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This Week in IDEA | November 11, 2009
Our eNewsletter, This Week in IDEA, keeps you informed with the latest news and education about IDEA, our solutions and services, and our customers and partners. IDEA’s knowledgeable staff and other contributing writers share insights, resources and special offers to help you Unleash the power of e. Subscribe now to receive This Week in IDEA in your email inbox every other Thursday and add our RSS feed to your reader.
- New IDEA IRD Customers
- Spotlight Article: Increase Your Margins by Enabling Manual Customers and Suppliers
- Tips on Populating Standardized Category Codes in IDW
- Watch the 2009 Forum Photo Slideshow
- IDX Hot Fact: A New Way to Search for B2B Documents
New IDEA IRD Customers
IDEA, a 1SYNC Data Pool On-Board Solution (OBS) partner, implements suppliers that subscribe to the 1SYNC data pool using IDEA's IRD CERICOMX® application. IDEA was recently assigned 33 suppliers:
- LiXit Corporation
- Winston Company
- Davis-Carroll Roses USA, Inc.
- Roadmaster (USA) Corp.
- Acme International
- Rainbow West Apparel, Inc.
- NYKO Technologies
- Berkshire Blankets
- C-Life Group, LTD
- Public Clothing Co, Inc.
- Charley & Sons, Inc.
- Gear for Sports, Inc.
- Land N Sea
- AdInfinitum, Inc.
- Extreme Concepts, LLC
- BCTC Apparel, Inc.
- D Bar B Sausage & Meats, LLC
- Pattco, Inc.
- Orion Fashions, Inc.
- International Mulch Company
- American Bag Company
- Gubler Orchids
- Bronson Sales Corp
- Yo-Zuri America, Inc.
- BJ Products, Inc.
- Apparel Limited, Inc
- Metal Fusion, Inc.
- Vitelli Foods, LLC.
- Now and Zen Productions
- Zoomers, Inc.
- Uncle Charley’s Sausage Co.
- HLD Global Limited
These companies will be trained to use IRD CERICOMX®, an IDEA branded product for supporting and uploading supplier product information into the GS1 Registry® and GDSN via the 1SYNC Data Pool.
If you would like to find out more about the CERICOMX® product, please contact John Etrie, IRD Product & Customer Support Manager, at .
Spotlight Article: Increase Your Margins by Enabling Manual Customers and Suppliers
By: Josh Hardy, Manager, Global Products & Marketing - B2B and Enterprise Integration Solutions, Sterling Commerce, An AT&T Company
Companies make significant investments in B2B software and connectivity to automate business transactions with their trading partners. With most, the primary focus is to drive efficiencies with large trading partners; leaving the smaller trading partners unchanged—and a lot of money on the table.
Many companies adhere to the 80/20 rule; electronically linking 20% of their partners, which represent as much as 80% of their transaction volumes or revenues. This approach is a good start; however, it is not a long term e-commerce strategy. Companies often fail to automate transactions with the remaining 80%, who continue trading by phone, fax, e-mail, and postal mail.
This trend is driven by the misconception that it’s expensive and complex to electronically enable business processes of the lower transaction trading partners. It is more likely; however, that companies don’t fully understand the true cost of manual transactions—the impacts on customer satisfaction, margin erosion, visibility, and cycle times.
Understand Your Trading Partner Ecosystem
Trading communities are usually made up customers, suppliers, financial institutions, and logistics providers; all of which vary in size and electronic trading capabilities. Often times, these partners are identified in tiers, and grouped by common criteria.
The following diagram shows the trend of B2B strategy segmentation. Most companies stop integration efforts at the Tier 1 level, connecting occasionally to Tier 2 partners; ignoring the largest segment of trading partners (those below the dotted line)—Tier 3 and Tier 4 partners believing it is not worth the time, money, or effort.
Electronic Commerce Segmentation Trends - Sterling Commerce, 2007
- Tier 1 partners - Trade large document volumes, and are easier to integrate with. Maintains a sufficient IT staff, and invested in becoming electronically enabled. Often very large organizations, industry leaders, and generally wield the most influence in the supply chain hierarchy. Originators of e-commerce initiatives.
- Tier 2 partners - Moderate in many respects: document and partner volume, integration complexity, capabilities, and representation within the community. Many Tier 2 partners communicate electronically resulting from Tier 1 requirements. Usually not proactively seeking additional electronic relationships.
- Tier 3 and Tier 4 partners - Strictly manual; phone, fax, e-mail, and postal mail. Characterized by low document volumes, little integration capabilities or IT staff. Perceived to be challenging to integrate; however, they’re the largest group of the trading community. These partners confuse e-mail and fax as e-commerce. Tier 3 and Tier 4 partners fail to realize the manual intervention in creating, sending, receiving, and processing documents. Changing the behaviors of these partners is extremely difficult.
Understand What Your Manual Partners Are Costing You
To understand the value of electronically enabling your Tier 3 and Tier 4 partners, you need to determine your manual processing costs. Most companies do not have access to this information. Sterling Commerce created a B2B Automation Savings Calculator to make this information more accessible. You input information regarding your manual trading partners, and the calculator applies formulas against industry averages for manual document processing costs, error rates, and error reconciliation rates, to get your estimated monthly manual processing costs. You can use your own cost information, or the following averages that came from an independent research project completed by Forrester Consulting, on behalf of Sterling Commerce:
- Orders - median value of $10.10
- Invoices - median value of $12.35
- Remittances - median value of $12.35
- Estimated manual document errors - 10%
- Error reconciliation costs - Median cost of $53.50 (including $33.50 in labor and $20.00 in materials)
Determine Your Strategy
When determining your strategy, ask yourself the following key questions:
- Will your solution require a behavior change, and will you use incentives, mandates, or formal requests for compliance?
- Will you focus on suppliers or customers, and which of the two would be more willing to change their business processing behavior for you?
- Will you focus on a particular document, or automating a particular communication, such as e-mail or fax?
Changing behaviors and processes is harder than changing technology. Behaviors will change when you offer something of value as encouragement.
What behavioral change do you want your small manual partners to make, and is the change beneficial to them? The more change you request from your partners, the greater the associated benefit you need to provide. Some successful benefits include:
- Discounts for electronic orders
- Better payment terms for customers or faster payment to suppliers
- Improved or guaranteed delivery/promise dates
- Increased visibility into the larger order/supply chain
- Improved supplier ratings
Small changes are easy to implement, and can mean big savings for you. For example, asking a customer who faxes orders, to switch to a fax-to-EDI conversion service, is a small change. They just have to put a new number in their fax machine memory, and change their fax form. For you it eliminates the costly, and time-consuming manual processing.
Customers vs. Suppliers
They may be small customers; but they are your customers, and they can impact your business, your reputation, and possibly your bottom line. Don’t shake the big stick of a requirement or mandate, unless you have no alternative and can include an incentive.
Suppliers, on the other hand, serve you as the customer, and will be more likely to comply with your request, as long as your solution can be easily implemented and managed without substantial costs and complexity.
Document Type vs. Communications Format
What is your reason for electronic enablement . . . ordering efficiency, purchasing efficiency, transaction cost reduction? Knowing your priorities will lead you to the right documents. Purchase orders and invoices have the highest cost to manually process and often contain the greatest number of errors. For that reason, they are usually the first documents to be automated.
Communications formats are an easy way to segment your manual partners.
Partners who send and receive faxes are prime candidates for a fax conversion service; their behavior is not impacted, yet you receive the benefits. Convert inbound fax orders from your customers to EDI, or have your outbound orders converted from EDI to fax, and delivered to your suppliers. Either way, impact is low and you reap the savings from automation.
Customers who exchange documents by e-mail, have Internet access. They may be willing to use Web forms instead of e-mail. You can choreograph the ordering process to reduce errors, or enforce business rules that result in greater accuracy and shorter cycle times.
Phone and Postal Mail
Do you really know your partner’s capabilities? It is possible they are already doing business electronically? Are they are sending you electronic purchase orders, but you are mailing them invoices?
To be successful in B2B, you have to find a service provider that offers trading partner survey services, and that can identify capabilities and opportunities with your trading partners.
Best practices for success
- Start with the smallest change that your customer can make to a behavior or process, that will help you meet your goals of automation.
- Know what’s in it for them. Offer a compelling benefit that answers “why should I change the way I do business?”
- Educate your customers. Let them know what you want to do, why you want to do it, and how it will benefit them.
- Walk them through the process. Even small changes seem larger when you are on your own.
Ask for small changes in behavior, not large ones. Technology enables small behavior changes on the customer and supplier side to feed into automated processes.
By making it as easy as possible for your trading partners, and offering them a value-driven business reason to change, you can implement automation, and make things easier for everyone.
About Sterling Commerce
Sterling Commerce helps 80% of the FORTUNE® 500 thrive in a global economy. They provide innovative solutions to process integration challenges between companies and their customers, partners, and suppliers to help them achieve higher levels of performance, and optimize their trading partner communities. Sterling Commerce is an AT&T (NYSE:T) company. Learn more at www.sterlingcommerce.com.
Get more education from Sterling Commerce on our Forum Resources Page:
- Forum Presentation: Building the ROI Case for Small Partner Enablement - Josh Hardy, Sterling Commerce
- Article by Josh Hardy, Sterling Commerce - "The True Value of eCommerce"
- Sterling Commerce B2B Whitepaper
Tips on Populating Standardized Category Codes in IDW
The December 31st deadline to populate the United Nations Standard Products and Services Code® (UNSPSC) for all products in Industry Data Warehouse (IDW) is fast approaching and we want to make sure manufacturers have all the support they need to successfully complete the project in time. The population of these standardized category codes is essential for the industry to begin utilizing and benefiting from the first Electrical Attribute Schema. Here are some FAQ’s to help you keep the project moving forward.
1. What resources are available to help me get a better understanding of the project scope or to explain its importance to senior management?
- The Electrical Attribute Schema was officially introduced in this media release
- This IDEA E-Biz Forum presentation revealed the schema to the electrical industry – Using Standards to Sell More and Make Better Buying Decisions
- This Electrical Wholesaling article explains the importance of the new schema – “ Big Schema Things”
- Past UNSPSC educational articles published by IDEA give you some history and knowledge behind it all
- The IDEA Portal contains all the documents you need to complete the project including the complete attribute schema, standardized electrical abbreviations list and the complete UNSPSC code list. All documents are located under Training>Standards>Product Identification once you log in.
- Finally, you can browse the UNSPSC website to find out how the category codes are being used in other industries
2. What field do I use to populate the UNSPSC code in IDW?
The UNSPSC codes should be populated using IDW field 5.320 via the EZview/PIPE Flat File or the EDI B1 transaction, utilizing qualifier of “NETXICA” within the LIN loop, PID04/05. This identifies the data as a UNSPSC code when it’s loaded into IDW. The qualifier code is from the IDEA Electrical Industry Code Table.
3. I don’t have the in-house resources to finish this project in time. What type of support is available to me?
IDEA is offering an assistance program to guide manufacturers through the UNSPSC assignment and ensure all companies successfully meet the December 31st deadline.
The assistance program will help you populate the correct category code for each of your products in IDW. The service is available in varying levels of support, from guiding and consulting to outsourcing the project entirely. Please contact your account manager to request assistance.
4. Do I have to populate the UNSPSC codes for non-electrical products in IDW? If so, how can I find out which ones to use?
Yes, non-electrical product code reference can be found on the UNSPSC code list on the IDEA Portal as well.
Please contact your account manager if you have any further questions or email if you are unsure of your account manager contact.
Watch the 2009 Forum Photo Slideshow
The IDEA E-Biz Forum 2009 photo slideshow is now available on the Forum resources page. Check out some of the best moments from the event and download your favorite pictures. The slideshow accompanies the Forum presentation documents and reviews.
The photo gallery categories include:
- Hotel and Registration
- General Sessions
- Breakout Sessions
- Tech Center
- Richard Buzun Award
- Networking Events
Please contact if you have photos you’d like to share.
Tags for this post: ebiz forum
IDX Hot Fact: A New Way to Search for B2B Documents
As an advanced search feature on the Industry Data Exchange (IDX) Tracker, the new ‘Transport’ option field allows users to define search criteria based upon transport type through IDX. The function is most useful to customers who maintain multiple communication pipelines (protocols) to IDX.
The entire range of valid in/out transport values available are: CYCLONE (AS1 & AS2), Cleo, FTP, VALICERT (Secure Transport), VAN, WEBFORMS and EDIINT3 (see screen shot below for the location of the new search field).
Here are a few scenerios on how this new search option can be used to meet your business objectives:
- If your company receives data through both AS2 and FTP, you can input an ‘In Transport’ value of “FTP”, and only view data routing through your FTP connection as opposed to AS2. This helps make it easy to filter a search based upon the communication protocol, thereby saving time and increasing efficiency.
- If your company periodically performs failover/recovery testing and has IDX move your EDI ID’s from AS2 (CYCLONE) to Secure Transport (VALICERT). The 'Transport' option gives you the ability to search for traffic based on the method used to route documents through the network.
- If your company maintains ‘mailboxes’ (connections to IDX) on two different IDX servers using unique transport names, you can combine the ID’s to appear under a singular document tracker login then sub-sort data going to one IDX server vs the other using the In/Out Transport search to facilitate the request.