Integration Issues Continue to Plague Nearly 75% of Supply Chain Companies

According to the 2021 State of Ecosystem and Application Integration Report, an annual survey published today by Cleo, the COVID-19 pandemic shined a spotlight into the glaring integration gaps in supply chain processes, revealing more clearly than ever how such gaps impede revenue and threaten business survival.

In response, companies aggressively moved their integration solutions to the cloud, giving their supply chains the agility to not only absorb disruption, but outsmart it through improved visibility, control, analytics, and real-time insights.

When asked how much annual revenue was lost in 2020 due to poor integrations, 66% of respondents said their companies lost up to $500,000, compared with 43% the prior year. And 10% estimated they lost more than $1,000,000 due to integration issues in 2020.

Key findings from the survey include:

• Lost Revenue: 74% of companies lost more revenue due to integration issues in 2020 than in 2019.
• Lost Orders: 88% admit they lost orders, and more than half said they lost more orders in 2020 than in the previous year. 25% admit they really don’t know how many orders they are losing.
• Cloud Migration: Having gained new perspective on how outdated integration technology negatively impacts revenue, 96% of companies say they’ll focus more on cloud migration and digital transformation in 2021.

“Digitalization of business and cloud integration initiatives are not new to B2B organizations, but in 2020, the pandemic shined a light on how important these initiatives are to revenue growth – and for some, survival,” said Tushar Patel, CMO of Cleo. “Organizations have gained a new perspective on how important modern integration platforms are to dynamically respond to market conditions, whether those are new revenue opportunities or supply chain disruptions. This shift in mindset and urgency accelerated the adoption of ecosystem integration. We expect this trend will continue for years to come.”

Relative to integration technology, the survey revealed that companies do not have sufficient visibility into or control over what’s really happening with their supply chains:

• Only about half of the companies surveyed indicated they could access supply chain information to glean business insights. Yet, nearly 9 out of 10 companies said having end-to-end process visibility was important for their business.
• Most companies added new supply chain partners in 2020, and while onboarding generally happened faster than in the previous year, the pace woefully lagged what the business needed, contributing to negative impact on revenues.
• Legacy systems and insufficient application integration capabilities were key reasons companies encountered difficulty onboarding new partners, highlighting the importance of having API and EDI integration capabilities on the same platform.

Other integration-related trouble spots that negatively impacted businesses in 2020: 38% of respondents identified siloed, one-off solutions as an impediment to revenue. Thirty-five percent pointed to difficulty integrating new applications, and 34% mentioned poor integration visibility as causing revenue problems. Although these metrics improved slightly year over year, persistent integration challenges like these continue to hold companies back.

One clear takeaway from the survey is that organizations have gained a new perspective on the value of cloud integration, prompting nine out of ten B2B companies to take immediate action and change the way they do business with their ecosystem.

• Going Digital: 66% percent said they increased their digital business capabilities (e.g., eCommerce, digital supply chain).
• Targeting New Audiences: 34% say they started targeting new audiences, while thirty-two percent created altogether new lines of business, while 17% terminated some.
• Creating New Business Models: Nearly one-third (30%) decided to fundamentally change their business model; for example, one-quarter making a shift to a direct-to-consumer (DTC) model, or 32% deciding to increase their focus on customer loyalty programs.

https://resources.cleo.com/report-ecosystem-and-application-integration-2021