B2B Integration

Business To Business Integration

B2B Integration

By WebProBiz Solution Team |12 November 2016

B2B (Business to Business) means transaction between business entities. The transaction here means sales of good or products from one company to another. Hence, very often such transaction started from asking quotation from a business to various different suppliers, by providing suppliers purchase requisites, the business can determine if the suppliers able to supply up to certain specification. Then, suppliers will check if they able to fulfill their requirements. Once a specific supplier is confirmed, the business will send out PO (Purchase Order) as a legal binding document that the supplier must fulfilled the products stated specifically on the PO (Purchase Order), or the supplier will send out SO (Sales Order) to the business as a legal binding document that order has been confirmed.

Very often, such process will go up till payment receipt upon order fulfillment, hence such exchange of documents are normally done by using Email and fax. Upon sending those document, supplier needs to call up the business to check if they received their respective documents.

As general practice, normally companies who have implemented such solution especially in-house solution would need to have a pool of fund which are readily to be invested into such infrastructure. Depending the sophistication level of the company existing IT infrastructure. Usually it can be divided into 3 main categories as following:

History of B2B Integration

Until 1980s, EDI (Electronic Data Interchange) came out which revolutionized the industry by providing digital exchange of such documents between 2 entities. However, EDI required a translator to translate into different format to fit into different system and usually it costs some investment from the companies to build up such system. Most importantly, the roll out program between the suppliers and business carry certain risk during implementation as not all business or suppliers wanted to use EDI.

Such problem existed until the internet boom, which the popularity of E-Procurement site and E-Catalog started to spur. The objective of E-Procurement and E-Catalog is simple which it enabled customers to direct purchase from business thru an online portal and download product catalog.

Companies who have a dedicated IT team to manage their own IT system, ranged from support, customization, troubleshooting and some small scale development. Such companies usually required training by the vendor on how to customize so that they can do it hands-on. For such client, we will help them integrate their existing accounting system with our system, meaning to say that in terms of data entry will be automated to ease their recruits’ workload.

Why B2B integration

With B2B integration in the market, it helps businesses to fasten their sales process by cutting down the manual work. Results have proven that sending an electronic messages nowadays only takes minutes instead of days hence it cut down the whole process time from days to a few minutes. It reduces the business cycle time to provide competitive advantages for the business.

Besides, it reduces the needs of human intervention. No data entry is required for the system hence it cuts down the risk of making potential error in data entry. In terms of cost reduction, there is a substantial cost saving as the result of reducing errors rate, such saving comes from the lesser manual work in searching error. It saves up company resources. On top of that, human handling for sorting documents, circulation and data entry can be eliminated also. As well as the cost for paper, envelops, courier service to support transmission of documents, and also the storage space for paper able to be reduced.

Last but not least, B2B integration able to improve trading partner relationship as B2B integration reduce the needs of data entry hence faster delivery of the products as well as lower the expenses of returned shipment of incorrect products. Thru this way, it able to foster better clients relationship. One of the biggest business advantage of such B2B integration is its ability to improve business cash flow. Reason being, it allows managers to plan out cash flow more precisely by receiving payment sooner or making payment sooner (taking advantages of net discounts).

However as we progress and move on to a more dynamic marketplace will such B2B integration be suitable for this era anymore?

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