What is B2B Integration? Types, Processes, and Challenges

B2B integration is the automated communication between two or more businesses or trading partners. Modern B2B integration technology helps organizations seamlessly work with partners, manage workflows, send and translate files and documents, and meet customer expectations – all while meeting strict security and compliance protocols.

Today’s expanded digital footprint and globally distributed operations make internal and external coordination difficult. Customers are more demanding, supply chains are more complex, and interoperability standards are stricter than ever. Modern business partnerships demand:

• Rapid, reliable communication,
• More workflow transparency and security, and
• More agile, scalable workflows.

 To keep pace with the change of pandemic-era digital transformation, organizations are re-examining how they manage B2B workflows – and the technologies they leverage to do so.

Let’s explore why B2B integration matters, how it is changing, and what innovation in this space can do to keep your business moving forward.

What is B2B integration?

Manual processing is slow, cumbersome, prone to error, and is no longer sustainable in today’s business environment. Speed and accuracy are paramount when fulfilling requests, sending invoices, tracking shipments, and more. B2B integration technology helps organizations streamline and automate that process, allowing them to operate at the speed of modern business.

B2B integration is leveraged across every industry, including healthcare, manufacturing, retail, and logistics. For example, retailers can onboard suppliers, automate purchase order processing and invoicing, and maintain real-time visibility into order fulfillment and inventory. Healthcare organizations can send and receive insurance documents, process patient files, and more while meeting strict interoperability and compliance requirements.

The best B2B integration platforms offer businesses a chance to automate and streamline a wide range of workflows and integrations, with support for:

• Electronic Data Interchange (EDI)
  EDI is the exchange of business documents such as invoices, purchase orders, and shipping notices via secure, standard file transmission protocols.  Manual methods of processing such documents are inefficient and error-prone. Automated EDI technology allows for the instant, secure transfer and translation of EDI documents into universally accepted standards, like X12, EDIFACT, HL7, and more.

• Managed File Transfer (MFT)
  MFT technology allows for the secure, automated transfer of sensitive data via a central location, giving organizations the opportunity to share high volumes of data with their trading partners while maintaining control and visibility.

• API and Application Integration
  API and application integration technology provides end-to-end connectivity between data, applications, services, and systems. To communicate with trading partners and customers, organizations must be able to connect internal and external systems such as CRMs, ERPs, analytics platforms, accounting tools, and more.

The 2 types of B2B integration

While this article describes B2B integration in relation to the data involved, it’s important to note that the process automation is also a key element to B2B integration. Below are the two types of B2B integration, or the two elements of B2B integration.

1. Data integration: Data integration is the process of uniting data from multiple sources into a single source of information. In the B2B process, it involves the exchange of files and documents between external applications and the transformation to convert data into a format that is readable by each system.
2. Process integration/automation: Process integration, or process automation, involves the connecting and streamlining of tasks involved in B2B collaboration. These tasks include partner onboarding, dispute resolution, chargeback situations, and other tasks that might require collaboration or a human touch.

B2B integration process

There are four main steps involved in the B2B integration process. These include:

1. Establish connectivity

   To effectively communicate and exchange information, both parties must establish a communication protocol. Trading partners often dictate these protocols to follow to send messages and comply with their standards. These include AS2, FTP, SFTP, OFTP, and more.

2. Exchange data

   EDI, APIs, or other standard data models are used to exchange critical business documents like purchase orders, invoices, claims, shipment notices, and load tenders.

3. Transform & map data

   Data communicated via EDI or other B2B protocols may need to be converted into different formats to integrate with your internal data ecosystem. Fully end-to-end B2B automation includes transforming & mapping EDI documents into data structures that fit specific databases or back-end systems.

4. Integrate data

   After transforming EDI documents into appropriate data structures, end-to-end B2B automation involves integrating this data into internal data ecosystems. This includes ERP systems, CRM applications, accounting platforms, tabular databases, flat files, and more.

The challenges of legacy B2B integration

While B2B integration is undeniably vital to business operations, the technology has not been the subject of much innovation in recent years. Organizations tend to rely on their legacy B2B integration tools to “do the job,” rather than investing in modern platforms that will help scale and grow their B2B processes.

But while legacy integration systems might be adequate now, organizations may experience friction as rising challenges outgrow older solutions.

1. B2B partnerships are growing: According to Gartner, at least 70% of enterprise marketplaces launched will serve B2B transactions by 2023. With this growth comes new challenges, especially around governance and interoperability requirements.
2. Most B2B integration platforms are not comprehensive: Gartner also reports that through 2024, 75% of midsize to large enterprises will leverage at least two different integration tool categories to strategically address most of their pervasive integration needs. In other words, organizations must use and maintain multiple solutions to communicate with partners.
3. B2B integrations are complicated: Common B2B integration issues arise from lack of basic user-friendliness and accessibility within legacy tooling. Whether an organization is leveraging a heavyweight B2B tool or building its own custom solution, it relies on IT involvement to introduce and sustain partnerships, improve operations, and scale the business. Coordinating legacy systems and custom builds through IT takes time resources, and budget better spent elsewhere.
4. B2B integration methods are stagnant: EDI and B2B integration technology are workhorses within the business. But as digital transformation has become the standard and companies move to the cloud, organizations are finding the innovation around these legacy technologies to be slow, and modernization efforts stagnant. Simple features like user-friendliness, extensibility, and connectivity are necessary to move B2B operations forward.
5. B2B solutions lack extensibility: Legacy B2B solutions tend to be monolithic, opaque systems that demand full control over every aspect of the data exchange process. As a result, evolving or upgrading your connectivity technology may require an overhaul of your entire B2B infrastructure. Without the appropriate emphasis on extensibility, legacy B2B platforms limit an organization's ability to leverage newly-developed tools and protocols, stunting the growth of their B2B ecosystem.

In essence, organizations need a modern B2B integration solution that allows them to take control of their workflows. Modern B2B technology should help:

• Automate manual work,
• Simplify technical barriers to mapping and designing workflows,
• Easily connect to any system, data source, and application,
• Accelerate time to value,
• And streamline the way businesses communicate.

Modernize your B2B integrations

Why modernize your B2B integration platform? It comes down to having a solid foundation and full visibility into workflows in order to support a growing business in a fast-paced world. Modern approaches to B2B integration allow organizations to respond more quickly to customer demands, partner needs, and ever-changing innovations.

Think about today’s retail processes, for instance. As e-commerce becomes more pervasive, customers expect quick, seamless, and personalized buying experiences from online retailers. Failure to meet and exceed those expectations leads to lost customers, damaged reputation, and decreased revenue. Retailers are held to higher standards, and therefore must limit the time and labor it takes to take and fulfill orders, communicate with suppliers, track payments, and more.

In a few ways, today’s B2B integration goals mirror those of early digital transformation efforts, including:

• Automate to replace manual information processing, as it is sluggish, wasteful, and error-prone.
• Standardize to ensure files and processes connect and are processed consistently across disparate systems.
• Offload low-level, repetitive administrative tasks to reduce wasted time, money, and resources.

Innovation in the B2B integration space is vital, and organizations can now take advantage of modern B2B platforms like CData Arc to:

1. Simplify technical work

   Modern B2B integration platforms simplify the process of connecting systems, allowing business users to leverage a no-code, IT-approved toolbox to map, build, and maintain custom integrations themselves. Developers can then refocus their time and energy towards more critical projects, while business users take control of B2B interactions.
   
   

2. Connect anything

   These platforms should easily connect to hundreds of the business applications organizations and their partners use every day, including CRM, ERP, marketing and accounting applications, as well as databases, payment systems, and much more. By providing a quick, simple way to connect each new application or system as it’s added to an organization’s stack, modern B2B integration platforms save time and headaches on the path to digital transformation.
   
   

3. Implement and iterate in minutes

   On-premises B2B integration systems can be hard to sustain when you add installation and maintenance cycles into your workloads. For those that want to offload these duties, B2B integration platforms are now offered via cloud-hosted services. Hardware maintenance, platform installation, backups, and security patching are all handled by the service provider — while you gain easier integration into a growing suite of cloud-native applications and systems.

B2B integration examples

Below are just a few examples of how different industries can benefit from automating their B2B integration processes.

• Retail & e-commerce

Connect retail storefronts and e-commerce apps like Shopify and Amazon Seller Central with back-end processes like fulfillment, inventory management, and accounting to ensure full end-to-end automation of your order processing. Streamline communication with suppliers and logistics providers to help satisfy and deliver orders without any manual slowdown or chargebacks.

• Supply chain & logistics

Manufacturers and suppliers can leverage B2B integration tools to automate purchase orders and invoices, inventory management, and more. Third-party logistics providers can streamline warehousing, tracking & delivery, and managing shipments.

• Healthcare

  • Providers: Healthcare providers can securely submit electronic claims to insurers, integrate with billing systems, and simplify HIPAA compliance by automating EDI processes.
  • Insurers: Healthcare insurance providers can connect with hospitals and onboard providers into their EDI network to reduce errors and streamline electronic billing.
  • Pharmaceuticals: Pharmaceutical organizations can fast-track the drug trial approval process by automating their FDA ESG submissions.

How Parts Authority eliminated IT bottlenecks with user-friendly EDI workflows

Major auto parts distributor Parts Authority sells and supplies over 3 million unique parts to repair shops, auto parts stores, and fleets across the United States. Previously, they were required to sink developer time and resources into creating new processes to map and translate EDI documents that met each unique customer's needs. They needed a simple, repeatable, and scalable EDI solution, and that’s where CData Arc came in.

CData Arc eliminated the need for developer-heavy B2B workflow design, replacing custom-coded B2B integrations with a user-friendly no-code interface to map and build EDI integrations.

“Previously, we would get a team of developers, design an application, and build it to fix the problem or provide the solution. With CData Arc we just get in and connect with our various systems,” said Tyson McPherson, Development Manager at Parts Authority. “Now, whatever a customer brings to us, we can fit it in our Arc solution and we don’t have to do the development work that we’ve done in the past.”

“I liked the way the application was set up,” he continued. “It’s so simple – we can go into each workspace, see the available connectors, and just work through connecting everything visually. The whole process takes us minutes.”

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Learn what you can accomplish with better B2B integration

As organizations face changing digital landscapes and increasing customer expectations, they should consider what changes they can make to keep their business agile.

If you’re ready to enhance your trading partnerships with modern B2B integration solutions, get started with a free CData Arc trial today!