Supply chain trends

21 Sep 2009

B2B rollout delays cost manufacturers more than $1 million per month

GXS has revealed the results of an AMR Research study focused on the tie between B2B e-commerce deployments and enterprise resource planning (ERP) system upgrades. The study found that for companies with multi-million dollar ERP deployments, delays due to lack of B2B planning and integration can cost them in excess of $45,000 a day or more than $1 million a month. Nearly 85 % of the companies surveyed experienced delays in ERP rollouts due to B2B integration issues.
The AMR Research survey, which included respondents from the food and beverage, high tech and consumer products industries as well as from automotive suppliers and OEMs, established a strong relationship between ERP projects and new B2B e-commerce needs.

According to the study

• 65% of respondents performed inadequate testing of B2B prior to new ERP launches;
• 47% of companies expanded the scope of their B2B efforts (e.g. new transaction sets or trading partners during ERP projects);
• 79% of companies have a greater than 1% error rate for B2B data; and
• 57% of companies have experienced a production outage due to lack of B2B connectivity.
  

Importantly, the AMR Research survey also found 34% (more than one-third) of data in ERP systems originates from outside the enterprise (eg. from customers, suppliers, 3PLs, etc). This demonstrates the importance of integrating external trading partner transactions and data with ERP systems. While many companies are focused on managing data inside the corporate eco-system, that approach addresses less than two-thirds of the data typically feeding an ERP system, making it costly and incomplete. By addressing the external data feeding their ERP systems, companies can get more out of their investment and ensure the accuracy of their trading partner transactions. Similarly, 34% of respondents said that B2B integration staff are supporting ERP-related projects. A lack of resources to manage both B2B and ERP related integration projects means that B2B projects could be vulnerable to implementation delays and relationships with trading partners could be compromised.

“The symbiotic nature of B2B and ERP is often overlooked, as many manufacturing companies tend to focus design, development and testing efforts on business processes within the four walls of their enterprise. Project leaders often forget the critical supply chain links and external data flows needed to power ERP applications,” said Steve Keifer, vice president of product and industry marketing at GXS. “Too many companies get half-way through a new ERP roll-out to discover that they are not staffed to support the massive mapping, testing and trading partner management activities necessary for ERP upgrades. Our goal is keep ERP projects on-schedule and under budget with a best-in-class approach to B2B integration.”

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