reducing order, price, and invoice errors by using our expertise to manage your documentdelivery process Providing skilled consultants to enhance your e-commerce strategy Achieving cost efficiencies with our world-class support 24 hours a day, every day of theweek and “dial tone” reliable infrastructure Making it easier for customers and partners to do business with youAccelerating B2B collaboration to achieve a competitive advantageIBM helps accelerate B2B collaboration through the following benefits: Improve supplier compliance by using our experts to monitor and manage yourcommunity. Provide document expertise that reduces order, price, and invoice errors, and managesyour document delivery process times. Decrease time to market for new products and services with our B2B expertise.Teaming with IBM sends a strong message to your customers that they can rely on theintegrity of the data you send them. The partnership with IBM also shows that you can keeppace with changes and upgrades. With IBM expertise on your side, you can better earn clientloyalty as you profit internally through more agility, control, and visibility into shared businessprocesses.5
Solution overviewIBM B2B Cloud Services securely connect and rapidly build your partner communities byusing B2B Cloud solutions. IBM B2B Cloud Services solutions range from on demand to fullymanaged solutions and provide you with the flexibility to quickly adapt as the needs of yourbusiness change. You can take advantage of and benefit from the fast implementations andlower start-up costs to help you optimize your business community with the following coresolutions: IBM Sterling B2B Collaboration Network IBM Sterling B2B Integration ServicesIBM Sterling B2B Collaboration NetworkIBM Sterling B2B Collaboration Network is a foundational component of IBM B2B CloudServices. Sterling B2B Collaboration Network is the IBM B2B Integration on Cloud platform,which differs from traditional VANs. A VAN delivers information from one point to another. B2BIntegration on Cloud gives you visibility into that information in real time. Your view of that datacan be linked within a business context to monitor whole processes (such as order-to-cash)instead of only individual transactions.Built on a security-rich and flexible SOA, Sterling B2B Collaboration Network processes morethan five million transactions daily. This high volume gives you visibility into transactioncontent as the business data is processed through the network. The data can come fromalmost any system inside or outside your organization. With Sterling B2B CollaborationNetwork, you can help support almost any data type, format, or communication protocol.This comprehensive process visibility helps you improve strategic decision making withaccurate, real-time data, even as you enhance the experience of customers throughcorporate-wide, real-time views into order status. You also can analyze trading partnerperformance through the key metrics of Sterling B2B Collaboration Network.Exchange servicesYou can move almost all of your information with the following exchange services: Comprehensive protocol support that includes async and Odette File Transfer Protocol(OFTP). Through most Internet protocols:–––––––––IBM Sterling Connect:Direct Transmission Control Protocol/Internet Protocol (TCP/IP)File Transfer Protocol (FTP)File Transfer Protocol/Pretty Good Privacy (FTP/PGP)Simple Mail Transfer Protocol (SMTP)X.400Hypertext Transfer Protocol Secure (HTTPS)WebSphere MQEDIINT protocols AS1 and AS2 Support for multiple data types such as XML, CSV, iDoc, and many flat file formats andEDI standards. Support for 100 public and private networks worldwide.6Developing a long-term EDI strategy with IBM B2B Cloud Services
Infrastructure servicesIBM Sterling B2B Collaboration Network offers the following reliability benefits: Extensive disaster recovery planning and testing. Highly available network operations (99.95% uptime). Advanced data protection and integrity through comprehensive security capabilities. Semiannual audits, comprehensive physical security capabilities, firewalls, andencryption. Global multilingual customer support service centers that are always available.IBM Sterling B2B Integration ServicesIBM Sterling B2B Integration Services combines the IBM Sterling B2B Integration softwareproducts, VAN, and related trading community development and business process visibilityservices with B2B process management and trading partner support services to create B2Band EDI managed services solutions.Building on the B2B integration and process visibility capabilities of the IBM Sterling B2BCollaboration Network, IBM Sterling B2B Integration Services reduces the burden on internalresources, as shown in Figure 1. The Integration Services also minimize your costs andaccelerate your ability to achieve B2B collaboration through the addition of B2B processmanagement and trading partner support.YourCompanyB2B Integration Global B2B Network Business Continuity andSecurity Services Business focused SLAs Mapping and TranslationServices Supplier Portal,Managed AS2, Fax toEDI Partner On-boardingServicesYourBusiness CommunityProcess Visibility Data and BusinessProcess VisibilityB2B Process Mgmt Transition Services Document ProcessManagement Integration Services Enhanced/customizedSupport Program ManagementCommunity Support Trading Partner HelpDesk Trading PartnerIntegration ServicesFigure 1 Service offerings built on Cloud technologies enable acceleration of ROI for B2B projects7
IBM achieves economies of scale within our B2B integration on the Cloud environment byusing efficient provisioning, B2B process management, and support and reporting tools. IBMalso uses our own infrastructure, software, and network services. This environment providesa higher level of business benefit at a lower TCO than is available from a solution managedin-house. This lower-cost dynamic also features detailed monthly reports so you know theexact TCO of your B2B operations.IBM Sterling B2B Integration Services consists of the following levels of service: IBM Sterling B2B Integration Services Basic IBM Sterling B2B Integration Services PlusIBM Sterling B2B Integration Services BasicIBM Sterling B2B Integration Services Basic takes responsibility for and provides on-demandaccess to the B2B Integration on Cloud infrastructure, business process visibility tools, andcommunity development resources. You and your trading partners are transitioned onto theB2B Integration on Cloud platform. You are provided with ongoing management of the B2Binfrastructure, which includes the following services: Transition services: The project coordination to support your transition to the B2Bintegration on Cloud platform. Infrastructure and communications management: The people skills, technology, andresources to monitor, maintain, and operate your B2B environment 24 hours a day, everyday of the week. Support services: The geographical coverage, language support, availability, and level ofexpertise to meet your support needs. Visibility services: The reporting, alerting, and real-time view into your business processesand associated transaction data. Community services: Access to the community development people skills, tools, andprocesses developed and managed by IBM, to reach the goal of 100% electronic tradingthrough the following metrics:––––––Trading partner conversion programsTrading partner consolidation programsTrading partner recruitment programsWeb formsFax conversion servicesManaged AS2 Translation and mapping services: Seamlessly integrate business partner transactionswith your back-end applications. Support is available for any data type or format with thefollowing data translation and custom mapping services:–––––Map developmentMap maintenanceMap supportMapping Report Specifications (MRS) testingMRS maintenanceDesigned to accelerate your ability to achieve B2B collaboration, with Sterling B2B IntegrationServices Basic you can use your internal resources where they are needed most. Thisflexibility helps you to rapidly grow and adapt your B2B community.8Developing a long-term EDI strategy with IBM B2B Cloud Services
IBM Sterling B2B Integration Services PlusIBM Sterling B2B Integration Services Plus builds on the capabilities of Sterling B2BIntegration Services Basic with B2B and EDI process management.Sterling B2B Integration Services Plus provides additional transition services, documentprocess management, premium support, integration services, and optional trading partnersupport. These services result in cost savings because of full-time, world-class support and a“dial tone” reliable infrastructure. The services also reduce order, price, and invoice errorsthrough the use of IBM expertise in managing your document delivery process. With SterlingB2B Integration Services Plus, skilled consultants are always available to optimize youre-commerce strategy and help make your business more successful.Table 1 provides a detailed description of the additional services available in the Sterling B2BIntegration Services Plus offering.Table 1 Additional offerings available in Sterling B2B Integration Services PlusServices offeringDescriptionTransition servicesThe following services are available to transition customers of the service: Project management: Dedicated project manager to manage your transition to the B2Bintegration services platform. Architectural design: Develop the architectural plan that includes requirements for processand infrastructure. Integration testing: Testing process to verify that the customer and itstrading partners arereceiving data to their back-office systems from the B2B integration services platform. Optional services: Customize the service to meet your business needs.Integration servicesThe following Integration services are available after your service is active: Map integration testing: Ensures maps created for you and your trading partners arefunctioning correctly. E-commerce strategy services: Consultation to develop your B2B integration service insupport of your business requirements for the next 1 - 3 years. Optional services: Includes integration testing, training, architectural design, process design,and application consulting from skilled and experienced B2B resources to develop andcustomize your service.Premium supportThis level of support offers a higher degree of proactive support through the following services: Dedicated phone number for handling calls with personnel available for extended hours. Calls handled by senior customer support representatives. Faster escalation of any items not handled in Level 1 support. Support access to all customer employees. Named customer service representatives. Configurable automated alerts.Document processmanagementIBM manages the document send and receive process and works with your staff to resolve anyissues.Program andServicemanagementThe role of the Program and Service manager goes beyond the services provided by support.The role also is designed to develop a partner-based relationship with the customer to align theservice to facilitate the following strategic growth objectives: Single point of contact for business and strategic issues. Project and resource oversight for projects during the operations phase. Identify, evaluate, and prioritize B2B opportunities. Regular business reporting and scheduled on-site meetings with the customer executives. Annual reassessment of the B2B business plan.9
Services offeringDescriptionTrading partnersupportAn optional service that provides experts that assist in resolving document processing and otherB2B integration issues with your trading partner community. This service is available regardlessof time zones, geographical location, and spoken languages and includes the following support: Functional acknowledgement monitoring and tracking at the trading partner level. Trading partner direct dial access to assigned IBM customer service representatives whocan answer calls as your company. Level 1 telephone, web, and email support for each registered trading partner that includes:communications, mapping, document processing, problem diagnosis and resolution, datatracking, document testing, and system setup and maintenance.Supplier portaldevelopmentAn optional service providing a branded supplier portal for the customer. This service enablessuppliers to access information that includes B2B specifications for documents, protocolsrequired, and information about new initiatives.Real-time multi-enterprise processingIBM continues to build upon the IBM B2B integration on Cloud infrastructure by providingextended process integration end-to-end between the enterprise and business partners. Thisintegration is delivered from a single, virtualized platform with real-time, multi-enterpriseprocess services. These services are the next generation of integration-as-a-service orintegration brokerage capabilities. These capabilities expand the reach of B2B by allowingreal-time B2B document exchange and document enrichment. This service further expandsthe integration brokerage capabilities, which allow customers to connect to anyone,anywhere, at anytime.IBM Sterling Synchronous B2B Process ServiceIBM Sterling Synchronous B2B Process Service provides real-time website inquiry andresponse processing, and the synchronous exchange of supply chain documents.Companies can synchronously exchange messages with partners through the IBM B2BCloud Services environment regardless of differing web services interfaces.IBM Sterling Process Enrichment ServiceWithin a standard B2B document flow, IBM Sterling Process Enrichment Service can connectto an external data source to validate information within the business document. Additionalinformation also can be gathered and used to enrich the business document content.Figure 2 on page 11 shows the B2B integration on Cloud architecture.10Developing a long-term EDI strategy with IBM B2B Cloud Services
Application ServicesData Web FormsCustomer CenterFax Conversion ServicesDocument TrackingManaged AS2 GatewayReport VisibilityCommunity DevelopmentServicesAlertsSupply Chain gServicesMappingSynchronous B2BProcess ServiceIn-Network TransformationProcess EnrichmentServiceBusinessServicesExchange Data aster RecoverySecurityCustomer SupportTechnology InfrastructureFigure 2 B2B integration on Cloud architectureThe VAN evolved into a B2B integration Cloud featuring the core components of communityservices, visibility services, transformation services, and real-time processing services. AB2B integration Cloud is the core technology behind B2B integration services. The Cloudincludes the electronic communication medium to send and receive the data in a timelymanner. The Cloud also includes the B2B integration gateway software. This softwareenables process orchestration of the messages transmitted and received to be translated,interpreted, and checked for compliance. Instead of a dedicated or large shared instance ofspecific software, all of these services are now in the Cloud, via a multi-tenancy environment,built on a SOA platform.B2B Integration Cloud evolved from technology-based EDI outsourcing to include B2Bintegration, process visibility, B2B process management, and community support. Thesefunctions enable an organization to have a single connection to the B2B integration Cloud anduse the economies of scale available to a B2B integration services provider.SummaryThe ability of a company to respond to the demands and needs of its trading partners(customers and suppliers) increases the burden for B2B integration expertise across timezones, languages, and technologies or standards. Failure to meet these needs or demandscan affect customer satisfaction, increase the time required to move new products andservices to the marketplace, and increase the cost of doing business. Companies expect theirpartners to provide a service that meets these evolving challenges.Expect B2B collaboration requirements to continue to grow and change. As Cloud adoptioncontinues to evolve, companies face new integration challenges: integrate on-premise11
systems with those systems used from the Cloud, and implement B2B integration with tradingpartners that also use systems in the Cloud.Integration brokerage is the answer. Companies expect B2B services providers with theexperience of using a Cloud-enabled B2B integration platform to be in the forefront. Ask yourcustomer representative to show you how IBM B2B Cloud Services are leading that evolutionwith complex integration brokerage capabilities.IBM B2B Cloud Services are part of the IBM SmartCloud Solutions portfolio, whichcombines capabilities that accelerate business process innovation and delivers businessanalysis. The portfolio also enables collaboration by creating and linking business
Developing a long-term EDI strategy with IBM B2B Cloud Services Matt Bucey Understand how IBM B2B Cloud Services can help you . EDI was created in the 1960s and is a widely used technology for the automated exchange of documents between dissimilar applications. . EDI transformation software facilit ates
