In my previous post I discussed the cloud in terms of its most salient benefit: Information sharing.
There’s no question that sharing data will improve relationships with customers and suppliers. As companies go from the cost-cutting that was prominent in the recession to growth, data sharing should be the main driver to opening new markets, winning new customers and expediting the process from materials delivery to payment.
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Data Sharing Before and After the Sale
Yet, data sharing of any kind among customers and suppliers is low, especially at points before and after the sale.
In an Information Week article called Share!, IW’s Michael Healy talks about a recent survey that showed that barely half of companies even share order status with customers.
“FedEx and UPS make package tracking so simple, it’s easy to take it for granted, Healey writes. “Almost every company we surveyed shares data with someone. Most (74%) share data with customers while 62% share with suppliers. Almost half of the respondents are required to share with third parties, most government agencies.”
But Healey found a wide disparity in data sharing strategies. Only a fourth of the companies surveyed considered it important enough to be a priority. Some build connections on request by another quarter admit they resist data sharing.
So, what’s the problem?
Healey does cite the classic culprit as budget limitations followed by the usual complaints about multiple sets of tools and the care and feeding required by legacy connections. But there was something deeper.
Integration Taking Months, Not Days
Healey found that while sales, manufacturing and merchandising tend to drive the decision to share data, the relationship with IT is contentious and creating such integrations end up taking months, not days.
“The company does really care about sharing data,” said one senior developer in the story. “There’s usually an initial scream to get the integration project done quickly to meet a short-term target, then it’s never looked at again.”
Healy thinks IT needs to break out of the reactive mode and become more proactive. One example given was a distributor who was trying to figure out a way to cut costs, especially in a paper environment. IT’s idea was to build a sales campaign to push all forms of streamlined invoicing, including integrated data and electronic invoicing.
The result was a 20% increase in customers switching from paper, saving a few thousand dollars a month and two full head counts in terms of man hours.
Fewer Than 1,000 Connections
Still, most companies do not move fast enough. These are some scary figures: When asked how long it would take their teams to establish a new data link with a customer or supplier when both have compatible connections, only 23% could do it in less than week. Another 41% could get it done in month while others just “added it to a list.” Yikes! That’s for “compatible” connections. Almost 83% of companies surveyed have fewer than 1,000 connections.
Healey notes that a mid-size $200 million company that has an average order size of $1,000 would likely have more than 20,000 clients and 2,000 to 5,000 suppliers. A larger enterprise is likely to have more than 100,000 possible connections.
Where should your company be, he asks? Good question.
Next: EDI Standards
