**Editor’s Note: This article appears in the December print edition of the ebizQ Buyer’s Guide, available as a supplement to the Business Integration Journal.
Companies have long invested in EAI (enterprise application integration) and B2Bi (business-to-business integration) tools to help them tie internal IT resources and external partners together. But, the next generation of business interaction is requiring a level of organizational cooperation and information use that has heretofore not been on the radar screen.
With that in mind, let’s look at the collective tea leaves for those that are pushing the envelope in these area and see if any pattern appears to reveal the most likely future. We’ll find that the seemingly disjunct array of initiatives currently being pursued is not some rag tag collection of unrelated projects, but rather, carefully chosen threads that together weave a fine quilt of business efficiency and competitive advantage for those willing to play.
START WITH THE END IN MIND
Let’s begin by looking at the end state toward which the most proactive companies appear to be moving and see what it tells us about where our journey will most likely lead. We first need to understand the three foundational goals that the leaders are pursuing:
Community information integrity. Consistent, accurate information within and between interacting community members.
Community process alignment. Holistic, synergistic orchestration, management, and execution of actions within and between interacting community members.
Community visibility. Cross-enterprise access to and productive use of decision-affecting information.
These pillars of effective interaction ensure that the value you and your partners (be they external or internal) realize from your future initiatives will be optimized.
DON’T FOOL YOURSELF
Though each of the goals is certainly valuable in its own right, optimum execution comes only when you’ve addressed all three. Consider, for instance, how dependent process alignment and visibility are on the quality, consistency, and accuracy of the information being used.
If the input is incorrect or inconsistent, no amount of process reengineering, automation, or coordination will erase the fact that decisions are being made based on erroneous input. Regardless of how easily accessible we make the information—or how cleverly it’s analyzed—the conclusions drawn from that content will always be directly dependent on whether the input used to make those decisions is truth or fiction.
Similarly, as interacting partners, we could completely cleanse and synchronize—both internally and between our two organizations—the information we’ll use in our interaction. And, we could diligently execute community visibility by making pristine information available and effectively analyzing it. But, because collaborative interaction is directly dependent on how coordinated our processes are we’ll still produce disappointing results if we fail to align our processes with one another.
Finally, impeccable information and perfectly aligned processes won’t make up for lack of visibility. After all, worth is generated when an action is properly executed to deliver that worth. The action is triggered by conditions that signal its need. That need is recognized because someone or something (1) had access to pertinent information and (2) analyzed that information appropriately to detect conditions that warrant action. Visibility makes the right information available to the right entity at the right place at the right time and in the right form and, then, facilitates the effective analysis of that information to detect worth-generating actionable conditions. The cleanest data and the most highly coordinated processes on the planet can’t make up for lack of effective visibility.
UTOPIA ISN’T ALWAYS PRACTICAL
The ideal order for achieving our foundational goals is to (1) pursue information integrity—both within your organization and within your community—(2) achieve process alignment among you and your partners, and (3) establish visibility within the target community. But, the reality is that it’s often neither practical nor possible given the rate at which the world places demands on our limited resources.
The solution—when faced with such constraints—is as follows:
Identify the partners with which you intend to interact.
Identify the information you will be using in your interaction.
Determine which processes will be involved in the interaction.
Decide which actionable conditions must be detected and acted upon to deliver the desired worth.
Agree on how the participants will act upon those conditions to ensure success.
With this knowledge in hand, you and your partners can:
Ensure that the information to be used is accurate and consistent within and between the participant organizations (i.e., information integrity).
Coordinate the processes of all enterprises involved to optimize the worth that will come from this interaction (i.e., process alignment).
Determine the analysis that must be performed on the information in order to identify and act upon worth-generating actionable conditions (i.e., visibility).
CLOSE, BUT NO CIGAR!
But, how does all of this help us understand where things are going? Let’s start by recognizing the gaps we’ve left in the wake of past community initiatives. Take EDI (electronic data interchange) purchase orders, for instance. While EDI allowed us to make order information available when, where, and in the form needed for the recipient to use automation to process the order, we failed to optimally benefit the more holistic order fulfillment process because we did not address data integrity and we did not align processes associated with the larger order fulfillment process. Said differently, we focused myopically on the electronic exchange of the order and not the reason for doing so.
We’ve certainly made subsequent attempts at improving the order fulfillment process. To improve visibility, we exchange purchase order acknowledgements and/or advanced shipping notices. But, this is similarly flawed since we’ve failed to align processes or establish proper information analysis to act on conditions that require action. We bar-coded our products to facilitate more rapid receipt. But, because we ignored data integrity (until recently), we’re able to read the bar code, but we can’t recognize (a) what the product is or (b) that it’s not what we ordered.
We’ve tried to aid the order fulfillment process by making point of sale information available—in order to help suppliers better prepare to fill orders. But in doing so, we’ve only addressed the availability portion of visibility. Because we’ve not agreed on the analysis portion of visibility, we’ve forfeited the ability to identify and execute on actionable conditions. Because we’ve failed to align our processes, the information’s not effectively leveraged for mutual worth. And, even if we’d satisfactorily addressed process alignment and visibility, our efforts would still be undermined because we’ve not yet established data integrity within our community.
FILLING THE GAPS
So, then, the question still stands. What lies ahead? The short answer is, achieving our three foundational goals. The massive worldwide efforts to synchronize product information, pricing and promotions, images, etc. are clearly aimed at addressing the community information integrity deficit.
Community visibility initiatives (such as sharing POS information, inventory levels, order status, etc.) are evolving to include greater process alignment and more sophisticated visibility (i.e., availability and analysis). Initiatives such as vendor-managed inventory; collaborative planning, forecast, and replenishment; evaluated receipt settlement; scan-based trading; etc. are enabling buyers and sellers to act as a single cohesive unit. These clearly point to a future with more and more cross-enterprise information availability and analysis and process alignment and refinement.
The fact is, no venture is exempt from dependency on our three foundational goals. Even the success of something as cutting edge as RFID (radio frequency identification) is directly linked to these objectives. The sharing (i.e., availability portion of visibility) of RFID information will enable organizations to know precisely where a particular product is/was. But, without the analysis portion of visibility, the participants won’t be able to recognize those actionable conditions that—if effectively acted upon—generate worth. Without aligning processes across the community, RFID data will simply highlight how bad the uncoordinated processes really are. And, without achieving information integrity (internally and throughout the community), interacting partners will know exactly where the product is, but they’ll not be able to agree on what the product is.
For decades, we’ve been moving in the right direction without fully understanding our destination. Now, after years of attempting to solve the problem from a variety of angles—each of which helped in its own way, but still fell short of the mark—we’re coming to the realization that only by achieving our three foundational goals can we finally fill the gaps that continue to plague our companies.
Only by achieving information integrity within and between interacting participants can we be certain that the decisions we make—and subsequent actions we initiate—are based on the current truth. Only by aligning the processes of interacting participants can we extricate the disgusting waste that chokes the life out of our businesses. And, only by solving for information availability and analysis to identify and act upon worth-generating actionable conditions can we hope to achieve community visibility.
At the end of the day, it’s anybody’s guess as to what the next initiative will be. But, we can be certain that each initiative will involve increased attempts at improved internal and external interaction. And, every initiative will require us to improve information integrity, process alignment, and visibility throughout the community in order to succeed. So, preparing for the future means preparing to achieve our three foundational goals. They’re the exponential factor that will magnify the results you’ll get from any interactive initiative.
About the Author
John Stelzer is Director of Industry Development for Sterling Commerce. Since 1984, he has been providing education and consulting on electronic commerce—to date, educating more than 27,000 professionals from over 16,000 companies. For more information on electronic commerce in the retail industry or data synchronization specifically, John can be reached at 614.793.7046 or firstname.lastname@example.orgMore by John Stelzer
About Sterling Commerce
Sterling Commerce is one of the world’s largest providers of business integration solutions. For more than 25 years, thousands of companies have depended on Sterling Commerce expertise to optimize collaborative relationships through the integration of applications, external partners, suppliers and customers. With more than 25,000 customers worldwide, Sterling Commerce is the dominant business integration solutions provider in retail, consumer packaged goods, manufacturing, financial services and telecommunications.