Businesses need to automate, optimize, and integrate their processes in order to collaborate and communicate effectively with their customers, partners, and suppliers. To do so, an effective B2B integration strategy must be in place.
But before we get to it, it’s necessary to understand B2B integration inside out, and this guide serves to do exactly that.
It discusses how B2B integration works, its types, its implementation patterns, and how it can improve your revenue-directed business processes.
It also sheds light on Service Integration and Management (SIAM) in the context of B2B integration and how it can help organizations bring value to their customers.
So let’s get started.
What is B2B Integration?
B2B integration (business-to-business integration) is the process of connecting two or more businesses to create a symbiotic relationship between them.
These organizations could be suppliers, partners, vendors, or customers. It also means that every such organization has its own set of applications and systems (ERP, CRM, SCM, and so on).
And the problem here is that these systems are not meant to cooperate with one another inherently.
So when all these different systems play different roles in a business ecosystem, trying to exchange information with each other, the different formats, protocols, technologies, and deployment models don’t allow for information to be shared seamlessly.
This is where B2B integration comes into the picture.
It helps these disparate systems, which don’t possess the inherent technology to communicate. It also enables companies to exchange business-critical information within and across their borders automatically and in real-time as well.
Business-to-business integration also involves automation and optimization of business processes to help them improve their external relationships with their suppliers or trading partners and integrate processes to support these relationships.
Simply put, B2B is a cross-company or cross-platform integration strategy that companies adopt to enable them to collaborate, communicate, and trade more effectively with third-party organizations.
Let us see how the core B2B integration technologies have evolved.
The Evolution of B2B Technologies
The first attempt at B2B integration can be found in EDI (electronic data interchange), which emerged in the 1960s.
EDI enabled businesses to exchange files or information electronically. So instead of sending back and forth pieces of paper, you could send documents between companies with the help of EDI Software.
The EDI software allowed companies to bypass manual processes and send documents automatically using a standard EDI format. This reduced human errors.
However, this setup was very costly to implement; hence, it could not be adopted by small or medium-sized businesses since they simply could not afford it.
The rise of the internet in the 1990s provided an exciting opportunity to exchange information for small and medium-sized businesses.
Out of this need, e-marketplaces or e-hubs came into existence. This low-cost option enabled all businesses to communicate over the Internet. Interoperability increased, and companies found themselves collaborating more widely and openly.
As the internet matured, the B2B technology paradigm fundamentally shifted. Protocols like HTTP, FTP, and SMTP opened up new avenues for integrating applications over the Internet.
During this time, XML became a universal standard for representing and exchanging structured data that was independent of any programming language, software platform, or hardware. Its popularity increased, and it soon came to be used in EDI exchanges as well.
XML also led to the emergence of web services—methods for integrating programs through standard XML technologies using unified and open interfaces called application programming interfaces (APIs).
Through web services, communication is possible over company intranets, extranets, and the Internet. Since they are platform-independent, they have helped reduce integration problems between different systems to a large extent.
To gain a little more insight into what benefits an organization can gain from a B2B integration, let’s delve into it a little deeper in the coming section.
How Does B2B Integration Work?
B2B Integration involves pulling information from source systems or applications and transferring/ transforming it onto target systems. These systems can be internal within the company or can be external systems outside the company’s borders, likely of their trading partners, customers, or suppliers.
To lay the groundwork for the integration process, the following are the core B2B integration steps.
Step 1: Decide Who to Integrate With
This involves making decisions about which trading partners/ suppliers/ vendors/ customers you want to integrate with.
It means identifying the systems or applications that these companies use. The network layouts and APIs provided by their applications must be taken into account before proceeding.
Deciding on the type of communication between integrating applications and systems is also necessary.
For synchronous communications, like payment gateways, the sender application waits for a response from the receiver application and doesn’t proceed until it receives one. Here, communication timeouts are a significant bottleneck.
But for asynchronous communication, the sender application proceeds and doesn’t wait for a response from the receiver application. This can be used when there is a simple purchase order receipt that needs to be transferred across systems. So there is no dependency between them.
Step 2: Pull Data From The Source System
This step involves pulling data from source applications. This data can be gathered through APIs or web services.
The way this data is extracted depends on the deployment model of the integrating systems. The data can be as simple as information about a ticket raised by a customer, or as complex and important as monthly sales figures.
Step 3: Decide on The Data You Want to Exchange
Choose what documents you want to exchange and their formats in terms of B2B specifications like EDI, EDIFACT, Custom, and so on.
In addition to documents, it’s also necessary to consider the format of the data to be exchanged.
Not all data is in the standard format, because companies generally use their own proprietary formats (like iDoc, flat files, etc). So there is a need to convert this data into standard formats like CSV, JSON, XML, etc.
Step 4: Agree on a Common Transport Protocol
The communicating parties need to agree on the transportation medium and messaging protocols (like FTP, HTTP, etc) for effective integration.
In addition, the following questions can be your drivers for this step:
- How big is the file to be transferred?
- Is real-time synchronization of data required?
- Does the information contain sensitive or critical business data?
- Does the communication need to be asynchronous or synchronous?
For the transfer of files or information between systems, security is important. So, proper encryption mechanisms for files must be in place.
Protocols like HTTPS for secure file transfers are a must. In case an unencrypted transfer between two systems needs to happen, then it must be encrypted through a VPN (Virtual Private Network).
Step 5: Make Sense of The Information in The Target System
The last step is when the data reaching the target system is converted, made readable, and absorbed into the end-to-end business process.
Sometimes companies use web portals, making the process of extraction, transformation, and ingestion of data into the business ecosystem easier.
The way data is interpreted in the target system is essential because it is crucial to show the benefits that such integration will bring.
Positive impacts on SLAs, happier customers, faster onboarding of new trading partners, and faster business approvals all indicate your integration process is right on track.
Types of B2B Integration
The classification of the types of B2B integration is tricky, as they often overlap. This is because any type of integration can always have underlying standard components or features similar to some other type.
Data Integration
Different applications existing in the B2B ecosystem cannot read and exchange data inherently. So, there is a need for special solutions to make this happen.
Depending on the solution, you need a cross-compatible solution. For instance, Salesforce data integration tools can bridge the gap between Salesforce and other applications.
Such tools enable data to be exchanged automatically between applications for different kinds of transactions, like order-to-cash, quote generation, status updates, etc.
The first option to beat the integration obstacle is to write code with a bunch of transformers to interpret data between different applications.
The other option is to convert the data being exchanged into standardized formats so that each application can read and interpret it easily. Standards like XML are popular for sharing data this way.
System Integration
This type of integration involves connecting computer systems with software applications, even integrating data from databases.
The purpose of integrating these different components is to have them act as a single system. Integration of these systems is done to carry out business tasks smoothly.
Process Integration
In this type, the logical business processes are automated by mapping them onto IT assets. Here, steps in a workflow are identified, and how different applications will play a role in interacting with and automating these steps is implemented. This leads to much faster delivery of goods or services and reduces errors of manual intervention.
Application Integration (Enterprise Application Integration)
Companies and their trading partners often use CRM, ERP systems, etc, that are hosted on-premise or as cloud apps, to address their business needs. Because these applications aren’t designed to talk to one another, there is a need for technology to do so.
Enterprise application integration (EAI) is achieved by presenting the different applications as one single application with a common UI (user interface).
For this approach, some companies choose to integrate their applications using middleware technologies for collecting data entered by users in web pages/UI, others might build point-to-point integrations, and still, others can leverage APIs and web services.
Applications when integrated can deliver a comprehensive view of business-critical processes and data, driving revenue and eliminating information silos.
Integrating applications can support different use cases in the business ecosystem—like dispute resolution and trading partner onboarding. Application integration tools can also include traceability and audit control to check if any SLAs are missed.
Cross-Company Integration
This is a spin-off of application integration, which essentially works towards integrating different applications (like issue trackers, CRM, work management systems, etc) to exchange business-critical information between them.
This information exchange is bi-directional, real-time, and automatic.
Exalate, for instance, is a cross-company integration solution that allows different work management systems (like Jira, ServiceNow, Azure DevOps, Zendesk, Salesforce, and more) to sync data with one another bi-directionally.
The type of integration that your organization should choose entirely depends on your use case. This is because every business has different demands and processes, so choosing one or a combination of these types is a decision you make with industry experts based on your specific needs.
What are the Connection Models for B2B Integration?
The integrating systems can connect with different types of connection models. The following is a brief description of the way these models are implemented.
Point-to-Point Connection
This is an ideal model for companies that don’t have complex business logic to run. It represents the integration of systems that are directly connected individually.
Point-to-point integration is traditionally EDI-based. Here, data is extracted from one system, modified into another format, and sent to the targeted system.
Its simplicity is what makes it easier to adopt. But the systems are tightly coupled so there is a dependency between them.
Hence, scaling this solution becomes difficult. Too many point-to-point connections give rise to a star/ spaghetti integration mess.
One-to-Many Connection
This multi-platform integration format involves a central entity that serves as a common user interface layer connecting other subsystems. The central entity can be called an ESB (Enterprise Service Bus).
The ESB works as a middleware that glues multiple subsystems together and acts as a messaging backbone. This model can be used for integrating complex internal systems of large companies or can be used over the cloud.
The main advantage of this type of connection is that the ESB or middleware can be easily replaced without affecting the other subsystems.
Ideagen, a GRC (governance, risk, and compliance) company, used Exalate to connect with multiple businesses and partners. This helped them increase efficiency by automating the handover process between support and development.
Hub and Spoke Connection
In this integration model, the central hub acts like a message broker through which all the requests or messages are passed. The hub has an integration engine that serves to translate messages for its spokes (multiple subsystems), helping them communicate with each other.
Here, spokes can be easily added without disturbing the architecture. However, the downside is that an additional hop in the form of a hub increases latency. This model is widely used in e-commerce and financial services.
Today, modern integration solutions and platforms make these connection models seem simple, but the reality is more complicated than that.
iPaas (Integration Platform as a Service)
iPaas or integration-as-a-service is a set of cloud-based integration solutions for building and deploying integrations in the cloud. You can integrate your systems, data, and processes as an all-inclusive package, which is accessible through common interfaces.
It has a library of pre-built connectors, which help disparate applications connect and communicate with each other, without having to worry about how they are hosted (on-premise/ cloud).
Hybrid Integration Platform (HIP)
HIP is a generic version of iPaaS offerings. A hybrid integration platform enables cloud-based solutions (public /private) or on-premise systems to integrate and work as a single unit seamlessly.
They comprise two basic components:
- Protocol connectors – to handle various protocols like HTTP, TCP, etc.
- Standard data formatter- to handle various data formats like XML, JSON, etc.
There are a lot of players in the market offering these integration services. Exalate overlaps with both HIP and iPaaS. It helps integrate different work management systems to synchronize information and data flow between them bi-directionally.
Why Do You Need B2B Integration?
We’ve discussed the evolution and types of B2B integration. Now let’s take a look at the benefits you can expect from a B2B integration.
For starters, integrating two business processes or platforms can help reduce time, cost, and errors incurred by the manual processing of information. This is crucial for time-sensitive information exchange industries like logistics, just like LF Logistics was able to manage for faster delivery and field management.
It also helps businesses increase productivity and efficiency due to the automation of key business processes. The workflows of these processes are orchestrated end-to-end to ensure smooth collaboration. Turkiye Sigorta was able to maintain a streamlined line of communication with suppliers.
With B2B integration, companies can enjoy automated movement of business-critical information or files. So there is less rework and increased cash flow. This increases the visibility and comprehensive view of revenue-driven business processes, resulting in faster decision-making.
Modern B2B integration tools provide the possibility to incorporate stringent government and industry compliance requirements through secure and enhanced data integrations. This allows managers and stakeholders to track, report, monitor, and verify the flow of information throughout the business ecosystem.
In general, B2B system integration provides a holistic global transformation for the organization brought about by the synchronization of disparate systems, data, and applications.
How Companies Handle B2B Integrations
A key component of these benefits is to connect different applications. This process often results in companies using a hotchpotch approach for implementing it. But it all boils down to building or buying the integration.
Let’s see how they go about it.
Build it in-house
This is the most obvious approach for any company. But building an integration solution requires immense technical expertise and resources, and can be time-consuming and costly.
Such a solution, though robust, is not scalable. Also, maintenance and updates of this solution put added stress on technical resources who would have been better off on other important work.
Peer-to-Peer connections
A spin-off of building the whole integration solution can be to have point-to-point connections with specific suppliers or trading partners.
This approach is simple and cost-effective upfront. But as the number of businesses or applications increases, it soon becomes a maintenance nightmare.
Using Native App Integrations
Apps built nowadays have a certain number of native integrations they already support. For example, almost every marketing automation tool today connects directly with Salesforce. The same applies to ServiceNow integrations as well as the IntegrationHub option.
This is a convenient approach as it provides the most popular use cases. But it also means that they become static after a point and lack flexibility or additional customization capabilities.
Integration Solutions Providers
The most logical outcome of all the above three possibilities is to look at integration solution providers who provide integration capabilities. These solutions provide the architecture needed to digitize information and route it through the organization’s trading ecosystems.
B2B integration platforms are an essential part of these software solutions, wherein they integrate all critical business and workflows across their partners, suppliers, and vendor systems using a single gateway.
They help extract information from source applications, process it into respective business process formats, and then send it across to the destination application using appropriate transport protocols.
You can also outsource the A-Z of your integration to these solution providers if you don’t want to deal with the integration hassle yourself.
B2B Integration Use Cases
Here’s a use case to help you understand why and how companies can really benefit from a B2B Integration.
Use Case 1: Connect Manufacturers to Suppliers
Consider an automobile manufacturer that wants to procure raw materials. For this company, this means contacting different suppliers.
This involves:
- requesting the pricing and availability of the raw material (QPA – Query for pricing and availability),
- getting quotations,
- comparing quotes and choosing a supplier,
- sending the purchase order (PO),
- making the payment and finally receiving the purchase receipt (PR).
In order to do all this, they spend months on end procuring even the most basic raw materials. It also means that there is a manual intervention for all of the above processes, leading to more delays and costly errors.
So they decided to put in place an integration for this, and it worked as follows:
- The automobile manufacturer broadcast (an asynchronous message) a QPA of a particular item to various suppliers over their B2B gateway.
- When the QPA was sent out, an entry for it was made in their own backend ERP.
- After receiving the query, the suppliers checked the availability of that particular item in their inventory database.
- They then sent the buyer a reply with quotes, each containing the price and availability of that particular item using their own B2B Gateway.
- The information transmitted was interpreted by the different companies with the help of B2B gateways.
- Once the supplier with the appropriate quote was shortlisted, a PO was sent to the selected supplier. The supplier then confirmed the order and sent back a request for the payment (a synchronous message).
- After making the payment, the buyer received an acknowledgment in the form of a PR from the supplier.
B2B Gateways are applications that enable businesses to provide secure, reliable, and real-time data interchange between internal and external systems or applications of their trading partners.
Use Case 2: Inter-Company E-Commerce Enablement
An e-commerce company (Company A) has outsourced its website development to another company (Company B).
Company A uses Jira to manage its day-to-day operations, while Company B uses Azure DevOps. Now problems started to crop up when they tried to collaborate and share information with one another.
This is because the information regarding work items passed between them was through phone calls or emails, and it had to be updated on their respective trackers (Jira/ Azure DevOps) manually.
This increased friction between their teams started to impact their business negatively through data loss and errors. Customer complaints were taking time to resolve, and Company A’s SLA was constantly declining.
So they decided to opt for an integration solution here that would help them overcome this current challenge.
The solution ensured that:
- Information was passed bi-directionally between the 2 issue trackers with the help of pre-defined mappings, for example: work items in Jira were mapped with work items in Azure DevOps.
- Company A had a complete view of the information passed between the different issue trackers. This meant that proper status updates about issues were triggered and updated on both Jira and Azure DevOps automatically.
- Both companies had autonomy while collaborating. This meant that they both could control what information was passed between their issue trackers and how the incoming information was interpreted.
- The data exchanged was secured by means of appropriate encryption methods, and data lost between transitions was correctly recovered without manual intervention.
Such a B2B integration solution started to positively impact company A’s SLA, leaving it with happier customers. It also helped reduce manual data entry errors, and both companies could enjoy seamless and frictionless communication with each other.
Use Case 3: MSP Integration
Managed services providers (MSPs) are the primary beneficiaries of B2B integration because it provides them with a seamless integration platform to connect with their partners and other MSPs.
For instance, a cybersecurity MSP used Exalate’s deep ticket integration to gain a competitive advantage. This integration gave the MSP the flexibility to help customers prevent, detect, and optimally respond to security issues to achieve what they call a stronger security posture.
When the MSP’s customers create incidents, problems, or other entities on ServiceNow, the contents in the fields will be mapped to the internal service team’s Jira Service Management.
So once they update the Jira work item or ticket, the customers will receive an instant update in the entity they created.
In addition to the above examples, B2B integrations can help a wide variety of industries.
B2B integration can benefit almost any type of industry irrespective of its location, size, or domain. But it definitely has challenges that need to be acknowledged beforehand.
The Challenges of B2B Integration
Whether you have an in-house B2B integration solution or cloud-hosted integration services, they both face some challenges when it comes to implementing them end-to-end in a business ecosystem.
- The primary reason for this is the vast number of technologies that keep evolving. So does the number of protocols and standards. This always remains the primary challenge for B2B integrations.
- Today’s organizations have their eyes set on how critical business data fits into the broader business context, so having a “100% holistic view of critical data” is challenging.
- Including the ever-shifting regulatory and governance concerns in integrations is itself a big challenge.
- There’s always a vast number of business documents to exchange in the initial stages. Big data creates problems for integration due to its sheer volume.
- Smaller companies often lack the budget and resources for end-to-end business integration solutions.
How to Pick The Right B2B Integration Solution
So, what must companies actually look for in an integration solution? Let’s have a look at the most important considerations:
Deployment Model
The deployment model could be on-premise, cloud, or hybrid. On-premise means that the integration solution is deployed and managed on the organization’s servers. A cloud model means the solution is provided “as-a-service”. The hybrid approach combines both options. Though the cloud model provides a faster implementation than on-premise solutions, companies still prefer on-premise solutions when they want added security for their integrations.
Cost of the Integration Solution
This is one of the major drivers for adopting and choosing an integration solution. So maintenance costs, upgrades, IT support costs, and upfront costs must all be considered before making the decision.
Also, the training costs of staff and employees must be taken into account. As an essential part of this exercise, you can even perform a measure of due diligence for risk assessment of how your integration approach has impacted the organization’s human capital perspective.
Security Features
Data is currency, so its security is paramount. Whatever the industry, companies are always looking for solutions with inherent security mechanisms.
Private VPNs, HTTPS, advanced authentication tools, secure file transfers, and role-based access mechanisms are much sought after. Additionally, ISO 27001 certification is also preferred.
Additionally, your security concerns are also related to how highly regulated your industry is. It means taking into account any compliance, regulatory, and GDPR considerations.
System Flexibility
Flexible customizations, control over what information is passed between systems and how incoming information is interpreted, covering unique business cases and highly specialized integration scenarios, all must be looked out for while choosing a solution.
Adopting IT in business comes with a cost associated with it. So, when it comes to getting good returns on your investment, it’s important to make the right choice.
As part of flexibility, the B2B Integration solution you choose should allow you to create complex integrations with the help of AI-powered chatbots, copilots, and virtual assistants.
So it makes sense to spend a little time thinking about how you can incorporate some best practices in your B2B integration effort.
B2B Integration Best Practices
It’s important to choose newer technologies and solutions when it comes to integrating business data, applications, or systems.
This is because sometimes, even vendors who previously provided support for legacy systems like older EDIs might no longer find it feasible to repair, maintain, or support them.
Moreover, different applications do not support the built-in mechanisms to interact with each other, so they require technology to do so.
However, the problem with technology is that it will become obsolete very soon. Modern technologies like APIs are evolving fast. So, businesses must allow for integration between these modern designs of integrating applications.
Cloud-based B2B integration solutions are gaining popularity because they are more affordable than on-premise ones. This is true even while scaling because the multi-tenant architecture of cloud applications ensures true scalability and helps companies grow. So it’s the best choice companies can consider.
As a general rule of thumb, it’s important to take a step back and think about how B2B integration can help your company and what value it can add. It means having to understand your business needs and requirements by involving stakeholders and devising a strategy for it.
B2B integration also involves evaluating or re-evaluating your business processes and finding a solution that can complement them in the best possible way. You do not want an integration solution that will force you to overhaul your processes and workflows entirely.
It’s also important to think about how the solution will cater to the future of your business. Doing this is slightly tricky, but it’s essential to understand how the solution will scale as your business grows because you don’t want to end up with a rigid solution.
The most crucial aspect of this is choosing a solution that your organization can adapt to easily. It must be easy to use and intuitive enough for all users of your organization. It must not take a lot of time to set up and get running.
The Future of B2B Integration
Businesses are slowly beginning to offload their heavy B2B lifting to seasoned integration experts. Organizations will no longer struggle to have frictionless communication with their partners.
In response to business needs, B2B integration services are being developed in the following ways.
- Integration services no longer support merely exchanging and transforming data. The integration platforms now support a whole gamut of suppliers and their systems, even things that are connected to their networks, like IoT devices.
- More and more organizations are slowly moving towards outsourcing their B2B integration services to be managed by third-party providers with the right expertise.
- These services are now delivered over the cloud, on-premise, or over a hybrid deployment model. The exponential growth of cloud-based services has opened up a vast number of possibilities wherein the various integration disciplines like B2B integration, application-to-application (A2A), ETL ( extract-transform-load), and the like are getting blurred. This is an age where a single integration platform can serve the needs of almost all kinds of integrations.
SIAM in The Context of B2B Integration
SIAM (Service Integration and Management) means management and governance of services in a multi-sourced environment.
It introduces the role of a “service integrator”, working towards aggregating and consolidating the services provided by the service providers to deliver value to the customer. It is a single logical entity responsible for the end-to-end delivery of services.
Many companies have widely adopted SIAM, and it is slowly gaining its stronghold due to the immense value it brings to multi-sourced environments.
Using such a strong methodology in B2B integrations would mean having to deliver the same standards and values that SIAM sets for your integration effort.
So, integration solution providers must strive to adopt SIAM methodologies and best practices to deliver increased value to their customers.
Furthermore, as SIAM’s demand is increasing in a multi-vendor outsourcing ecosystem, the players already adopting SIAM put continuous efforts into enhancing their solutions by including B2B integrations.
There is also an increased awareness in organizations to use ITIL 4 (Information Technology Infrastructure Library) because of the immense benefits it brings to providing IT services end-to-end and co-creating value for customers.
This has also led to a boost in organizations adopting SIAM and, in turn, using B2B integrations because SIAM works towards creating the same value as ITIL in a multi-sourced environment.
Exalate as the Perfect B2B Integration Solution
Exalate is perfect for connecting businesses because it provides an IaaS (integration as a service) option for connecting with MSPs and external customers.
At the same time, Exalate supports unidirectional and bidirectional integration between systems such as Salesforce, Zendesk, Freshdesk, Jira, GitHub, Azure DevOps, ServiceNow, and many more.
It provides an AI-powered integration scripting console for customizing your mappings. The engine (Groovy-based) uses an embedded chatbot known as AI Assist to generate scripts for scripting connections.
With Exalate, you can establish a network of partners by connecting applications and systems with them to share and obtain necessary resources. The good news is that you regain autonomous control of your systems.
This guide explained a brief history of this B2B integration, what different technologies are used for it, and how they have evolved.
We also explored how organizations tackle B2B integration and how approaching professionals who deliver integration capabilities is recommended rather than building an integration in-house.
And most importantly, we saw how we can make B2B integration drive huge benefits for the organization by adopting SIAM and ITIL 4 methodologies.
Ready to connect your business tools with partners? Book a short call with our team to discuss, and we’ll take it from there.
Recommended Reads:
- Service Integration and Management (SIAM)
- eBonding Integration: The Ultimate Guide to Flexible Data Sync
- How to Build an Effective SIAM Operating Model
- ITIL 4 and Service Management: The Right Choice for Your Service Management Approach
- ServiceNow eBonding: The Complete Guide
- The Complete Blueprint for Aligning Your Service Desk and Development Teams (Process Integration and Best Practices)
