In my last blog entry, I discussed the river of data that flows between trading partners. This river of data has the potential to deliver far beyond it’s role in business process execution, but there are challenges. The first challenge is establishing a context.
The splash of water to the left co
uld be the drop that breaks the dam, the drink that saves someone from thirst, the coolant that prevents the engine from overheating, or any one of a dozen other potentials — the point is that you cannot tell from the picture, because it lacks any sort of context (it’s a splash from a larger body of water — wouldn’t want to leave you in suspense…).
When a purchase order, ship notice, payment, or change in inventory status comes flowing across the wire, it too needs a context to be truly useful — but what do I mean exactly by context? It’s one of those concepts that is easiest to understand through examples.
Types of Context in B2B
Process: what business process is this transaction a part of? One of the most common processes GXS helps customers with is the “order process”, but there are actually many intersecting processes going on with any real interaction. For instance, orders (hopefully) result in shipments and (sadly, for the buyer) invoices. The shipment and invoicing processes intersect the order process — so a given transaction (say, an Advance Ship Notice) may participate in many processes simultaneously. The ability to see a document in the context of a process is very valuable. Order processes are typically not too bad in this regard, as the originating order number is often a part of the downstream transaction flow. The trick to process context is associating a given transaction to a completely defined process so that you know how it is supposed to be handled.
Customer/Supplier (Partner): what business relationship is this transaction a part of? Hopefully knowing your partner is not an issue — but partner context is not about identity, it is about the relationship. If a supplier is going to be late on an order, is it part of a pattern? Am I about to violate a service level for a customer that I am in the midst of renegotiating a big contract with? This is theoretically the realm of the CRM/SRM/ERP infrastructures, but very few of them operate well in real time, as events are flowing in off the wire. The ability to put a B2B transaction in the right partner context quickly can have a big impact.
Product: what product line is addressed by this transaction? Is it a new product, a retired product, a product that doesn’t exist (i.e. a data error). Product context is also the entry point for trade promotions management in some industries. This has been an interesting area of late, as customers have sought to tie in B2B execution systems to master data management, precisely for ensuring a correct product context.
Financial: how big is this transaction? What effect does it have on the financial metrics of both organizations? Traditionally the realm of ERP systems, the ability to look into the river of data and see the money flowing can be very powerful. Sometimes establishing this context is as simple as integrating effectively to the ledgers within the traditional ERP systems. Other times, smaller companies may look for help from a SaaS (software as a service) offering to deliver financially oriented reports on what is flowing (because their internal systems lag reality a bit).
Logistical: what does this transaction tell me about the logistics involved? Specifically, is this shipment/payment/etc going to be where I need it (either physically or financially) when I need it? As an example, if a big promotion is planned for a given product, and several containers of it are held up in customs, that could be a big issue. If a truck of critical components for a factory is delayed, is that an annoyance or will it grind production to a halt. Part of the logistics context is understanding how things move, and what ultimate impact a disruption could have. If you know that an item is being shipped by boat, rail and truck — and is delayed in a rail yard, can the truck make up the time? When is the product needed? To establish a logistical context, you need to know the planned logistics (often available in shipping transactions), and the historical performance of the modes and carriers involved.
Market/competitive: has there been a change in the order pattern? If a few customers (or even one) change their order pattern, it could be a sign of a competitor move. If several customers (or suppliers) suddenly change behavior, it could be a sign of a shift in the market. Change is really only something you can observe within the context of a given relationship. The reason B2B in context is a critical area to observe is that averages and aggregates can sometimes be misleading. If the market is growing, but a big customer is shrinking, you may not see the customer issue in the totals.
There are many kinds of context I have not even discussed (geographical, regulatory, legal), but you get the idea. The challenge is to decide which contexts make sense, and learn to see the river of data flowing between you and your partners through the lens of those contexts.
