New kid on the block

By Jessica Twentyman

Sometimes, the old ways work the best. Take, for example, electronic data interchange, or EDI. For several decades, EDI has enjoyed wide-scale adoption by providing basic exchange capabilities that have proved crucial to companies wishing to exchange purchase orders, invoices and other electronic documents with trading partners such as suppliers and customers.
And its popularity is hardly on the wane, despite the emergence of newer technologies, such as the extensible mark-up language, or XML.
“The current state of affairs in the B2B integration area remains dominated by the huge volume of EDI transactions that occur on a daily basis,” says Ken Vollmer, an analyst at IT market research company Forrester Research.
His discussions with leading B2B service providers, he says, indicate that the current volume of worldwide EDI transactions is more than 20 million per day, and accounts for a “significant” amount of worldwide commercial activity.
In the US, for example, more than one-third of the national gross domestic product (GDP) is directly supported by EDI transaction exchanges in the retail, manufacturing, financial, healthcare, food and beverage, logistics and pharmaceutical sectors.
“EDI transaction volume will continue to grow, though at a slower rate than other major alternatives,” he predicts. “EDI usage predates the other options by at least two decades, and that is the primary reason why this older technology has been so resistant to the wholesale replacement by XML-based alternatives.”
However, that doesn’t mean that newer alternatives do not have a vital role to play. Far from it. EDI transactions are very structured and difficult to change, and the high-end prices that EDI systems command often put them beyond the reach of all but the largest companies.
So what are the “other options” that Vollmer proposes? He divides them into three categories, all of which are projected to grow at a faster rate than EDI over the next several years: stateful XML; stateless XML; and flat file exchanges.

Stateful XML. These are XML-based transactions that maintain the state of the transaction within the confines of a larger business process. For example, in the high-tech electronics sector, RosettaNet Partner Interface Processes (PIPs) maintain the state of transactions until they are completed using the RosettaNet Information Framework (RNIF) message format. “In this environment, purchase orders executed within the RosettaNet environment are monitored until all of the individual items in the order have been received or canceled. The ‘state’ of each item (fulfilled, backordered, and so on) is maintained over time,” Vollmer explains. Stateful XML transactions will be required for a growing number of B2B process-oriented transactions, and they are projected to exceed the growth of EDI transactions over the next five years.
Stateless XML. This group consists of XML-based messages that adhere to industry-defined standards or proprietary standards agreed to by two trading partners. They do not maintain any state information and are similar to EDI from the perspective that they do not support any type of persistence. ACORD, which is used in the insurance sector, CIDX, which is used in the chemicals industry, and PIDX, which is used in the petroleum industry, are all examples of stateless XML messages. Universal business language (UBL) is another stateless, XML-based dialect that is being supported by OASIS, but has had little practical uptake.
Other. Comma-separated flat files are the main type of transaction in this group. The formats are decided upon by the trading partners exchanging them, and they follow no specific patterns, either inside or outside of vertical sectors. This area is currently experiencing the most growth, in spite of the limited standardisation that it supports. This level of growth is being driven by the need for enterprises to support B2B process improvement efforts in situations where proprietary, non-XML content formats are all that have been agreed to so far.

B2B technology vendors – particularly those with a strong heritage in EDI – are scrambling to keep apace with these changes, and with the increasingly sophisticated demands of their customers.
For example, last year, Sterling Commerce introduced a new Intelligent Routing Service to its Sterling Collaboration Network trading platform. This, say company executives, provides the flexibility of sending and receiving information in many different format types, not just the traditional EDI documents. Whether the document is organised in a structured or unstructured format, the Intelligent Routing service can route the document to the appropriate trading partner with efficiency and flexibility.
“Increasingly, businesses are trading more than EDI documents; they are trading XML, flat files, or documents from their back-end systems in an application format,” says Sterling Commerce CEO Bob Irwin. The Sterling Collaboration Network, he argues, enables a company to collaborate with more of their trading partners by sharing many different formats of data beyond just EDI files to reduce costs related to manual processes and speed and simplify collaboration, which builds stronger partner relationships.
Similarly, GXS’s Trading Grid platform combines the capabilities of established and proven EDI software and traditional private network connectivity with Internet technology and support for XML to deliver a complete electronic trading environment. The platform can be used to Exchange documents regardless of format, whether standards-based or proprietary, including EDI. These include XML (RosettaNet, ebXML), EDI (ANSI x12, EDIFACT, TRADACOMS) and proprietary software formats (spreadsheets, SAP IDOCS).
Other technology suppliers coming to the same recognition include Seeburger and Innovis, among others.
At the same time, Internet technologies are transforming EDI technologies themselves, allowing smaller companies to get involved. Earlier this year, for example, specialist fabric retailer Fabric Warehouse selected a new EDI system from Freeway Commerce to exchange invoices and orders with its suppliers in the UK and overseas.
The decision was made as part of an overall IT strategy to adopt EDI as a method of exchanging information for all trading partners. Freeway Commerce’s solution, meanwhile, was selected for its ability to achieve improved margins and increased efficiencies in the supply chain, using EDI made available via a secure web portal. That, according to Freeway Commerce executives, makes their solution not only lower-cost for the purchaser, but also more accessible to their trading partners.
One thing is clear: growth in the number and scope of B2B interactions is leading to increased volume across all major transaction types. EDI usage has a head start and therefore a large lead, but newer XML-based solutions will provide increasing levels of support for more complex, process-improvement-related transactions. The most important point is that both the older and newer technologies will co-exist in most organisations, with each doing what it does best.

Case study: Kimberley Clark

KIMBERLY-CLARK Corporation is a $14 billion global consumer packaged goods company, most often associated with such popular brand names as Kleenex tissues and Huggies nappies.
In recent years, the company found itself performing a balancing act between its foundation in EDI and emerging technologies based on extensible markup language (XML). While EDI was the quickest way to get started with synchronising data among its many retail partners, it could not solve all of Kimberly-Clark’s B2B challenges, nor handle all its data requirements.
Getting its products on retail shelves quickly and efficiently is of paramount importance to Kimberly-Clark. In order to maintain strong ties with its retailers and other customers, it was apparent that it must secure a rapidly deployable and dependable solution to handle EDI and XML side-by-side. The need was especially acute in the face of growing customer mandates regarding UCCnet XML standards and amid the steadily gaining influence of XML-based solutions.
“A lot of our business is still conducted through EDI, so a complete switchover to XML isn’t practical or cost-effective,” said Phil Nickolai, team leader, e-business infrastructure at Kimberly-Clark. Although the company already had augmented its classic EDI network with Internet-based EDI (EDI-INT), numerous challenges remained.
“We had an ongoing business need to do a more effective job of synchronising data with our customers who have had experiences ordering in the wrong quantities, stacking patterns and prices all stemming from data laced with obsolete information,” said Larry Roth, Consumer Supply Chain, Kimberly-Clark. “UCCnet opened up the door to industry standardised synchronisation and eliminated most of these problems both now and in the long run.”
However, taking full advantage of UCCnet meant coordinating input/output in the correct formats, tables and data elements along with the other technical rigors of orderly communication. Such an effort would demand more work and expertise than Kimberly-Clark was prepared to handle on its own.
There were two major drivers that pointed Kimberly-Clark to B2B integration technology supplier Sterling Commerce, according to Nickolai. One was that his company has had a long and successful relationship with Sterling Commerce in EDI. “Sterling Commerce has provided us with good products and we have leveraged a lot of our company communications on EDI,” Nickolai said. “For another, they have a tool in Gentran Integration Suite that fits cleanly into our existing Gentran environment. We decided to take advantage of the relationship and the software suite to implement something we knew would meet the business needs.”
With the application solution nailed, Kimberly-Clark embarked upon a six-week course of implementation. “From a project management standpoint, we were impressed,” Nickolai said. “The project was delivered on time, and, quite frankly, when you’re going from ground zero to what we have now, six weeks was a very rapid deployment.”
Kimberly-Clark implemented Gentran Integration Suite on the Windows platform with an adapter to publish to UCCnet on short notice, according to Roth, with the potential for connections to more key data pools as needed.
“As we got deeper into synchronisation issues with EDI, we found there were more data elements necessary that are only possible through XML,” said Nickolai “That’s one of the reasons we shifted directions slightly, and that required a connection through Gentran Integration Suite with an on-ramping adapter.”
Kimberly-Clark is gratified with the results thus far and sees significant value in being among the first major companies to implement data synchronisation through UCCnet. “We saw value in the long run and voiced our support for UCCnet well before we were able to actually implement it,” Roth said.
The e-business infrastructure team also is looking for Gentran Integration Suite to help move forward other collaborative processes, including the ability to generate and deliver CPFR (collaborative planning, forecasting and replenishment) XML scheme as requested by major retail hubs.