The majority of supply chain strategies originate from earlier times when the business environment was more stable. Highly competent management teams could easily roll through the punches and still focus their supply chain strategies on value generation and cost reduction. They did so by reducing inventories through the integration of new partners into an ecosystem, implementing lean principles to their data-driven processes, rationalizing the supplier base etc.
Now, the situation has changed with most business becoming digital. The pressure to accelerate movement toward digital-based transformation and more digital-enabled processes has increased by leaps and bounds. And so, organizations need to transform the supply chain to improve their ease of doing business.
For digital technologies to create new supply chain opportunities, organizations need to reimagine their approach of integrating partners or customers and ultimately streamlining value streams. A new concept to consider is often described as Hybrid Integration that involves the integration of B2B network via APIs with existing Cloud and legacy backbone processes and systems.
Whether it’s supporting new models for businesses or creating a broader and more responsive supply network or more real-time connections to processes and physical assets (enabled by the Internet of Things), the objective of LOBs and associated functions is often to accelerate movement toward digital-based transformation.
The reality, on the contrary, can present itself as legacy-based business backbone systems that are increasingly augmented by Cloud-based networks; they are responsible for connecting disparate supply and demand-based processes and drive decision-making. Another reality is the existence of a disconnect between partners including digital and non-digital ones.
Siloed B2B connections is another reality that needs to be handled correctly. Business processes from supply planning to customer fulfilment provide an existing footprint of multiple EDI messaging translators, B2B gateways, or VAN. The increased cybersecurity adds to the challenge further. It introduces vulnerability across various networks and regulatory pressures for data security and privacy such as the European Union’s GDPR directive along with ISO 27001.
While each network streamlines different processes, the data produced is required to support more intelligent or digital-based analysis and decision-making. The challenge introduced is an explosion of integration points, which needs to be managed and secured by businesses. A secure data exchange backbone is needed to enable organizations to deliver predictive based insights for delightful customer experiences and faster value generation. Ultimately, the need translates to reinforce interoperability between on-premise legacy systems and cloud-based systems.
Hybrid integration enables businesses to connect data, applications, business partners etc. across on-premises systems and cloud-based ones. The complete concept is indeed broader than that – addressing integration personas, domains, endpoints, and deployment models. This is a definition championed by Gartner.
Hybrid integration powered with self-serve capabilities allows non-technical business users to integrate customer data (whether residing in on-premise or cloud) while freeing IT to focus on governance and innovation. It helps companies supercharge their supply chain performance to deliver faster value.
Businesses can then be empowered to build integrations between:
Personas: Integration development isn’t confined to IT. Ad-hoc developers and business users, aka citizen integrators, are being asked to develop integrations instead of putting in a ticket with IT.
Domains: There is no doubt that applications need to be integrated. But integration needs to cut across B2B partners, data, and processes.
Endpoints: The sources and devices that have to be integrated are moving further from the core. Quite a few years before, it was restricted to only on-premise. Now, that has expanded to the Cloud and mobile devices, IoT devices.
Deployment Models: Integration is expanding beyond on-premises and Cloud environments. Embedded models are prevalent that needs underlying integrations to satisfy their end-user requirements.
In order to compete in this disruptive environment, businesses should consider leveraging Hybrid Integration to connect with suppliers and customers. Not only can that help companies improve business processes (reinforcing agility, lowering cost, and accelerating ROI) but also build the foundation toward broader digital-based business transformation.