GXS Insights

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• Insights Index
• 1st Edition: Inside SaaS 2.0
• 2nd Edition: Navigating Cross Border Business Boundaries
• 3rd Edition: How to Increase ERP Success with B2B Integration
• 4th Edition: Enhancing Customer-Centric Supply Chains

6. Outsourcing

For the majority of organisations, trying to manage a Pan-European trading structure internally is just not financially possible. The cost of following the changing legal frameworks, ensuring that chosen partners are trustworthy and can work to quality and supply chain levels as well as maintaining language capabilities is just an impossible task.

However, Quocirca believes that organisations should only concentrate on their core competencies – which, for the majority, does not include their IT systems, contract management, language capabilities or financial value chains. For a manufacturer, it should be around focusing on design and development. For a retailer, it should be concentrating on sales.

Pan-European trade requires distinct and in-depth skills that even large organisations struggle to maintain. However, there are companies on the market who provide the main capabilities that Quocirca believes organisations should be looking for to enable access to the European markets.

Within these capabilities, the main one is providing access to the system. As an organisation, creating an environment that can support as many standards for EDI as possible is one thing – providing the means for a large number of possible partners to participate is another. An external provider will be able to take any formal EDI format and many less formal data structures (such as Excel comma delimited format and email structured forms) and provide a common output format that fits the requirements of the recipient. Through this means, the supply chain remains open with no company being forced to invest in a specific EDI format that may only be supported by a single member of their own value chain. Each participant can continue working as they see fit, yet transactions can be suitably automated up and down the value chain.

Many of Europe’s CSME organisations still have minimal connection capabilities beyond basic internet connectivity. However, those vendors dedicated to providing outsourced solutions for B2B transactional management tend to provide easy access via standard internet on-ramps, enabling organisations to participate in fully-electronic solutions within minutes. When compared to older-style dedicated EDI solutions, where dedicated connectivity or fully-protected virtual private networks (VPNs) were required, this now removes the main barrier for full electronic transactions to be carried out.

Once a means of connecting the various constituents in the value chain has been created, we then need to look at how items are requested and offered. Here, a fully managed common catalogue of supplies needs to be provided. Through this, suppliers can ensure that their products are always up to date and are available to possible customers at all times. When combined with inventory details, this means that prospects can more rapidly make decisions and arrange deals.

Alongside this is the capability to present information in the reader’s language. Some of the providers in this space offer the capability for the translation of catalogue information, ensuring that this does not present a hurdle between supplier and customer.

Also, this translation capability should go further, providing the capability to translate documents such as RFIs, RFPs, RFQs and contracts in both directions.

An external supplier should also be able to deal with all the paperwork that will be required for the logistics involved in the supply chain – in the required languages and dealing with all the cross-border possibilities that the logistics companies involved may find.

As an external provider will be dealing with a larger group of suppliers and customers than any single organisation would be doing, it should also be capable of providing a collaborative group environment where information can be exchanged on how other organisations perform compared to their promises. This can provide important information enabling organisations to make better-informed decisions on whom they should trust.

Also, an external provider should be able to manage the payment chain, providing the capabilities to enact transfers of money between financial institutions, across multiple currencies.

An outsourced service provider in this space will also be able to provide services for carrying out standard auctions, reverse auctions and many will provide Dutch auction capabilities, further enabling the optimisation of revenue and spend on transactions.

Additionally, an external provider should have enhanced security capabilities, be able to ensure that all information is managed in a manner which offers the maximum uptime, should be able to manage response times and provide multi-lingual human support for the constituents of the value chain.

Through the use of an external B2B management company, organisations can be freed up to concentrate on their core competencies – and so be more effective and competitive in their businesses. An external provider opens up new reach for the organisation, creating opportunities for B2B sales and supplies that can provide new revenue streams and cost savings at minimum risk.