Tearing Down the Tower of Babel

Whether you're ready or not, new Internet language standards will dramatically affect the way your company does business and how you connect with your trading partners.

[From iSource Business, June 2001] "It's a Tower of Babel right now." That's how AMR Research Senior Analyst Amy Hedrick describes the state of affairs with B2B standards today. "There are still all the EDI [electronic data interchange] standards out there, in all their glory," she says. "And then, on top of that, literally hundreds of variants of XML [Extensible Markup Language] are springing up. It's not an easy landscape to look at." And because there are so many different elements that currently make up the standards, let's take a look at the major ingredients in this alphabet soup: EDI, XML, OBI (Open Buying on the Internet) and UDDI (Universal Description, Discovery and Integration).

Whither EDI?

EDI, one of the original digital standards, is antiquated according to Internet time, but don't tell that to Frank Campagnoni, chief technology officer and vice president of marketplace solutions at GE Global eXchange Services (GXS). "EDI is going to be around for a long time," he says, explaining that large corporations have invested heavily in EDI since it debuted in the 1980s, and companies continue to derive value from that investment.

Alan Duckworth, director of business development for Dun & Bradstreet's supply chain practice, agrees with Campagnoni's assessment. At the same time, he says, three imperatives are driving the business case for migrating from EDI: the need to find ways to make legacy systems "talk" to one another, the need to integrate front-end systems to back-office systems, and the need to integrate and interoperate with as many trading partners as possible. This last point is key. While EDI provided one-to-one connections between partners through a pay-as-you-go value-added network, the availability of inexpensive, real-time communication over the Internet and the resultant drive for increasing efficiencies are forcing companies into a "many-to-many" environment where information must flow fluidly throughout the supply chain among numerous participants, including small and midsize enterprises that couldn't afford EDI.

As a result, companies have sought on their own or collaboratively to establish standards that would allow them to operate in this new environment. The most commonly discussed standard is XML, while OBI and UDDI also deserve mention.

The Many Flavors of XML

XML is a child of the Internet Age. The World Wide Web Consortium (W3C), an internet standards organization, began working to define XML in 1996, and the group published the first version of the specification in 1998.

XML is a standard for describing information, and its promise is that it will create a vehicle to share information that is easy for computer systems to assimilate. Originally seen by some as an answer to the splintering of EDI into many industry-specific standards, XML quickly followed the same path toward ratification as companies in various verticals pursued their own "flavors" of the standard. "We all thought XML was going to solve all the EDI woes and give us one standard," says Louis Blatt, senior vice president and general manager of the e-markets group at San Diego, Calif.-based Peregrine Systems. "But the problem is that you have as many flavors of XML as you did of EDI."

Take CIDX, for example. The Chemical Industry Data Exchange (CIDX) is an organization of chemical companies set up in 1985 to develop industry-wide guidelines for the ANSI X12 version of EDI used in North America. When XML came along, the industry moved aggressively to adopt the new specification without waiting for a final version of the standard to be universally accepted. But while CIDX was working on a standard for the industry, individual companies moved to take advantage of XML to establish links with suppliers and customers. According to Bill Graham, the lead for Eastman Chemical Co.'s program to make direct, XML-based connections with its trading partner, Eastman had sat on the steering team for the chemical standards organization and was active in developing the CIDX standards. However, the company chose not to lose its lead in connecting to trading partners while the standards caught up. "As an early adopter of XML technology and e-business, we had to choose whether or not to wait until the perfect standard came along, or to pioneer connections without them."

Basing its work loosely on early CIDX thinking, Eastman developed a set of standards for exchanging purchase order data using XML, and then established connections with trading partners that were willing to try a pilot program. By mid-2001 Eastman was exchanging purchase orders and sales orders, as well as simple, functional acknowledgements with 15 trading partners. For 2001, Eastman's agenda includes expanding the integration program to complete the purchase order loop, enabling purchase order changes and cancellations and eventually implementing the entire CIDX suite of purchase order solutions. Eastman's 2001 XML connections use the CIDX standards.

Bob Sutor, director for e-business standards strategy at IBM, believes that this type of diversification in the XML standard is to be expected because different types of companies need to communicate dissimilar types of information about themselves. "The kinds of questions you would ask of a trucking company are going to be different from the questions you would ask of a pharmaceutical company," Sutor says. But Sutor, Graham and others expect that eventually the many current versions of XML will converge into a handful of broadly accepted standards.

This anticipated convergence was expected to get a boost in May when the ebXML Messaging Specification was set to be finalized. The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) and the Organization for the Advancement of Structured Information Standards (OASIS, a non-profit standards group) began working in late 1999 on an 18-month program "to research and identify the technical basis upon which the global implementation of XML can be standardized." The goal of ebXML, according to OASIS, "is to facilitate open trade between organizations regardless of size by enabling XML to be used in a consistent manner to exchange electronic business data."

Finalization of the ebXML standard means technology suppliers can now release products that are able to speak ebXML-based standards languages, and businesses can begin implementing baseline messaging systems that work with these specifications, according to Laura Walker, OASIS' executive director. Walker expects that, in late 2001, technology providers will incorporate ebXML compliance, not just in high-end software like databases and servers, but also in common Web browsers, giving companies the ability to conduct complex transactions with their smallest trading partners as well as major corporate partners.

In the meantime, some companies are opting to outsource the entire standards issue by working with a third- party "data broker" to handle the translation of information between trading partners. Peregrine Systems, for example, operates a network, dubbed "Get2Connect.net," that can receive messages from one company in EDI or XML (among other languages), translate the messages into whatever B2B languages are spoken by the systems at that company's trading partners and transmit the information to the appropriate recipient. Similarly, GXS operates a B2B e-commerce network, linking more than 100,000 trading partners that conduct a total of 1 billion transactions annually in a variety of formats over the exchange. GXS' Campagnoni admits he's biased when he recommends using a centralized e-commerce service provider to communicate electronically with partners, but he points out that this model allows a company to offload the burden of keeping track of, and adopting, the latest standards. Another route is for companies to work with a B2B integration specialist, such as webMethods, which is helping Eastman Chemical make its data links with trading partners.

Buying into OBI and UDDI

Two more acronyms to watch: OBI and UDDI. OBI is a project of the OBI Consortium (OBIC), formed in 1996 at the initiative of a group of Fortune 500 companies to establish interoperable sets of process standards for handling maintenance, repair and operations-related transactions over the Internet. OBIC initially developed the standard to work with ANSI X12 and UN/EDIFACT (the EDI standard used outside North America), but the group released an XML-compatible version in February.

Fred Sollish, director of education and a former president of the Silicon Valley branch of the National Association of Purchasing Management, asserts that, with the XML-compatible OBI now released, companies can extend the usefulness of their EDI systems by adopting the open buying standard and taking advantage of the ability to work with suppliers' MRO catalogs. "Despite what you are going to hear, there are not a lot of effective XML systems available today for companies to do business," he says. "Using OBI, EDI processes can move forward, because it's very compatible with the EDI process."

OBIC continues to develop the standard and has turned over process outlines for services, invoicing and payments to a specifications group, with an additional functionality scheduled for release in the second quarter of 2001. Sollish says that group will maintain its support for EDI and XML as the standard evolves, and a version is planned for ebXML as well.

As for the UDDI, Dun & Bradstreet's Duckworth says that while it's often referred to as a standard, it is intended to function more like a Yellow Pages for the Internet. "UDDI is really just a set of databases where businesses can register their Web services as well as locate other Web services they may be interested in leveraging," he explains. "If UDDI gains acceptance, it will provide useful information about how to engage with other businesses and quickly identify the processes they use, such as EDI [or] OBI."

IBM's Sutor warns that standards are still a moving target. "We are probably about 6 to 12 months into what will be a two- to three-year process," he says. Campagnoni adds that new specifications will likely take shape first for those processes that are not already standardized, such as the "shopping basket" concept made popular by e-commerce. "I might be a little light in my EDI knowledge," he quips, "but to the best of my knowledge there is no EDI document to represent a shopping basket."

So what standards should you be using? AMR's Hedrick offers this advice: "Any companies' customers are the best benchmark. If your customers need you to do something, you'll do it. If enough customers insist you communicate using an XML-based form of communication, you'll make it happen."

[SIDEBAR:] Why the New Standard?

Adapted from information provided by Alan Duckworth, director of business development for Dun & Bradstreet's supply chain practice.

Since part of the promise of e-commerce is the ability to identify new trading partners and to source globally, the Internet medium demands the means to answer the questions "Who am I buying from?" and "What am I buying?" Because e-commerce is enabled by numerical identifiers and hampered by text descriptions containing inaccuracies and differences in presentation, companies make use of identification systems like Dun & Bradstreet's D-U-N-S Number (for identifying business) and the United Nations' UN/SPSC (for products and services).

The general acceptance of numerical identifiers for businesses and products has, in turn, tested the ability of the Internet to convey that data due to the limitations of HTML, the standard language used to present information on the Web. HTML describes the format of data, but not the content of the data, so when you are surfing the Web, you can't easily find data elements like business names, commodity and price; it also isn't easy to export that data to other applications. This limitation is a primary driver for the migration to XML. Within XML, every element is "self-describing," so programs can be written that can search from Web site to site, looking for data elements like business names, commodity and price. As those elements are encountered, they will identify themselves, allowing the information to be exported to various applications. XML provides a non-proprietary (that is, open) "language" that enables interactions up and down the supply chain.
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