Flat is the new black

Although it seems hard to believe at the moment, the global economy should be on an upturn sooner rather than later.

There have been many blips in the nation’s financial stability over the last 100 years, not least two World Wars and the great depression of the 1930s. However, the economy has always bounced back and this recession should be no exception: in fact, the global economy is predicted to double in the next twenty years.

At present, it appears that CIOs are spending their time struggling to cut costs and only implementing projects that are guaranteed to provide a rapid financial return. But it is vital that they also consider what lies around the corner by preparing the company for the predicted upturn.

As business processes fall under greater scrutiny during cost-cutting drives, more companies are becoming acutely aware of the importance of improving business-to-business (B2B) efficiencies throughout the supply chain.

Not only will this enable them to achieve ‘flat growth’ in the current economic climate, but it will also ensure they are best placed to scale and grow when the expected upturn arrives.

The challenge is increasing these efficiencies when the board insists on rapid ROI and smaller budgets.

A change in priorities: from inside to outside the enterprise

At the end of the last century, efficient business integration was focused on activity within the enterprise and ensuring the different applications within the business could talk to each other.

But as companies have entered a global economy and are now battling their way through the recession, it has become obvious that if they want to stand any chance of remaining efficient and competitive, they need to be able to integrate beyond the four walls of their organisation and achieve full B2B integration.

The global economy has meant that the supply chain has lengthened; businesses are now sprawled across different time zones and languages; acquisitions and mergers are occurring more frequently; and communication between all these different areas of the business has become more challenging.

During the recent period of growth up to 2008, most companies responded with tactical point solutions that created “islands of integration” and added headcount to fill in the integration gaps.

Businesses can no longer survive by relying on these “islands of integration” that cannot talk to each other. Processes throughout the supply chain must now be fully integrated both inside and outside the enterprise across the in order to create a fully efficient and profitable business.

B2B integration hurdles

Sterling Commerce recently carried out a survey, amongst 300 senior IT managers across France, Germany and the UK, to find out the current challenges that businesses face when trying to integrate different sections of the business.

Four out of five companies said that they experienced problems with their current B2B capabilities mainly due to the use of legacy technology which made it difficult to integrate their trading partner data with their back end applications.

The fact is that many companies not only rely on old technology, but also on manual processes. There are still companies sending faxes and manually enter orders on to a system. One small human error, or a fax that doesn’t get through, can lead to delays in information entering the supply chain, as well as errors all along the supply chain.

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