Minimize B2B Friction with Straight-through Processing
Posted by Mike Canniff on March 23, 2011
In this post, I continue with some key development issues building on the integration design patterns previously discussed. Beyond the basic requirement of connecting two applications or enterprises, integration scenarios require error management, exception handling and monitoring functionality. A main goal of integrating B2B processes is to minimize “friction” in handling the data – in other words – achieving straight through processing of the data.
When Things Go Bad:
- In an ideal world, all B2B products would automatically connect to any application, transform all data to a perfect match, and never lose any data. We don’t live in this perfect world, so integration architects need to plan for errors and exceptions.
- I differentiate these two situations :
- A transaction may be in error when a certain transformation fails and no further processing can be done. For example, a required data element needed to import data is missing.
- An exception, on the other hand, may be the result of a business inadequacy. For example, a sales order may place a demand on inventory that is not available.
- In either case, the integration instance has incurred friction. Manual intervention will need to correct the in-error transaction. This results in lower efficiency/quality for processing transactions.
- So a B2B product needs to provide excellent monitoring that tracks the performance of successful transactions, leaves an audit trail, and highlights in-error conditions. Ideally, the enterprise’s ERP system should report functional exceptions to the B2B software to update the integration log. Lastly, B2B monitoring needs to have a robust alert system with appropriate escalation work flow to notify the correct support personnel of any errors.
Straight Through Processing (STP):
- This concept is about removing manual intervention as much as possible in a business process. One needs to think about the process from end to end. For example, in advanced MRP implementations, inventory levels trigger re-order points which result in automatic replenishment requests to vendors. These purchase orders are then automatically transmitted to the vendor. Upon receipt, the data is transformed and loaded into the supplier’s ERP application. This will trigger a fulfillment sales order that is picked and shipped automatically. An advanced ship noticed is then triggered back to the manufacturer detailing the shipment date and quantities.
- If there is close to 100% automated handling in this scenario, overall turnaround time can be trimmed by days in the process.
A healthy amount of Total Quality Management principles can be applied to integration processing. The ultimate goal would be to achieve perfect order processing. B2B software can assist in this process by providing processing metrics – things such as time outs, connection errors, data quality measurements, and exception handling reports. Minimizing these issues will be key to developing best in class integration practices.
Tags: B2B Integration, Business Process Integration, ERP integration, integration design, Straight through processing, supply chain monitoring
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