Learn what B2B integration is, how it works, and its key benefits. Discover how businesses use EDI, APIs, and automation to streamline operations.
Companies work with multiple B2B partners — suppliers, logistics providers, and distributors — to keep operations running smoothly. But managing these relationships with traditional, disconnected systems can lead to delays, errors, and inefficiencies that slow down supply chains and impact customer satisfaction.
B2B integration offers a better way. By automating transactions, B2B integration reduces manual work, speeds up order processing, improves data accuracy, and allows you to gain better visibility into your operations.
In this guide, we’ll explore how B2B integration works, its key benefits, and real-world examples of businesses using Electronic Data Interchange (EDI) to improve their supply chains.
What Is B2B Integration?
B2B (business-to-business) integration is the automation of transactions, data exchanges, workflows, and other processes between companies. Instead of relying on emails, phone calls, or paper documents, B2B integration allows businesses to use digital systems to exchange important information, such as purchase orders, invoices, shipping notices, and payment details, rather than doing so manually.
By integrating their systems and eliminating manual data entry, businesses experience fewer errors, faster transactions, and greater confidence that all information is accurate. The right B2B integration strategy also makes it easier for trading partners to connect important internal applications, such as enterprise resource planning (ERP) software, customer relationship management (CRM) systems, accounting platforms, and supply-chain management tools.
What Is a B2B Integration Platform?
A B2B integration platform acts as a bridge between a company’s internal systems and its trading partners’. It collects data, converts it into a standardized format (such as EDI, XML, or JSON), and sends it using a secure transmission method like AS2, SFTP, or APIs.
When implementing B2B integration, there are two main approaches, cloud-based and on-premises:
Cloud-Based B2B Integration Services
Cloud-based B2B integration solutions manage transactions and data exchanges without requiring companies to install hardware, maintain servers, or handle complex software configurations. Instead of running on a company’s own IT infrastructure, these platforms are hosted by third-party providers. They offer built-in security features, data backups, and added convenience because they're accessible from anywhere with an internet connection. Cloud-based solutions are also automatically updated to ensure compliance with industry regulations and don't require in-house IT maintenance.
On-Premises B2B Integrations
With on-premises B2B integration, companies install and manage the system within their own IT infrastructure. This allows them to have greater control over their data, but it requires more maintenance, IT resources, and upfront costs. Larger businesses with strict compliance or data protection requirements often prefer to go the on-premises route. By keeping integration systems in-house, they can tailor access controls, implement specific encryption standards, and reduce reliance on third-party providers, which lowers the risk of external breaches or unauthorized access.
How Does B2B Integration Work? 3 Key Components
Here’s a step-by-step look at the typical B2B integration process:
1. Evaluating Business Needs
Before setting up B2B integration, you need to first identify any problem areas in your current system. Are orders frequently delayed due to slow manual processing? Do errors in invoices or purchase orders cause disputes with trading partners? Is inventory data out of sync across different platforms? Pinpointing these issues helps determine what needs improvement and which integration method will offer the best solution.
2. Mapping and Preparing Data
Different businesses format and store their data differently. For example, one company might list dates as MM/DD/YYYY, while another uses DD-MM-YYYY. It’s important to analyze how your data is structured before integration to make sure it can be converted into a standardized format that your partners can use.
3. Choosing the Right Integration Technology
After mapping your data, it’s time to pick a B2B integration technology. Most businesses use one of three main options: EDI, APIs, or ETL. The right choice depends on how your company needs to connect with its partners and their systems.
EDI (Electronic Data Interchange)
EDI is the foundation of most B2B integrations, enabling businesses to exchange documents like purchase orders, invoices, and shipping notices in a standardized, digitized format. EDI eliminates paper-based processes and manual data entry, which reduces errors, speeds up transactions, and improves consistency across different systems. EDI is specifically designed for business document exchange, following strict formatting standards (such as ANSI X12 or EDIFACT) that guarantee compatibility between trading partners. However, EDI can be less flexible than APIs, with rigid standards that require you to conform to predefined document structures.
APIs (Application Programming Interfaces)
APIs allow for real-time data exchange between various applications so that systems can communicate instantly instead of needing to wait for scheduled updates. This makes them ideal for businesses that need up-to-the-minute info, such as an online store syncing inventory with a warehouse or a banking app retrieving the latest account balance. Unlike EDI, which follows strict formatting rules, APIs are more flexible and allow you to customize integrations based on your specific needs. However, APIs require both systems to be actively connected and may involve more complex setup and maintenance, especially when dealing with different software providers or security protocols.
ETL (Extract, Transform, Load)
ETL, which stands for "Extract, Transform, Load," is another method businesses use to share data with each other. It works by extracting data from its original source, converting (or "transforming") it into a format that the destination system can process, and uploading it there. ETL is especially useful when businesses and their trading partners use different types of software that aren’t directly compatible, and it's good for processing large data transfers in batches. But unlike EDI and APIs, it doesn’t provide real-time updates. Instead, ETL works on a set schedule — once daily or once hourly — which is often not fast enough for many businesses.
4. Implementing the Integration
After choosing between an EDI, APIs, or ETL solution, the next step is to connect it to your business's internal systems. Here's where important data — such as inventory levels, invoices, and purchase orders — begins to move automatically between your software and your business partners' systems. It's important to note that the specifics of the setup process will vary depending on whether you're using a cloud-based provider or an on-premises solution for things like security configurations and data mapping.
5. Monitoring and Managing the System
Once your integration has gone live, it's important to track its performance to make sure everything is running smoothly and, if not, identify and fix any issues. You may also need to update or expand your integration to support new partners, systems, or evolving technology down the line.
3 Benefits of B2B Integration
Beyond automating transactions, here’s how modern supply chains benefit from B2B integration:
Improved Efficiency and Productivity
By automating data exchanges, B2B integration reduces manual tasks, data entry errors, and processing times. Businesses save on labor costs, and employees are able to focus on more important tasks.
Stronger Communication and Collaboration
B2B integration improves data exchange between trading partners, making it easier for businesses to work together across different time zones and global markets. Thanks to automated, real-time updates that provide accurate and timely information, companies minimize delays, communicate better with each other, and, in turn, build stronger partnerships.
Greater Agility and Scalability
With B2B integration, companies can automate processes, which makes transactions faster, more flexible, and scalable. As businesses grow, with the right integration approach, their systems can handle increasing data volumes, onboard new trading partners quickly, and adapt to supply chain changes with ease.
2 Types of B2B Integration
There are two main types of B2B integration, data-level and people-level. Each serves a different purpose, but together, they help businesses run more smoothly by automating routine tasks while allowing people to step in when decisions, problem-solving, or collaboration are needed.
Data-Level Integration
Data-level integration refers to everything we’ve covered so far. Companies use data-level integration, whether EDI, APIs, or ETL, to process large amounts of information — such as purchase orders, invoices, and inventory updates — quickly, efficiently, and automatically. It eliminates the need for manual data entry, which reduces human error and speeds up business transactions.
People-Level Integration
Data-level integration takes care of routine tasks automatically, but some situations require a human touch, such as when something doesn’t go as planned or a process is too complex to run on autopilot. People-level integration often involves collaboration tools like messaging apps, video calls, and shared documents, which help business partners stay connected in real time so they can tackle issues as they come up.
People-level integration also uses predictive analysis tools that examine data to help team leaders make smarter choices and custom workflow management platforms like Asana or Trello to make sure everything stays on track across different departments and companies.
B2B Integration Tools
Businesses have several B2B integration tools to choose from, depending on their needs, company size, and level of technical complexity. Here’s a quick overview of three popular options:
Orderful
Orderful is a cloud-based EDI platform that, unlike traditional EDI solutions, combines EDI and API capabilities. With just one integration, you're set to send and receive data with any supply chain partner, no matter what EDI or API system they use. This removes the hassle of dealing with complex middleware and makes the data exchange process faster and easier. Key features include:
Pre-built B2B integration: Reduces implementation time for faster connections with trading partners.
Single API and EDI integration: Integrate once and gain immediate access to your trading partners.
Real-time transaction tracking: Monitor the status of transactions and resolve errors quickly.
Best for: Businesses wanting a modern, cloud-based solution with minimal setup time.
IBM Sterling B2B Integrator
IBM Sterling B2B Integrator is designed for larger enterprises that work with a high volume of trading partners and need to process, transform, and convert data into various formats that are compatible with many different systems. Noteworthy features include:
Wide format compatibility: Supports multiple EDI standards, XML, and proprietary data formats.
Scalability: Suitable for high-volume data exchanges and complex integrations.
Best for: Bigger companies with advanced integration needs that require multi-format data transformation.
Workato
Workato focuses on app connectivity, data integration, and process automation across supply chains. Unlike the other tools, it integrates with a broader range of applications, including ERP, CRM, and cloud-based business tools. Key features include:
Extensive integration stack: Connects multiple business applications beyond traditional EDI.
Customizable automation: Allows businesses to create workflows tailored to their needs.
Best for: Small and mid-sized businesses (SMBs) that need agile, customizable integration solutions.
Successful B2B Integration Examples
B2B integration allows businesses to automate their supply chain processes, improving efficiency and accuracy. Here’s a closer look at how major corporations — Walmart, Coca-Cola, FedEx, and Amazon — use EDI to manage their B2B transactions.
Walmart and Coca-Cola: Automating Retail Orders
Order placement: Walmart prepares an order for Coca-Cola products using its ERP system. The system converts the order details into an EDI 850 (Purchase Order) and prepares it for transmission.
Purchase order transmission: Walmart sends the EDI 850 to Coca-Cola using a secure transmission protocol like AS2. Coca-Cola’s system receives, decodes, and processes the order automatically.
Order acknowledgment: Coca-Cola responds with an EDI 997 (Functional Acknowledgment), confirming that Walmart’s order was received. To provide additional order details, Coca-Cola may also send an EDI 855 (Purchase Order Acknowledgment), updating Walmart on the order fulfillment status.
Shipping notice: Once Coca-Cola processes the order, it generates an EDI 856 (Advance Ship Notice/ASN). This document informs Walmart about the shipment details, including tracking information, expected delivery time, and package contents. Walmart responds with another EDI 997 to confirm receipt of the shipping notice.
Shipment integration: When Walmart receives the EDI 856, its system automatically updates inventory records and prepares for the shipment’s arrival.
Invoice and payment: After Coca-Cola ships the order, it sends Walmart an EDI 810 (Invoice) for payment. Walmart processes the invoice and sends an EDI 997 to confirm receipt. Walmart then issues an EDI 820 (Payment Order) to Coca-Cola, signaling that payment has been made. Coca-Cola, in turn, confirms receipt of payment with an EDI 997.
FedEx and Amazon: Automating Logistics and Shipping
Order placement and shipping request: When a customer places an order on Amazon, Amazon’s system generates shipping details in its ERP platform. Amazon sends an EDI 204 (Load Tender) to FedEx, requesting shipping services. This document includes the pickup location, delivery destination, and package details.
Acknowledgment and shipping confirmation:FedEx responds with an EDI 990 (Response to Load Tender) to confirm acceptance of the shipping request. Amazon’s system logs the confirmation and schedules the order for pickup.
Tracking and status updates: As FedEx transports the package, it sends real-time tracking updates to Amazon using an EDI 214 (Transportation Carrier Shipment Status Message), which includes estimated delivery times, transit locations, and any potential delays. Amazon’s system automatically syncs this information, so customers can track their orders in real time.
Delivery confirmation:Once FedEx delivers the package, it sends an EDI 210 (Freight Invoice) to Amazon, which lists shipping costs and confirms that the order was successfully delivered. If there’s an issue with the invoice, FedEx may issue an EDI 824 (Application Advice) to notify Amazon of any corrections needed.
Payment processing: After confirming delivery, Amazon processes payment and sends an EDI 820 (Payment Order) to FedEx. FedEx then confirms the payment transaction with an EDI 997 (Functional Acknowledgment).
Simplify B2B Transactions with Cloud-Based EDI
For business owners, B2B integration offers a way to exchange data faster, reduce errors, and improve supply chain coordination. Cloud-based EDI takes this a step further by eliminating the need for costly hardware and in-house maintenance, making it easier to connect with trading partners and scale operations wherever and whenever you need to. Talk to an EDI expert today to learn more about all that a cloud-based EDI solution can do for you.
