Executive Briefings

Collaboration & Integration: The Key to Gaining Control of Integrated Demand-Supply Networks

Analyst Insight: Companies should evaluate how to fix select visibility and control problems in the supply chain without having to rip and replace the entire infrastructure. They should look at ways by which they can expand collaboration with trading partners without adding significant costs of on-boarding, training and maintaining these partners. SaaS and managed services are approaches by which these companies can increase the utilization of their existing software assets.

Supply chain globalization, increased complexity, rising costs, and the need to respond rapidly to customer demand changes and supply chain disruptions are forcing companies across industries to re-think their old approach to supply chain management. The evolution of today's multi-tiered supply and demand networks is driven by the need to reduce costs and achieve long-term competitive advantage.

Seventy-one percent of the participants in a recent study indicated that they were removed from their end customers by at least two levels, or tiers, of the supplier chain. In addition, rising supply chain costs, escalating customer service demands, an increasingly global operation and increasing number of value chain partners have resulted in increased complexity. This complexity has resulted in companies gradually losing visibility and control over their network-wide supply chain operations and performance metrics. The reason why companies need to have focus on business partner collaboration over other internally focused actions is that in today's demand-supply networks, companies cannot survive without enabling B2B integration and collaboration.

The top challenges companies have faced when implementing process integration and collaboration automation initiatives have been (responses were limited to the top three):

• Technology solutions required to electronically enable collaboration are too costly - 40 percent
• Lacking infrastructure or resources to support and sustain electronic enablement initiatives - 39 percent
• Staff resistance to adoption - 30 percent
• Lack of an enterprise-wide information management strategy for the supply chain - 30 percent

The Outlook

The upfront investment required and the ensuing internal IT costs have, in the past, prevented many companies from implementing the necessary capabilities for supply chain connectivity and integration. The most time consuming tasks performed by the IT organization with respect to process integration and collaboration efforts include internal application / process mapping (71 percent), user and technical support (57 percent), handling end user requests for EDI or other translation of data (45 percent), and partner enablement (42 percent). These costs can be alleviated with the adoption of a SaaS technology for supply chain integration and collaboration.

Supply chain globalization, increased complexity, rising costs, and the need to respond rapidly to customer demand changes and supply chain disruptions are forcing companies across industries to re-think their old approach to supply chain management. The evolution of today's multi-tiered supply and demand networks is driven by the need to reduce costs and achieve long-term competitive advantage.

Seventy-one percent of the participants in a recent study indicated that they were removed from their end customers by at least two levels, or tiers, of the supplier chain. In addition, rising supply chain costs, escalating customer service demands, an increasingly global operation and increasing number of value chain partners have resulted in increased complexity. This complexity has resulted in companies gradually losing visibility and control over their network-wide supply chain operations and performance metrics. The reason why companies need to have focus on business partner collaboration over other internally focused actions is that in today's demand-supply networks, companies cannot survive without enabling B2B integration and collaboration.

The top challenges companies have faced when implementing process integration and collaboration automation initiatives have been (responses were limited to the top three):

• Technology solutions required to electronically enable collaboration are too costly - 40 percent
• Lacking infrastructure or resources to support and sustain electronic enablement initiatives - 39 percent
• Staff resistance to adoption - 30 percent
• Lack of an enterprise-wide information management strategy for the supply chain - 30 percent

The Outlook

The upfront investment required and the ensuing internal IT costs have, in the past, prevented many companies from implementing the necessary capabilities for supply chain connectivity and integration. The most time consuming tasks performed by the IT organization with respect to process integration and collaboration efforts include internal application / process mapping (71 percent), user and technical support (57 percent), handling end user requests for EDI or other translation of data (45 percent), and partner enablement (42 percent). These costs can be alleviated with the adoption of a SaaS technology for supply chain integration and collaboration.