Thinkronization Newsletter - April 2010
Good day! Our last edition of “Thinkronization” started with well wishes for the New Year, and now we are nearly one third of the way through 2010. With the passage of time has come continued changes in the world, and particularly in the business and data integration space. Our expectation is that this publication helps professionals focused on the integration of systems and electronic collaboration with business partners keep up with the pace of change. As always, it contains information such as news, articles, research, trends, consulting service, and placement pieces, related to Business-to-Business Integration (B2Bi), Enterprise Application Integration (EAI), and Data Integration (DI).
Concerning The Pace Of Change
In the two months since our last newsletter was published, a significant piece of legislation passed that stands to impact most every person and business in America. The Health Care Reform Law has business and data integration implications that, while not completely understood by most at this point, will involve intense integration requirements. Integration requirements for those impacted include a significant revamp to HIPAA transaction standards, the creation of new document standards, the creation of a unique health plan identification number, electronic claim payment/remittance, and utilization of electronic medical records, to name just a few. Another unknown is the integration impact to large corporations that are, and hope to, remain self insured.
Regardless of your favor or distain for this law, it is likely it will impact your organization in some way. We’ll have more information about the integration impact of this law over the course of the next few editions.
What About Electronic Payments?
In our Blog Part 1 and 2 of “2010 Holds Opportunity in Supplier Enablement”, I wrote about the opportunity to increase efficiency and reduce cost in supplier enablement given the low utilization rate of electronic requisition-to-order throughout the North American supply chain. The Aberdeen research source for those pieces not only dealt with the order cycle but paper vs. electronic payment processes.
In a former life I was a Banking Financial EDI and ACH product manager and was curious about why such a small percentage of companies that were integrated with suppliers electronically, did not do electronic payments as well. After 15 years of integration consulting for hundreds of clients, I still wonder that same thing. Are they not prevalent due to the float game, cash flow control, internal cost of capital, Check 21, awareness of the options in Financial EDI?
Aberdeen research estimates that in North America it costs 35.5% less to make supplier payments electronically versus paper payment authorization, remittance, and check. According to NACHA, electronic corporate trade payments are on the rise. Also, corporations are starting to look at the integration of the procurement and payment functions. As I look at those we have served in the past, many have not chosen to pursue electronic payment, though they have infrastructure and connectivity for it.
Let’s apply some math to the cost savings opportunity. If an organization has 1000 suppliers with an average of 8 orders/mo, what are the economics behind an initiative to enable all these suppliers for electronic payment?
1000 suppliers x 8 orders X 12 months X $3.29 - electronic payment savings = $315,840.
The savings are big. This needs to be compared with cost of capital and how many invoice payments your organization processes a month. However, these savings are real and a low hanging fruit situation for all those you already trade with electronically.
Are you looking for efficiency opportunities? Supplier payments are a place to start.
Integration Competency Centers (ICC)
We attended the Informatica 9 World Tour event in March and were introduced to the idea of competency centers, AKA centers of excellence, as related specifically to integration. Informatica has done a lot of work on the data integration ICC concept and in fact have evolved their product(s) in line with this thinking. This concept is a more formal and complete one than in my blog article, “The Evolution and Convergence of EDI and EAI”. And it should be since the ICC notion is based on the book Integration Competency Center: An Implementation Methodology, written by David Lyle, VP Product Strategy at Informatica, and John Schmidt, President Worldwide Integration at Integration Consortium.
Forming an ICC involves reorganizing integration resources, framework processes, and integration technology, into one of four different consolidated models. This creates integration efficiency and effectiveness across the organization by grouping integration professionals and processes. This approach also provides opportunity to consolidate integration tools and eliminate duplicate functionality that exists across EDI, EAI, ETL, DI, and BI software.
We believe that as evolution in integration tools continues, more IT departments will move towards reorganizing integration in this manner. There is more to come on the ICC concept in future editions of “Thinkronization”. For now, if you are sufficiently intrigued, you can find out more about ICCs from the Integration Competency Center: An Implementation Methodology book excerpt.
Sterling Commerce™ Customer Connection 2010
The Sterling Commerce Customer Connection 2010 conference for REMEDI was in a word, fantastic. We learned a lot in the customer sessions. In partner sessions we had a chance to meet and talk with the executive team and learn about future directions, which includes the heightened involvement of partners. Highlighted in the B2B Integration tool category were new mobile and community management solutions which stand to extend infrastructure monitoring and speed/extend implementation with the business network. And lastly, we had the chance to engage with customers, prospects, and partners on a personal and business level.
Overall the experience at the conference will definitely help us in the advisory roll we play with clients, and in “connecting, communicating, and collaborating”.
The Integration Services “New Normal”?
With U.S. unemployment at 9.7% and based on a steady increase in demand for integration resources over the last 12 months, maybe high unemployment is the new normal, or maybe not? In any event, check out what staffing experts are saying about the contingent workforce in Contract Staffing - Where’s It Headed?
Is This Recovery Similar Or Different To The 1980s?
While claims are that we are in recovery, so far it appears somewhat jobless. Some recoveries of the past have been long and arduous; however, recovery in the 1980s was a quick bounce back to full employment. Does this indicate that in the 1980s, and arguably today, companies cut too close to the bone? What will this one look like? Regardless of our road to recovery, a safer approach to hiring full time staff continues to emerge. A contract to hire or “try before you buy” approach has become increasingly popular. More details on C2H in the article C2H FAQ - Exploring Contract To Hire.
UConnect 2010
JW Marriott San Antonio Hill Country Resort
June 7-10, 2010
For those attending the U Connect 2010 conference in San Antonio, the event is just around the corner. While not exhibiting this year, we are excited to be attending the conference. Our goal in attending is to learn more in order to operate in an advisory capacity for our clients and to help them integrate more effectively up and down the supply chain.
Give us a shout if you happen to be attending, we would enjoy meeting with you at the conference.
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