In our previous publication, "Choosing The Right Data Integration Strategy: In-house Vs. Fully Managed Integrations", we discussed existing approaches and strategies enterprises use when it comes to the complex world of b2b data integration. In brief, two options are the most popular today - develop integration solutions in-house (Do-It-Yourself (DIY) integrations) or partner with a company that provides a fully managed data integration service (fully managed integration solution).
Although the DIY approach is still popular today in many industries, due to a new business reality where the pressure to do more with less is higher than ever before, a shift towards managed integration solutions is inevitable.
In this blog, we will discuss a concept of a fully managed data integration solution to help you understand what it is, why the do-it-yourself model is losing its popularity so fast, and how to choose a fully managed service that will be efficient specifically for your company.
What is a fully managed data integration solution?
In brief, a fully managed data integration solution is a partnership between you and a company providing the solution, where the latter takes all responsibilities for data integration and data management, including the actual implementation work such as trading partner onboarding, active surveillance of data traffic flowing according to a client's requirements, change request handling, and many more.
To better understand the concept, let's compare it with the popular today do-it-yourself integrations.
Whatever the business domain you operate in, when choosing a classic DIY approach to develop an integration solution, you need to ensure two things - a proper technology (an Industry-specific platform providing pre-configured and standardized solutions) and skillful personnel (dedicated in-house resources capable of developing, deploying and maintaining such solutions).
While finding a good platform is not an issue today, lack of skills and the burden of having integration specialists in-house are the biggest roadblocks for most companies pursuing the DIY integration path. Compare it to cutting your hair. Would you consider learning to do it yourself or go to a salon? Or would you build a house yourself from scratch or buy a house package. Think about the time consumed, cost, and expected outcome.
Going with fully managed solutions, you do not have to worry about any of those issues since the approach implies partnering with a vendor that takes care of both - data integration and data management. An additional benefit of the approach is that managed solutions are provided as a service where you only pay a one-time setup fee and a monthly subscription payment that depends on the amount of managed data.
Put simply, compared to the DIY model, a fully managed services option offers: an efficient platform capable of many integration scenarios and a skilled team that will develop, test, deploys, and maintain integration solutions according to a client's requirements and needs.
The moment SLA and a contract are set, you do not have to even think about finding proper technology, handling personnel that will be running the show (onboarding, support, development, etc.), or dealing with unexpected expenses associated with owning software, hardware, or managing a team of integration experts.
Going with fully managed solutions, you can focus on your core competencies to grow your business while your data integration partner handles data integration and data management daily on your behalf.
Why is the do-it-yourself model losing popularity within the supply chain and logistics domain?
Nowadays, when digital transformation is imperative for all stakeholders of the supply chain and logistics industry, and better connectivity management and real-time information sharing are an additional competitive advantage, companies are looking for the most efficient solutions to handle their b2b integrations. It is not about cost but about scaling, automating, and achieving a growing gross margin for your business.
Due to a constant scarcity of integration skills in the labor market and other risks associated with the DIY approach, handling resource-intensive in-house integration projects could be a significant risk for all companies. This leads many to believe that in 2021, the in-house approach is badly outdated. As a result, increasing numbers of enterprises shift to a new business model where fully managed integration solutions are a low-risk path to do b2b integrations efficiently.
By leveraging modern managed integration solutions, companies get a chance to avoid unnecessary spending and gain a competitive advantage by pushing the performance of B2B communications to a new level.
The benefits of fully managed integrations over in-house solutions
Below are some benefits that enterprises see once they rely on fully managed solutions for fulfilling their integration needs.
Get a full turnkey service.
A fully managed integration service makes it possible for companies of any size to focus on their core competencies and grow their businesses—instead of handling complex integrations.
Reduce overhead costs.
No need to invest in software or hardware infrastructure. You only pay for the service your integration partner provides.
Predictable and clear budget for your integrations.
Most vendors have volume-based pricing, so you can calculate your costs more promptly.
Connect with any system and application and receive the data in a preferred format.
No matter what data formats, protocol, or business application you or your trading partners use, a managed integration solution takes care of it.
No need to have a team of integration experts.
Integration experts are scarce and expensive. You won't need to handle the burden of hiring and training them.
Business growth - faster deployment and partner onboarding.
Compared to traditional integration solutions, the development, testing, deployment of managed integrations happen a lot faster, and you get to receive vital information quickly. Your customers and partners are satisfied, and your business grows.
Scalability of the solution.
As your messaging volumes are growing or the number of connections increases, the solution can be adjusted accordingly.
Finally, when building B2B integrations, industry expertise regarding standards, common practices, and industry particularities, such as competitive landscape, are crucial for success. E.g., in global logistics, it is vital to understand that despite standards, each Carrier or other Logistics Service Provider (LSP) has their own interfaces, and many require critical mass before engaging in direct integration projects with customers or their system providers.
How to choose a fully managed service that will be efficient specifically for your business domain
Although many vendors offer managed data integration solutions today, they might provide different sets of integration capabilities. So, some of those might not work for your industry at all.
When you choose the vendor you are going to work with, besides discovering its business and pricing model, consider these three elements - technical capabilities of the platform a vendor relies on, business domain or industry vendor provides solutions for, and the experience and knowledge the vendor possesses.
Let's look at each element to understand why they are important.
As a rule, fully managed integration services are built on cloud-based integration platforms designed to act as a middle layer between systems and applications, facilitating the real-time data exchange between multiple stakeholders. So, the platform's capabilities are important since they define integration scenarios you can expect from a solution a vendor provides.
These scenarios are the most common today within the supply chain and logistic industry:
- B2B/EDI integrations
To connect you with your trading partners.
- Enterprise Application integration
To orchestrate the data integration between your systems.
- Hybrid integration
To connect traditional on-premise systems with modern cloud-based applications.
- API management
To publish and maintain API:s that you trading partners can use to integrate with your systems.
- SaaS integration
To create integrations between various SaaS solutions that you are using.
- Business process automation
To eliminate manual operations, reducing the efficiency of operations.
Besides that, the platform should be capable of working with different interfaces and use different data types.
Industry focus and understanding clients' business domain
You might wonder why it is important to choose a vendor with knowledge and experience relevant specifically to your industry. The answer is simple: integration is all about exchanging information between different business applications and organizations. Each industry has its own sets of standards, documents, and approaches to exchange vital for the stakeholder's data.
If the vendor understands your domain, the solution will be not only efficient but developed and deployed fast.
The diagram below demonstrates the complexity of a typical trade and logistics integration architecture common for the supply chain and logistics domain. As seen from the image, there are several documents (messaging examples) typical for overland, sea, and air transportation modes, and the data standards stakeholders of the industry use.
Communication between stakeholders implies that everyone within the ecosystem receives the data they need in a format their systems can understand. So here, excessive industry knowledge, substantial experience in integrations, and understanding of the client's core business is a game-changer. If a vendor newer worked with these kinds of integrations, the chance to get efficient integration solutions is low.
Apart from superior technology in place and industry-specific knowledge, successful planning and execution of an integration solution require a well-experienced team that solves typical industry integration challenges daily.
Well-trained personnel prepared for specific tasks can significantly speed up the development and deployment of solutions. Sometimes, new connections can be added in minutes. Besides that, since these experts know the industry, they understand how the basic design of solutions should be modified to fit clients' constantly changing specific needs. All these ensure short development and deployment cycles, which are vital when a client needs results in a short time.
Especially in the global supply chain context, there is a slow but steady transition from traditional EDIFACT- towards more modern API-type of integrations. While start-ups such as the growing digital freight forwarder segment focus on APIs, the lion’s share of orders-, status event, document, and invoice information is still exchanged with traditional formats. Many IT executives face the challenge that it seems impossible to find skilled personnel that masters or is willing to master both worlds.
For all those companies not wanting to deal with the burden of developing integration solutions in-house and looking for a low-risk path to get efficient b2b integrations, outsourcing this task to companies that execute integrations as a service daily might be the best option today.
If you are looking for a trusted vendor providing fully managed solutions for the supply chain and logistics industry, Youredi might be the perfect partner for you.
Whether your system talks traditional EDI (EDIFACT, X12, or something else) or you may need to exchange data with your business partners via modern event-based APIs, Youredi, as a leading expert providing fully managed integration solutions for the industry, can handle all your data integration tasks to ensure your smooth communications with shippers, BCO's, freight forwarders, carriers, or 3rd parties involved in your ecosystem.
To learn more about Youredi or the solutions we provide, please visit our website, or schedule a free meeting with our integration expert.