Time to Modernize B2B Technology

By Courtney Macavinta

When it comes to communicating with business partners or fulfilling customers’ orders, many enterprises are still employing electronic data interchange (EDI) technology as the underpinnings of their business-to-business operations. However, many EDI systems are now more than two decades old.

While EDI systems can still provide value, according to a new report by Forrester Research, enterprise architects are increasingly discovering the need to spearhead B2B modernization so they can support not only EDI, but business process management (BPM) and service-oriented architecture (SOA) as well. When enterprises can’t take advantage of the latest BPM and SOA tools, Forrester concludes, they could end up suffering from “B2B detachment symptoms,” such as being unable to quickly add new external partners to their systems, add new transactions support collaboration with partners, or even retain qualified support staff.

“There is no downside to EDI per se,” says Ken Vollmer, principal analyst for Forrester and author of the December report, B2B Integration Trends: B2B Modernization. “It's just that when EDI technology is available as a component of a comprehensive integration solution, it is much easier for enterprises to maximize the effectiveness of their B2B programs.”

Here are issues CIOs can consider to lead the way toward smart modernization for their B2B systems:

• Enhancement of EDI Analysts agree that modernizing is not about ripping and replacing EDI technology. The key is to enhance the enterprise’s overall B2B program. “EDI is really just for communicating order information. If you want to communicate anything else, like design or marketing information and [schematics] or high-level forecasting, EDI is really not set up for that,” says Ian Finley, research director for AMR Research Inc. “It's about augmenting the way EDI works.”
  
  Vollmer agrees, “You modernize your EDI by ensuring that you can obtain this functionality as part of a comprehensive integration offering. You don't need to replace your EDI technology, just update it to use SOA and BPM features.”

• Benefits of modernizing By enhancing B2B systems to include SOA and BPM, an enterprise can have a common tool for addressing all its needs. “This will make it easier to support and maintain the integration infrastructure,” Vollmer says. Gaining the benefits of SOA gives an enterprise the ability to reuse services, add functionality faster, and deploy Web-based services. Utilizing BPM solutions, on the other hand, helps improve processes, such as, for example, the supply chain. With modernization, enterprises can “provide an effective way of incorporating B2B activities into process-improvement efforts,” Vollmer adds.

• Current vendors Though enterprises might require more than one B2B solution, Forrester recommends exploring whether an enterprise’s current vendor can do the job to make migration easier. Also, Finley says this might be the only -- and smartest -- option for most enterprises. “Right now, selling your organization on a whole new B2B system is going to be hard unless you can show a significant cost-saving. If you're proposing a project that doesn't have a hard-line cost benefit, it's going to get put on the back burner.”

• Outsourcing Both Finley and Vollmer say that, in many cases, an organization will have to decide whether to outsource support for its B2B systems. For example, if an enterprise doesn’t have the internal expertise, it might make sense to outsource all or part of its B2B operations in order to keep up with partner demands and also grow the business. “Most companies get help after they've failed,” Finley says. Instead, CIOs might be wise to consider a partnership with a vendor or to use a consulting firm to help from the outset.

Ultimately, the convergence of EDI, SOA, and BPM will make enterprises more nimble and effective. Still, Finley says, even more important than kick-starting this convergence is for CIOs to take a holistic view of how they are sharing information with partners, the organization’s overall business processes, and where they need to improve. 

“The business process has to change first, and then the technology can support it,” Finley concludes.

Courtney Macavinta is a Silicon Valley-based business and technology writer. Her articles have appeared on Web sites including CNET News and Inc, as well as print publications such as Business 2.0, Red Herring, Wired News and The Washington Post. She is also the managing editor of the online program called The Online Family.