A business does not operate in isolation as its success depends heavily on its network of partner relationships. The quality of output and level of innovation of is only as good as the input provided by their suppliers. Today, organizations are considering their suppliers as partners in a bid to elevate the level of innovation and drastically improve product quality. The extended enterprise model has been gaining a lot of attention these days with many companies looking for ways to implement it by using LMS, EDI, social collaboration, lean partnership, and partner certification programs. So why are businesses increasingly focusing on implementing extended enterprise model?
Reduce Costs
For a modern-day business, up to 80% of the operating costs can originate from outside the organization. The extended enterprise model allows an organization to collaborate with the supply chain members smoothly. IT plays a vital role in enabling extended enterprise by providing all members of a supply chain with a shared view of data in real-time. This largely eliminates the costs and risks associated with help desk and service calls, maintaining compliance, and making errors.
Collaboration and Innovation
Extended enterprise facilitates companies to easily communicate their requirements to their partners and drive innovation by collaborating on the development process. Also, integrated systems also allow the organization to maximize benefits of the digital and automation process by streamlining all business processes and marketing efforts.
Shorten Cycle Times
When all the key stakeholders are on the same page of the developmental process, the timeframes for activities like new product introduction, global expansion, and external sales drastically reduces. The shorter cycle time boosts supply chain efficiency and enables an organization to focus on their core activities.
Organizations are emphasizing on ways to integrate extended enterprise to increase product/service knowledge, customer engagement, and accelerate the sales cycle. Extended enterprise also has the potential to improve vital business functions by extending their value chain and engaging more deeply with external collaborators.
For more information on extended enterprise and how your organization can streamline the overall supply chain:
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