35% of UK financial institutions surveyed acknowledge they are behind the curve and have no current intention to drive improvement
London: Out of a recent survey of 120 mid-to large-sized companies in the UK, over a third (35%) of the 24 financial institutions, which responded, are aware that they are bottom tier business-to-business integration performers and have ‘no current intention to drive improvement’. The survey, by IT Analyst Freeform Dynamics, was commissioned by Liaison Technologies, a data integration specialist.
The Bank of Scotland’s data integration failure three weeks ago only highlighted the problem further. If financial institutions continue to ignore this problem it will have a serious impact on profitability and reputation.
B2B integration is an essential capability for all UK organisations in an increasingly connected and interdependent global economy. In the 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, almost half (47%) of all low performing respondents recognise they are significantly behind in terms of B2B efficiency and effectiveness.
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.
Almost a quarter (38%) of bottom tier performers believe that lack of clear ownership and support at management level is the problem. In addition to the vast majority (48%) who believe that lack of B2B integration skills and knowledge is an underlying issue.
These findings also help explain why companies such as the Bank of Scotland and RBS are experiencing integration failures. As so few financial institutions have nailed B2B integration to any significant degree, despite the billions of pounds invested each year on B2B integration projects.
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, 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.”
Soirola concluded: “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 underperforming 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.”