This document discusses how on-demand solutions are revolutionizing business-to-business (B2B) collaboration. It notes that while B2B integration has been used for decades, traditional point-to-point electronic data interchange (EDI) systems were costly to establish and maintain. Newer cloud-based on-demand solutions simplify B2B integration by eliminating the need for separate interfaces with each partner. Such solutions standardize interfaces and processes across a partner network. The document highlights SAP Information Interchange OnDemand as an example of an on-demand solution that uses a centralized content repository and canonical messaging to streamline B2B transactions and collaboration.

1. SAP White Paper
Information Interchange OnDemand
The Changing Face of Business Networks
How On-Demand Solutions are
Revolutionizing B2B Collaboration

3. Table of Contents
5 Executive Summary
6 The Changing Face of Business
Networks
7 Enterprise Business Collaboration
Challenges
8 Addressing the B2B Collaboration
Challenge
What Industry Leaders Are Doing
Getting a Handle on Costs
Simplification and Consolidation
Frank Ruland
Siddharth Taparia
9 Simpler and More Flexible B2B
Collaboration with On-Demand
Solutions in the Cloud
10 SAP Information Interchange
OnDemand (IIOD) – Revolutionizing the B2B Network
12 Customer Success—
Artoni Transporti
13 Conclusion
14 Glossary of Acronyms and Terms

4. Enterprises are responding to the
challenges of globalization by
transforming business networks and
improving B2B collaboration with
customers, partners, and suppliers.
Organizations that adopt on-demand
B2B process transactions in the cloud will
realize the greatest benefits in the form of
reduced IT cost, lower compliance risk,
and a distinct competitive edge.

5. EXECUTIVE SUMMARY
Executive Summary
Globalization, competitive pressures,
and the increased speed of business
mean that organizations must have the
necessary automated systems and processes in place to address supply chain
complexity and quickly create a collaborative partner community. While the
benefits of e-business initiatives are
clear, enabling business-to-business
(B2B) integration using point-to-point
EDI translators is time intensive and
cost-prohibitive because of IT resource
requirements and ongoing operational
expense barriers. Manual approaches
and legacy technologies such as B2B
converters can no longer keep pace
with the requirements for greater operational efficiency and lower cost. However, new solutions are emerging which
simplify the B2B landscape by eliminating point-to-point integrations. They
enable a rich repository of partners and
facilitate the rapid growth of a processintegrated partner network. Furthermore, B2B enablers which employ a canonical messaging approach to process
structuring can result in dramatic cost
savings, increased business agility, accelerated decision-making, and lower
compliance risk—while providing partners, customers, and suppliers with a
distinct competitive edge.
SAP White Paper –The Changing Face of Business Networks
5

6. The Changing Face of Business Networks
Business networks have been around
since the late 1970s, when the era of
electronic data interchanges, or EDIs,
began within the automotive industry.
Before EDI, the only way to move documents between businesses was by mail
or courier. There were no electronic options, and fax technology was not yet a
practical solution. While B2B transactions have now been automated for over
three decades, the high cost of establishing these networks has made them
prohibitive for all but the largest of companies. Those organizations realized tremendous savings by linking electronically with large suppliers or key customers.
Early EDI was originally based on private
networks, requiring large capital outlays
to implement. Adding incremental business partners was costly because the
network architecture consisted of pointto-point connections. Savings achieved
in these first-generation digital marketplaces focused almost entirely on lowering the cost of procured goods. Because
traditional procurement systems and
processes remained largely unchanged,
procurement process cost reductions
were minimal.
EDI demonstrated the substantial savings opportunity from connecting buyers and suppliers over networks and automating business-to-business
transactions. More recently, pervasive,
low-cost connectivity to the Internet has
lowered the barrier to entry for enterprises of all sizes, enabling them to connect electronically with counterparts for
a fraction of the cost of a traditional EDI
system. This has fueled the boom in
B2B marketplaces, portals and networks. New systems now automate the
procurement, sales process, and inventory management, as well as tighten the
relationship between buyers and their
suppliers in the supply chain. The days
of EDI message formats dominating the
B2B world are past. Online Survey results from the February, 2011 Forrester
Re­ earch, Inc., report “The Future of
s
EDI” indicated that the most common
message format (42% of the total) has
become spreadsheets and other text
documents. That percentage continues
to increase. EDI comes in a close second
(41%); followed by industry standard
XML like PIDX, CIDX, ACORD, and HL7;
financial formats like ACH, SWIFT and
FIX; flat files; proprietary XML; and RosettaNet PIPs.
B2B integration is evolving at a faster
rate than ever before, and is influenced
by the emergence of cloud-based social
networks such as LinkedIn, Xing, and
Facebook. These types of networks use
a common cloud-based platform, along
with consistent interfaces and processes that every member can easily access
and use. The cost of entry is minimal,
and the value of the network for individual members increases as the network
adds new participants and expands in
diversity and coverage. Now B2B integration is not just about exchanging
documents, but about fostering a collaborative community. As a result, increased collaboration between companies and their customers, partners, and
suppliers has become a critical requirement for business success.
Are you ready to compete in a global economy?
SAP Information Interchange OnDemand can
help you connect, transact and collaborate
better with your business network.

7. Enterprise Business
Collaboration Challenges
Despite investments in EDI and the advent of newer B2B marketplaces, an Aberdeen research study of 191 supply
chain executives found that only 14% of
respondents indicated that they could
perform online trading partner collaboration1. At the same time, supply chain
complexity is rising due to globalization.
For the enterprise, this means working
with more global suppliers, reaching out
to more global customers, and dealing
with truly global competitors. In a costconstrained business climate, companies are continuing their journey towards outsourced supply chains from a
manufacturing and logistics standpoint.
In such an environment, it has become
difficult for companies to stay informed
and in control of every stage of their
supply chains. Businesses are now more
reliant on their network of partners than
ever before, and are being challenged by
two major trends.
Increasing Complexity of Business
Networks - In most business networks
today, the amount of data transferred
between network partners has grown
exponentially. Business processes now
span companies, industries, and geographic boundaries as businesses reach
out to new markets in the quest for continued growth. The increasing number of
business partners as well as mergers
and acquisitions on both the supply and
buy side adds further complexity. IT and
the business must establish interfaces
to each of these partners and maintain
them over time.
Accelerated Speed of Business - The
rapid pace of globalization and market
changes provide only a short window of
opportunity for adopting successful networking strategies. Companies that
have operated for generations without
competition are realizing that they must
rapidly and dramatically transform their
business strategies now if they want to
retain existing customers and attract
new ones. Shorter innovation cycles
mean that new products and services
are being introduced at more frequent
intervals. Dynamic market conditions result in regular and sometimes unexpected changes in partner relationships. This
accelerated cycle has an influence on
the number of interfaces that must be
established, maintained and eventually
retired during the relationship lifecycle.
Top Business Challenges Driving New Approaches to B2B Collaboration
Rising logistics cost
Rising raw materials/
manufacturing costs
Rising complexity of managing
an increasingly global
business network
Escalating customer
service demands
The need to consolidate B2B
integration platforms and create
a single B2B integration platform
0%
10%
20%
30%
40%
50%
Percent of Respondents
Figure 1: Multiple business challenges are driving global enterprises to examine
new approaches to B2B collaboration with partner and customers.
Source: Aberdeen Research, May 20112
SAP White Paper –The Changing Face of Business Networks
7

8. Addressing the B2B Collaboration Challenge
WHAT INDUSTRY LEADERS
ARE DOING
According to Aberdeen Research,
“best-in-class” companies lead the way
in the percentage of transactions received electronically. A “best-in-class”
company is defined as one that follows
practices that are the best currently being employed and are superior to the industry average, resulting in the top industry performance. They share more
information electronically with partners,
especially critical transaction information such as purchase orders and payment status (by a factor of two to three
times). Their suppliers are more likely to
share electronic information such as
purchase order acknowledgements, advance shipping notices, and invoices. In
addition, 40% of the best-in-class are
even willing to share some of their more
sensitive information, such as manufacturing plans and release schedules.
When asked about the top challenges
that these companies are facing to improve integration and collaboration,
42% of companies cited rising logistics
costs, 40% cited rising raw material and
manufacturing costs, and 38% also cited the rising complexity of managing an
increasingly global business network3.
Getting a Handle on Costs
A recent Forrester Research study
asking participants to identify the main
business drivers influencing the requirement to improve interactions with their
external partners provides additional
validation and confirms that cost is a
key motivator. Forrester identified two
closely related business drivers that tied
for first place. 82% of respondents cited
the need to reduce rising costs for the
business, as well as the need to exchange electronic documents with business partners4.
Why is cost a major issue? Manual
document exchange is still prevalent in
many firms, bringing higher operational
costs. Moving to electronic documents
saves both time and money. Point-topoint electronic business interfaces are
expensive, with an estimated internal
cost of $15,000 per partner interface.
Most enterprises still have to exchange
standard business documents with large
numbers of trading partners via manual
methods, including email. Aberdeen
conducted a survey of over 191 supply
chain executives where only 14% of responents indicated that they had the
ability to perform onine trading partner
collaboration5. While the need to exchange electronic documents with business partners is cost-related, enterprises achieve other benefits from doing
business electronically. Electronic document exchanges enable enterprises to
respond faster to changing business
needs, reducing process cycle times. For
example, using electronic documents in
supply chain inventory scenarios can reduce cycle times resulting in cost savings. Other business issues that rank
highly are the needs for real-time visibility into business processes, increased
business agility, and better solutions for
supporting compliance and risk management for B2B exchanges. Enterprises are finding it increasingly important
to view an up-to-date status of particu-
lar business transactions involving trading partners. Modern B2B tools can provide a web-based portal for tracking the
status of B2B transactions as they flow
between enterprises.
Simplification and Consolidation
Enterprises also face technical challenges when considering new B2B process exchange solutions. The most significant technical problem, affecting
66% of respondents, is the difficulty
that organizations face when they have
to integrate their inbound/outbound EDI
transactions with other applications.
The main reason for this is that so many
organizations use separate tools for EDI
integration and application / process integration. The second biggest issue is
effectively responding to new business
requests, which arises from difficulty in
creating, testing, and implementing new
partner or transaction sets. Other issues
include difficulty in managing a partner
community (especially as it grows), supporting smaller, non-EDI-capable partners, and the inability to support process improvement efforts.
Companies that resist change and
continue to operate at the status quo
cannot keep pace with the speed of
business today. In a highly competitive
environment with ever-expanding global supply chains, businesses must increase the efficiency of their processes
without impacting profitability. So how
should enterprises address the issue of
improving business process integration? How can organizations avoid the
business and technical pitfalls sometimes associated with adopting a new
way of operating?

9. Simpler and More Flexible B2B Collaboration
with On-Demand Solutions in the Cloud
A state-of-the-art on-demand B2B solution should include the capabilities of
a business process management (BPM)
solution with its collection of natively integrated business objects, empowering
individual companies to optimize core
operations and work together as a business network. A service-oriented B2B
solution tightly integrated with backend
systems facilitates improved collaboration, with active sharing of information
among customers and partners. This solution provides all participants with increased visibility into processes, enabling partners to accelerate the pace of
innovation. They can then take advantage of evolving business opportunities
quickly, while improving operational efficiencies and reducing risk.
By eliminating point-to-point interfaces with trading partners and reconfiguring IT systems to employ a cloud-based
B2B solution for faster and easier adaptability, companies can service-enable
enterprise resource planning (ERP), customer relationship management (CRM),
and supply chain management (SCM)
applications to function like web services that anyone in the network can use.
This approach simplifies change management, integration, and information
sharing with the partner network, as well
as delivering cost benefits to the enterprise. The benefits to organizations that
deploy B2B integration solutions extend
beyond cost savings as illustrated in Figure 2. While the highest benefit, reduction in manual processing and administrative work, is cost-related, a large
percentage of companies have made
significant hard metrics improvements
in other areas, including higher levels of
customer satisfaction and increases in
perfect order fulfillment.
On-demand B2B solutions take a holistic approach to addressing application
integration, process integration, and
B2B integration using a common tool
set which creates a level of network interface standardization. Not only does
an on-demand solution provide a more
flexible approach to integration, but it
also reduces overall maintenance costs.
Having a common infrastructure and
standard interfaces for handling enterprise integration needs reduces maintenance efforts, as one vendor assumes
the responsibility for ensuring the functional integration of all system components. Specialized legacy point-to-point
B2B tools require labor-intensive integration work to obtain internal data and
transform it to match the document
type and format that meets the needs of
each trading partner. New on-demand
B2B solutions reduce this effort by using
more productive integration techniques
to support the transfer of data between
internal applications.
Top Benefits Derived from B2B Customer Collaboration
Reduction in manual
processing and
administrative work
Increased
customer satisfaction
Reduced data errors
Increase in perfect order
fulfillment percentage
Reduction in costs to
process a customer order
0% 10% 20% 30% 40% 50% 60% 70% 80%
Percent of Respondents
Figure 2: Benefits associated with B2B customer collaboration efforts include
increases in customer satisfaction as well as operational cost savings.
Source: Aberdeen Research 6
SAP White Paper –The Changing Face of Business Networks
9

10. REVOLUTIONIZING THE B2B NETWORK
SAP Information Interchange OnDemand
(IIOD)
SAP Information Interchange OnDemand (IIOD) is a B2B integration solution that provides a simpler, more affordable way to connect with customers
and suppliers for B2B e-commerce. Using pre-configured profiles, an enterprise can make changes within its supply chain without time- and
resource-intensive point-to-point integration. Process collaboration allows
trading partners to exchange richer data
more frequently, increasing forecast accuracy, hastening planning velocity, improving workload balancing, and streamlining cash flow management. SAP IIOD
is focused on deep integration with key
enterprise applications and eliminates
the need for multiple point-to-point links
by moving business process translation
to an integration cloud. SAP IIOD provides a consistent foundation that enables businesses to connect, transact,
and collaborate with partners. While
other B2B vendors with cloud-based offerings optionally translate between two
trading partners for a fee, SAP IIOD does
the translation as a core service.
SAP Information Interchange OnDemand provides a B2B content engine,
combined with a package of partner profiles. This combination enables a company to establish a connection with a
business partner just once for each process—and instantly exchange related
electronic documents, such as purchase
orders, forecasts, invoices, and delivery
notes, using existing SAP applications.
Because the solution supports collaboration with partners for all types of materials, goods, and services—not only indirect goods—it can broaden the scope
of a company’s B2B commerce initiatives for even greater return on investment. The SAP IIOD software content
engine integrates directly with back-end
SAP software using SAP NetWeaver Process Integration (PI) or other enterprise
application integration (EAI) tools,
translating documents into a universal
meta format and then into the appropriate partner format. The content engine
leverages pre-built partner profiles representing the business logic, formats,
and protocols of specific trading partners for different business processes.
The SAP IIOD interface architecture
was developed using a unique, canonical
approach to messaging. By definition,
something which is canonical provides
the simplest form possible, based on a
consistent and standardized approach.
Canonical messaging deploys a reusable
interface that can communicate between different data formats and applications. All data in this messaging architecture, regardless of origin or format,
The content repository allows SAP customers to integrate once and re-use
standard interfaces across the Business Partner Network.
CURRENT POINT-TO-POINT APPROACH
B2B/EDI INTEGRATION 1.0
CENTRAL B2B CONTENT REPOSITORY:
INTEGRATE ONCE
B2B/EDI INTEGRATION 2.0
SAP
IIOD
• 3rd party integration for EDI
• Not scalable
• Need for internal resources
SAP Information Interchange OnDemand
• Faster implementation
• Bigger flexibility
• Lower TCO
Figure 3: The canonical messaging approach used by SAP IIOD significantly
reduces interface development time, simplifies interface asset management,
and reduces integration and maintenance costs.

11. REVOLUTIONIZING THE B2B NETWORK
conforms to a common set of definitions, enabling SAP IIOD to function as
an intermediary between a source application and a target application. Consequently, the SAP IIOD solution can significantly reduce the operational
complexity for enterprises that exchange information between multiple
applications and multiple B2B partners.
In contrast, older point-to-point messaging approaches require considerably
more time and resources to deploy,
since a unique data interface must be
created for each new application exchange. Used appropriately, canonical
messages will streamline application integration and SOA initiatives, and have
the potential to substantially reduce integration development and maintenance costs.7
New SAP IIOD pre-built partner profiles can be purchased as relationships
are established with new customers,
suppliers, and logistics service providers. After activation by SAP the profiles
,
enable business to be conducted with
them electronically. If SAP does not
have a pre-built profile for a trading
partner for a specific process, SAP will
provide one.
With SAP Information Interchange OnDemand, companies of all sizes gain full,
flexible B2B functionality, quickly and
cost-effectively, as well as the ability to
scale operations up to millions of transactions per year through automation.
The benefits are compelling:
•• Reduced IT costs and business partner onboarding time: SAP IIOD eliminates the need for mapping tradingpartner formats and constantly
investing in new time-and-material IT
services to integrate with your value
chain. Plus, you get well-defined inter-
SAP White Paper –The Changing Face of Business Networks
faces into your operating system
environment.
•• Increased business agility: SAP IIOD
simplifies and streamlines the process
of adding new trading partners, and
making changes to partners and applications, to meet evolving business
needs.
•• Lower compliance risk: Now you can
comply with any customer or partner
B2B or EDI request without having to
build point-to-point integration and
stay compliant over time. SAP keeps
partner profiles up-to-date for you.
•• IT simplification: With no mappings to
constantly manage and configure, SAP
Information Interchange OnDemand
frees up crucial IT resources currently
under-utilized so they can be rechanneled to higher-value initiatives.
11

12. SHARPENING THE COMPETITIVE EDGE FOR ARTONI TRANSPORTI
Customer Success—Artoni Transporti
SAP Information Interchange OnDemand has been a catalyst in the transformation of Artoni Transporti S.p.A.
from a regional European transportation
company to a leader in global supply
chain logistics. Established in Italy in
1933 to provide goods delivery, the company was an early adopter of information technology beginning in the 1970s.
Artoni has always pursued a customercentered philosophy which has been
fundamental to its growth and success.
As the new millennium approached, Artoni observed the effects of globalization first-hand on the transportation industry. Many customers had expanded
into international markets and adopted
longer and more complex supply chains.
The industry was changing quickly, and
Artoni recognized that these customers
would require a much higher level of service as they expanded globally. The
company also knew that synergies could
be achieved by integrating transport,
warehouse management and international forwarding services into a single
comprehensive logistics solution. As a
result, Artoni Transporti became one of
the first 3PL (third-party logistics)
providers.
The emergence of 3PL providers required a structured, highly collaborative
approach among all of the players in the
extended supply chain, with the goal of
improving efficiencies and driving down
costs. The entire process was supported
by information technologies capable of
facilitating communication with the customer, as well as integration between
the various players in the extended logistics chain. The initial business-tobusiness network required the creation
of point-to-point electronic interfaces to
each partner, one at a time. This time
and resource-intensive process took ten
years to complete. While this was an im-
portant development, Artoni realized
that a point-to-point business network
lacked flexibility and could never scale
fast enough to provide the competitive
advantages required for success in the
global economy.
Artoni Transporti sought a simpler and
more efficient way to build a business
collaboration network which took a
standardized and repeatable approach
to logistics management. The objective
was clear: improve customer relations
by enabling Artoni and its partners to
more easily share growing volumes of
information. This goal led to an evaluation of the SAP Information Interchange
OnDemand (IIOD) solution in the context of the implementation of SAP Transportation Management. The SAP B2B
content engine, combined with a package of pre-built partner profiles, eliminated the need for time-consuming
point-to-point integration and standards
enforcement. Leveraging the flexible and
streamlined approach to business collaboration provided by SAP Artoni was
,
able to create a B2B network of 600
partners, customers, and suppliers in
less than five months.
“It used to take days, sometimes
weeks, to add new partners to our network” says Artoni Director of Worldwide
,
Channel Partners, Giacomo Coppi. “With
the SAP solution, the same process now
only takes a few hours to accomplish.”
Standardized interfaces from SAP enable Artoni to more readily exchange orders, invoices, and payments with global
partners in the U.S., China, and Latin
America. The solution has helped Artoni
realize improved sales, customer service, and cash flow, while reducing operational costs. Customers, partners, and
suppliers today expect more than just
cost efficiencies from a logistics and
transport service provider. With the SAP
IIOD solution, Artoni Transporti can also
deliver improved automated business
processes that sharpen their competitive edge in the global marketplace.
“It used to take days, sometimes weeks, to add new
partners to our network. With the SAP solution, the
same process now only takes a few hours to accomplish.”
Giacomo Coppi, Director of Worldwide Channel Partners, Artoni Transporti

13. Conclusion
In today’s dynamic e-commerce environment, businesses must have the necessary automated systems and processes in place to address supply chain
complexity, accelerate the speed of
business, and create a collaborative
partner community. Manual approaches
and legacy B2B technologies such as
point-to-point EDI connections can no
longer keep pace with the requirements
for greater operational efficiency and
lower cost. Cloud-based, on-demand
B2B networks simplify the landscape by
eliminating point-to-point integrations,
easily enabling a rich content repository
of partners, and facilitating the rapid
growth of a process-integrated partner
network.
SAP Information Interchange OnDemand helps increase visibility and control over B2B transactions, optimizes
decision making, and simplifies access
to the transactional information outside
the four walls of your business. SAP IIOD
automates business transactions and
eliminates manual and paper-based processes within your business network to
deliver greater flexibility and efficiency.
The result is dramatic cost savings, increased business agility, accelerated decision-making, and lower compliance
risk—while providing a critical competitive edge for partners, customers, and
suppliers.
LEARN MORE
Contact SAP today to learn how SAP Information Interchange OnDemand can help you
connect, transact and collaborate better with
your business network. More information is
available at www.sap.com/b2b
FOOTNOTES
1. Aberdeen Research: Strategies for Building
an ROI Business Case, June 2011
2. Ibid
3. Ibid
4. Forrester Research, Inc.: The Future of EDI,
Feb. 2011
5. Aberdeen Research: Strategies for Building
an ROI Business Case, June 2011
6. Ibid
7. Gartner Group: How a Canonical Messaging
Approach Can Help You Simplify and Reduce
Interface Assets, May 2011
SAP White Paper –The Changing Face of Business Networks
13

14. Glossary of Acronyms and Terms
B2B—Business-to-Business—
describes commerce transactions
between businesses
BPM—Business Process Management—a holistic management approach
focused on aligning all aspects of an organization with the wants and needs of
its partners and customers
Canonical messaging - A canonical
message is an intermediary. An interface that employs canonical messaging
transforms data from the format, structure and semantics native to the source
application to that of the established canonical intermediary, and from the canonical intermediary into the format,
structure and semantics that the target
applications require.
CRM—Customer Relationship Management—a business process for managing a company’s interactions with
customers, clients and sales prospects
EAI –Enterprise Application Integration - a framework that enables integration of systems and applications across
the enterprise
EDI—Electronic Data Interchange—
the structured transmission of data between organizations by electronic
means (from one computer system to
another computer system)
ERP—Enterprise Resource Planning—
a business process which integrates internal and external management information across an entire organization,
embracing finance/accounting, manufacturing, sales and service, and customer relationship management
IIOD—Information Interchange OnDemand—the leading cloud-based B2B solution from SAP
SOA—Service-Oriented Architecture—a
set of principles and methodologies for
designing and developing software in the
form of interoperable services

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