Two thirds of UK engineering sector are bottom tier B2B integration performers
23 November 2012
The engineering & construction sector is ‘significantly behind’ in terms of B2B integration, compared to retail, financial services, manufacturing, and wholesale/distribution sectors.
Out of a recent survey of 120 mid-to large-sized companies in the UK, the majority (67%) of the 23 engineering & construction firms which responded are bottom tier B2B integration performers* (compared to 20% mid-tier and 13% top tier). Those in the top tier are three times more likely to be doing well financially and four times as likely to be growing, than the bottom tier. The survey, by IT Analysts Freeform Dynamics, was commissioned by Liaison Technologies, a data integration specialist.
B2B integration is an essential capability for all UK organisations in an increasingly connected and interdependent global economy. In the survey overall survey, the majority (60%) of all low performing respondents last addressed their B2B integration solution over six to ten years ago, compared to the high performers, which are currently in the process of a B2B initiative. Worryingly, there is a small portion (4%) of bottom tier performers, which believe they are ‘a bit ahead’ in relation to the industry as a whole.
Despite this, the majority (81%) of bottom tier respondents believe that a B2B initiative would make a significant or compelling difference in terms of operational costs, but only 13% plan to drive improvement.
One of the main difficulties in achieving better B2B integration, which is mirrored across all sectors, is lack of clear ownership and support at management level. Poor internal systems and information can seriously undermine performance.
Automating the way a business connects, communicates and transacts across extensive global supply and demand chains can have a massive impact on the overall cost of doing business. It comes as no surprise that that top tier performers are three times more likely to be doing well financially than the bottom tier, and four times as likely to be growing.
According to Dale Vile, research director at Freeform Dynamics and regular commentator on B2B integration issues, the findings shine the spotlight on a fundamental misconception about B2B integration. He said: “Decades of relying on bespoke solutions have conditioned many to accept high costs and inflexibility as norm, especially when large managed service firms are in the mix. It’s clear from our study that the shortcomings of B2B solution providers have played a significant part in perpetuating the low levels of integration we see among UK businesses.”
Mikko Soirola (pictured), vice president of Liaison Technologies, believes that the subject of B2B integration needs to be a top focus for financial institutions. He said: “Poor IT integration has really hit the headlines recently and what is surprising is that these incidences will become a lot more common if people don’t address the issue. Too many financial institutions are becoming complacent when it comes to improving their integration with partners and suppliers despite the performance improvements available.
"There is a huge question mark over who takes responsibility for data in many organisations, and the RBS integration failure is a classic example of where such complacency can have a serious impact on both profitability and company reputation – a setback which companies simply cannot afford to put themselves in at the moment. But, all too often we have to pick up the pieces after being called in following unsatisfactory implementations.
“Because of the benefits it can deliver when done correctly, I feel that B2B integration should be viewed as one of the most profitable strategic initiatives for financial institutions rather than an inconvenient cost. UK firms that wish to remain competitive should make an honest assessment of their current B2B capabilities and, if they are under-performing or accepting sub-standard solutions, should refuse mediocrity and raise their expectancies. The specialists are out there and the market may be pleasantly surprised by both expertise and costs.”
The full findings of the white paper ‘Effective B2B Integration: Challenges, Practicalities and keys to success’ is available here.
*Index calculated from overall averages, then sample divided into equal thirds: top tier performers, middle tier performers, and bottom tier performers