maximising your return on erp & b2b integration · maximising your return on erp & b2b...

Maximising Your Return on ERP & B2B IntegrationMark Morley, Industry Marketing Director

| © 2011 GXS, Inc.

Today’s Agenda

• Introduction

• AMR Research ERP Study

• How Cloud & B2B Outsourcing help ERP/B2B Integration Projects

– Introduction to cloud based infrastructures

– B2B Outsourcing, a GXS perspective

– Implementing an ‘ERP Firewall’

• Real World Case Studies

• Questions

| © 2011 GXS, Inc.

Introduction

• Managing the integration of ERP and B2B

systems is complex

• ERP and B2B projects are implemented

across internal and external users

• Integrated ERP and B2B systems

introduce significant operational

efficiencies

• ERP B2B integration provides improved

visibility into cross enterprise business

processes

| © 2011 GXS, Inc.

ERP Systems Need to Support Global Operations

Companies must manage a global network of manufacturing, sales, marketing, engineering and finance centres

Manufacturing

Back Office

Sales

GlobalHQ

RegionalMarketing &

Finance

EngineeringR&D

Manufacturing

Sales

Sales

Manufacturing

RegionalMarketing &

Finance

Back Office

Manufacturing

Sales

EngineeringR&D

EngineeringR&D

| © 2011 GXS, Inc.

AMR Research ERP Study

| © 2011 GXS, Inc.

Third Party Research Institutions Validate the Value of B2B Outsourcing

| © 2011 GXS, Inc.

The Need for ERP to B2B Integration

• There are a number of key drivers for integrating ERP and B2B systems

– Significant amounts of ERP data is sourced from outside a company

– Poor data quality can compromise the value on an ERP implementation

– Poor B2B integration limits visibility into key business processes

– High availability of external B2B communications is critical

| © 2011 GXS, Inc.

Key Findings

• 48 percent of respondents said they had lost B2B connectivity

• 34 percent of respondents said B2B integration staff were supporting ERP related projects

• 34 percent of the data feeding ERP systems is generated externally

• 29 percent of respondents said that they had to prematurely terminate B2B testing programs relating to external trading partners

• 79 percent of respondents have exceptions or problems on more than one percent of inbound B2B transactions

• 80 percent of respondents plan to move to highly consolidated ERP environments

| © 2011 GXS, Inc.

Companies Undertake Many Different Types of ERP Related Projects

Retire Legacy Mainframes

Rapid Company Growth

New Installations

Consolidations

Upgrades Extensions

Merger & Acquisitions

Shared Services for Back Office

Vendor End of Life Support

Expanded Feature Set

Supply Chain Planning

Treasury or Bank Relationship Management

| © 2011 GXS, Inc.

ERP Deployment

44%

24%

22%

10%

2 to 4 regional systems

Single global instance

Multiple instances across business

units and subsidiaries

One global instance per line of

business

28%

38%

20%

14%

Today In 3 Years

Q. Which of the following best describes your current ERP deployment?Q. Which of the following best describes what your ERP deployment will look like in 3 years?

N =121 Respondents

| © 2011 GXS, Inc.

Percent of B2B Staff Supporting ERP Related ProjectsQ. On average, what percentage of your B2B integration staff is supporting initiatives or projects related to ERP?

3%

15%

30%

19%

15%

19%

1% to 9%

10% to 20%

21% to 30%

31% to 40%

41% to 50%

Greater than 50%

Average % of B2B integration staff supporting ERP projects:

34%

N =121 Respondents

| © 2011 GXS, Inc.

• ERP uses information from various

external sources - eg customers,

logistics providers, financial

service institutions

• Information derived from different

global standards is difficult to

manage

• Integrating trading partners to

remote offices & plants is complex

Externally Sourced ERP Data

| © 2011 GXS, Inc.

ERP Data Originates Outside the EnterpriseBut is External Data High Quality & Conforming to Corporate Standards?

Sales Financials ServiceSupply ChainManufacturing

Customers

Distributors

ContractManufacturers

DirectSuppliers

FreightForwarders

OceanCarriers

FinancialInstitutions

CommercialInsurers

3rd PartyLogistics

ForecastPoint of SaleSales Order

Inbound MaterialsInventory

Work In Progress

Shipment StatusProof of DeliveryProduct Catalogs

Bank StatementsRemittance Advice

Trade Confirmations

Repair OrderWork Order Status

Warranty Claim

| © 2011 GXS, Inc.

Data Feeding ERP Systems

66%

34%

Generated internally

Generated externally

Customers/ distributors

43%

Supplier/ contract manufacturers

31%

3PLs17%

Other9%

Data feeding ERP systems* External data feeding ERP system

* No statistical differences by segment

Q. What percent of the data feeding your ERP system is generated internally vs. externally?

Q. What are your plans for technologies to support workforce management and procedures in the next 2 years?

N =121 Respondents

| © 2011 GXS, Inc.

Data Quality Compromises ERP Value

• Externally sourced data is rarely

checked before it enters ERP’s

• Once the information is in an ERP,

quickly spreads across the

enterprise and beyond

• Inaccurate data affects downstream

business processes

• Inaccurate data leads to incorrect

electronic documents

| © 2011 GXS, Inc.

External Transactions Requiring Exception Handling or Rework

21%

33%

26%

20%

Less than 1%

1-2%

3-4%

More than 5%

79% of respondents said that more than 1% of transactions needs reworking

If a company processes 1 Million transactions per year this represents 10,000 transactions that will need reworking

Q. What percentage of the transactions originating from external trading partners which are processed directly into your ERP system require exception handling or error processing?

Extensive Rework

N =121 Respondents

| © 2011 GXS, Inc.

Policy Changes with Trading Partners Resulting From Changes to ERP System

69%

47%

38%

11%

1%

Enforcing higher levels of data quality from trading partners

Implementing new transaction types with trading partners

Measuring new KPIs and issuing penalties to supplies for non-compliance

No changes to scope of B2B are planned for current ERP projects

Other

Q. As a result of changes to your ERP system, which of the following changes is your company making to policies with trading partners?

N =121 Respondents

| © 2011 GXS, Inc.

High Availability in B2B is Critical

• Ensuring B2B information is

available 24/7 is crucial to the ERP

environment

• B2B platforms ensure that externally

sourced information can be used by

internal business applications

• Lack of B2B information leads to

production line stoppages

• Business critical decisions need to

be made in real-time

| © 2011 GXS, Inc.

Loss of B2B Connectivity

No52%

Yes48%

79% of Automotive companies have experienced loss of B2B connectivity

Loss of B2B connectivity

Q. Has your company every experienced a loss of B2B connectivity that has impacted your manufacturing operations?

Q. How important/effective is your company’s contingency plan for mitigating risk of losing B2B connectivity to manufacturing operations?

73%

48%

Importance

Effectiveness

Importance/Effectiveness of Contingency Plan

Gap = 25% !

Significant Differences

N =121 Respondents

| © 2011 GXS, Inc.

Policy for no Scheduled ERP Downtime

No26%

Yes74%

Q. Does your company currently have a policy for no scheduled ERP downtime for the end of quarter sales periods?

63%74%77%82%

38%26%23%18%

Food & Beverage (n=32)

High Tech (n=39)CPG (n=32)Auto (n=28)

No

Yes

Industry

N =121 Respondents

| © 2011 GXS, Inc.

Programme Management

• Integrating ERP and B2B requires

constant monitoring to ensure

problems are resolved efficiently

• Changes made to an ERP system

may need to be incorporated into

the B2B platform as well, or vice

versa

• Need to ensure that ERP/B2B

integration platforms are tested

and deployed correctly

| © 2011 GXS, Inc.

35%

48%

17%

Basic testing of most obvious, common tasks

Robust testing of common and obscure, less-used functions

Testing efforts were terminated prematurely to meet externally

imposed go-live deadlines

Testing Approach on ERP Projects with B2B Integration

Q. During the course of your ERP projects that included significant B2B integration, which of the following best describes the testing approach performed with internal participants and external trading partners?

36%

35%

29%

Internal Participants External Trading Partners

N =121 Respondents

| © 2011 GXS, Inc.

Changes to B2B Integration Strategy as a Result of Changes to ERP System

59%

35%

25%

12%

11%

Consolidating multiple, disparate B2B gateways onto a common platform

Standardising B2B technology enterprise wide on a single vendor

Changing the primary vendor used for B2B integration

Oursourcing B2B integration to a third party organization

None

Q. As a result of changes to your ERP system, which of the following changes has your company also made to your B2B integration strategy?

Significant Differences

29% of Automotive companies said outsourcing B2B integration to a 3rd party

N =121 Respondents

| © 2011 GXS, Inc.

Severity of Delays in ERP Projects Caused by B2B Integration Issues

26%

58%

12%

3%

Major issues were encountered which caused significant delays

Minor issues were encountered which caused small delays

Minor issues were encountered, but caused no delays

No issues were encountered

Companies with major issues/ significant delays (n=32)•34% Automotive•28% Food & Beverage•28% High Tech•9% CPG

Q. Which of the following best describes the issues you may have encountered with B2B integration which caused a delay to ERP projects currently underway or previously performed?

N =121 Respondents

Delays in both B2B planning and integration can potentially cost companies in excess of

$45K a day or $1Million per month…..

| © 2011 GXS, Inc.

How Cloud & B2B Outsourcing Help ERP/B2B Integration Projects

| © 2011 GXS, Inc.

B2B is Moving to the Cloud...

Business Applications

ApplicationInfrastructure

Compute & Storage

| © 2011 GXS, Inc.

By 2015, cloud-based solutions will be growing at a faster rate than on-

premises solutions.

By 2015, most enterprises will have part of their run-

the-business software functionally executing in

the cloud, using PaaS.

By 2015, most enterprises using PaaS services or technologies will have a hybrid environment in

which internal and external services are combined.

Source: Gartner, January 2011

According to Gartner, a New Continent is Emerging.....

| © 2011 GXS, Inc.

How the Cloud Simplifies B2B Complexity

| © 2011 GXS, Inc.

Business Context•Ability to Introspect and Breakdown

Messages in to Structured Objects•Pre-defined document standards•Business user interfaces

Process Orchestration•Manages end-to-end information

flow with conditions and visibility, and coordinates access to shared services

•Tailored Visibility

Data Enrichment•Compute services for transformation•Operational Business Rules and Data Quality

•Extensive libraries

Identity and Control•Pre-wired integration pairs•Global B2B semantics repository

The Cloud Provides IT with Rapid Access to Built-In Expertise and Capabilities

| © 2011 GXS, Inc.

B2B Outsourcing Experience

Areas of Expertise• Infrastructure• Operations

• Implementation• Support

• Number One Transaction Outsourcing Vendor

• Over 500 customers utilising GXS’ B2B outsourcing services today

• Extensive Transformation Capabilities• Capacity to develop 10,000 maps

annually• Over 30,000 maps and 200 document

types currently in production

• Areas of Expertise:• Programme management• Global network infrastructure• E-Commerce operations management• 24x7 support, visibility and alerts

| © 2011 GXS, Inc.

B2B Outsourcing Environment

| © 2011 GXS, Inc.

ERPApps

SplitOrders

ConsolidateInvoices

ConfirmRequired

Fields

Translate Customer

Data

ConfirmValid Data

Split by Payment

Types

AggregateAccountBalances

Units ofMeasure

TransformCarrierCodes

Out ofSequence

Documents

Conforms toBusiness

Rules

Check within

Tolerances

ConfirmRequired

Fields

ConfirmValid Data

Customers and Distributors

Direct & Indirect Material Suppliers

Logistics ProvidersFi

nanc

ial I

nstit

utio

ns

Link Invoice

to Payment

B2B Helps to Establish an ‘ERP Firewall’

| © 2011 GXS, Inc.

Data Quality & Compliance Visibility and Operational Intelligence to Ensure Data Quality

Monitors B2B transactions for validation, exception management, analytics and reporting, and score carding. Real-time visibility

─ Proactively track “in-flight" transactions based on a configurable set of rules or criteria to resolve errors before impact to business

Quarantine exceptions─ Reliable infrastructure permits or denies electronic data

interchanges between an enterprise’s applications and external business partners

Community portal ─ Configurable role-based access enables both internal and

external users to view data and take action online Back-office integration

─ GXS Trading Grid provides a consolidated view of transactional data from all back-office systems

| © 2011 GXS, Inc.

Data Quality & ComplianceProtecting Mission Critical Transaction Data

IDENTIFYRejectable Document

REAL-TIME ERRORHold in Exception Queue

WARNINGPass through and Log

FIXCorrect then Retransmit

1 2

34

| © 2011 GXS, Inc.

SAP Integration Expertise

Over 100 Managed Services customers with direct integration to SAP

SAP Labs testing and extensive experience with SAP integration

─ Financials─ Supply Chain Management─ Advanced Planning and Optimisation

Direct connections to hundreds SAP production instances

Connectivity options - FTP over VPN,SAP ALE

IDOC status messaging – provides immediate verification or error status

SHPMNT03INVOIC01PEXR2001PEXR2002FINSTA01

DELVRY01ORDERS01PROACT01PRICAT01TRXSTA01

Example SAP IDOCs Supported

| © 2011 GXS, Inc.

Over 25 Managed Services customers with direct integration to Oracle ERP

Extensive experience with Oracle e-Business Suite ─ Financials─ Transportation Management─ Warehouse

Experienced with integration to PeopleSoft, JD Edwards and Retek

Best practices for change management after patches, testing lifecycles, internationalisation

Experienced with Oracle e-Commerce Gateway and Transaction Interface files

Oracle Integration Expertise

Example Oracle TIFs SupportedPOI

POCIPOAO

INISBNIASNI

ADVOPYOCATI

| © 2011 GXS, Inc.

Benefits of Using B2B Outsourcing for ERP B2B Integration Projects

• Ensures projects remain on time and under budget with

scalable resourcing and ERP best practices

• Achieves faster ROI from new modules and transaction

types with rapid on-boarding of trading partners

• Less risk of connectivity loss impacting manufacturing

operations with high availability architecture

• Improves data quality for 1/3 of externally originated

information via ERP firewall

| © 2011 GXS, Inc.

Provides a Highly Available Platform

• High, 99.95% available, B2B infrastructure with at

least two data centres providing built in redundancy,

disaster recovery and fail-over capabilities

ERP systems need to be

able to receive information

from external trading

partners on a 24/7 basis....

| © 2011 GXS, Inc.

Implementing Document Maps

• Extensive any-to-any mapping services and support

for many different types of SAP IDOCs for example

ERP/B2B integration projects

require numerous document

maps to be created and

maintained on an ongoing

basis....

| © 2011 GXS, Inc.

Trading Partner Connectivity

• Mediate between any communications standard and

provide direct connectivity via SAP ALE and SAP PI for

example

ERP systems need to be

connected to numerous

trading partners using many

different global connectivity

standards.....

| © 2011 GXS, Inc.

Managing Trading Partner Communities

• Comprehensive community on-boarding service to

allow trading partners of any size or technical

capability to connect to a B2B Platform

ERP/B2B integration

projects require fast on-

boarding of trading partners,

anywhere in the world.....

| © 2011 GXS, Inc.

Proactively Monitoring Data Quality

• Proactive monitoring of all transactions so that if a

problem is detected it can be resolved before the

customer or supplier is impacted

All external data needs to be

checked for accuracy and

conformance before

entering an ERP system.....

| © 2011 GXS, Inc.

Programme Management

• Dedicated programme managers to monitor the

progress of ERP/B2B projects to address integration

issues as they arise

The complex nature of

ERP/B2B integration projects

requires skilled resources to

keep these projects on

schedule.....

| © 2011 GXS, Inc.

Provide Global Support

• 24/7 multi-lingual support to address problems as

quickly as possible, anywhere in the world

Today’s ERP environments

cover multiple plants located

in many different regions of

the world.....

| © 2011 GXS, Inc.

Automotive SupplierCustomer Case Study

Company Overview

Tier 1 Automotive supplier, one of the largest in the industry, supplying all major OEMs, with 3000 trading partners around the world

After being divested they had to establish their own B2B environment as soon as possible

Solution Deployed

Business Issues

• GXS Managed Services, including 600 maps and

connectivity to 3000 trading partners

• Full integration with SAP to allow publication of IDOCs

• Programme Managers to co-ordinate 150 change requests

per quarter

• Flexible B2B platform to allow for growth of 30% year on

year

• Difficult economic environment, strong competitive

pressures so needed to reduce operational costs globally

• Needed to fully integrate B2B platform to a new e-payments

solution and ERP system being implemented across their

global manufacturing plants

| © 2011 GXS, Inc.

Computer Server OEMCustomer Case Study

Company Overview

One of the world’s leading providers of computer servers and storage devices

Supply computer equipment to some of the world’s largest data centres. A leading advocate and developer of open source based software solutions

Solution Deployed

Business Issues

• Consolidation of multiple VAN’s onto GXS Trading Grid,

highly available integration platform

• B2B integration to their upgraded Oracle 11i ERP

• Provision of tailored maps to communicate between

proprietary UBL formats to EDI and XML document formats

• Customised business logic to support business activities

with Japanese customers

• Needed to consolidate all B2B traffic across multiple VAN

providers on to one global B2B platform

• Wanted to make the company easier to do business with

their many high profile customers & distributors

• Required full integration to their Oracle ERP system

| © 2011 GXS, Inc.

Clothing ManufacturerCustomer Case Study

Company Overview

One of the world’s leading apparel manufacturers. They design, source and manufacture a range of leading clothing brands

Company consists of six major divisions with products distributed and sold via a network of over 200 leading retailers around the world

Solution Deployed

Business Issues

• Managed the B2B integration with SAP ERP across six units

• Created 280 maps and converted numerous EDI documents

into SAP IDOC format

• Implemented AS2 connectivity with major customers and

managed the migration of EDI transactions from incumbent

VAN provider

• Limited resources to implement a new global SAP

environment while managing their existing B2B platform

• Working with a diverse range of leading global retailers so

wanted to improve the integration and efficiency of their

global supply chain

| © 2011 GXS, Inc.

For Further Information

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| © 2011 GXS, Inc.

Questions?

Mark MorleyIndustry Marketing Director• Email: [email protected]

• Phone: +44 (0)1932 776040

| © 2011 GXS, Inc.

Thank You for Your Participation!For More Information…

Contact GXS• Web: www.gxs.eu• Email: [email protected]• Phone: +44 (0)1932 776047