"XML-EDI" still has a way to go

How fast can companies automate business-to-business transactions over the Internet? One answer that is emerging for both "" and bricks-and-mortar companies is the eXtensible Markup Language (XML).

This outgrowth of the Standard Generalized Markup Language (SGML) lets designers create customized tags for Web documents, enabling the exchange of data between business processes and applications without regard to source or destination platforms. XML seems to hold great promise for both intra- and intercompany application integration, and as a key enabler for e-commerce. Viewers will watch XML adoption in Electronic Data Interchange (EDI), the traditional area of intercompany data distribution.

In the business-to-business realm, EDI has been the long-standing technology and methodology for the automated exchange of business documents. While effective, EDI is geared toward batch-processed, high-volume, high-end transactions among trading partners that have long-term relationships. It also tends to be complex, with a cost barrier for many small- to mid-sized companies.

Meanwhile, XML promises to lower the barrier to entry for trading partners, and to enable real-time transactions for companies with smaller volume needs and more transient partners. It is also giving rise to new types of business-to-business activity, such as catalog-based applications and Web portal-based trading communities.

"The uptake of Java was pretty phenomenal in terms of mainstream usage, but with XML we're seeing even faster adoption," said Marie Wieck, director of XML technology at IBM Corp. IBM is one of the key movers in the XML space, and offers one of the leading XML parsers. "XML builds on the open standards of the Internet, like HTTP, HTML and Java. XML is really providing the remaining piece of the puzzle to provide an open standards definition for cross-platform data sharing," said Wieck.

Are the days numbered for traditional EDI and EDI systems? Well, if business-to-business transactions were solely about data interchange and integration, then XML might live up to its hype (by some) as the "new" EDI. But at the heart of automated business-to-business transactions are policies and procedures, a strength of EDI.

XML technology needs to leverage and extend the best of EDI, said Tim Sloane, an analyst at Aberdeen Group, Boston. "The processes in place around EDI are going to continue to be important, even more important as we move to XML. All the goodness of EDI will be embraced by the new XML implementations," he said. For example, said Sloane, the definitions of business forms used by the two EDI standards groups, ANSI X.12 in the United States and Edifact in Europe, are being used by the various XML groups.

EDI addresses not only what a document should consist of, but also the process by which that document moves throughout the supply chain. Said Sloane, "The criteria to judge an XML supplier is 'Have they already learned about the process flows necessary to do online bus transactions?' That [knowledge] would've been acquired through EDI." XML suppliers, he noted, must have an "understanding of how you acknowledge receipt of a purchase order, how you send back errors, and how you tie into your infrastructure and your partner's infrastructure. XML doesn't make any of the policy and process issues go away."

In addition, companies with significant EDI investments will want to leverage existing systems and process knowledge, while also extending into new areas of business-to-business trading. XML will allow them to do this, note industry observers. "The traditional EDI market is more one of a procurement model, with stable partnerships and long-term commitments, with a certain amount of overhead required," said IBM's Wieck.

"A lighter-weight model, and for more transient partners, is something people have been [seeking] for some time; that was the thrust of doing EDI over the Internet," she said. "That's now being superseded by 'XML-EDI.' We will see new connections to more partners, more transient relationships, and we'll start to see offerings in the XML-EDI space. But I don't see anyone walking away from their EDI investment."

Standards status

Many efforts are under way to address some of the policy and business process issues that XML must conquer. The World Wide Web Consortium (W3C) released the XML 1.0 specification in February 1998 as the first recommendation for XML. Currently, the XML Schema Working Group is addressing the means for defining the structure, content and semantics of XML documents. A schema indicates what tag and tag names are required in a document so an XML parser can understand what the fields are; both parties in a transaction have to understand those names. In addition to the W3C, there are numerous industry groups working on XML schemas.

In the e-commerce arena, there are two leading standards contenders. One is Common Business Library (CBL) 2.0, an open XML specification for the cross-industry exchange of business documents from Commerce One, an e-commerce software provider in Walnut Creek, Calif. CBL 2.0 enables the mapping of data elements between XML and the international EDI standard, UN/Edifact. CBL is being released in three different schema languages: Microsoft's XML Data Reduced (XDR), the W3C's XML Schema Definition Language (XSDL), and Commerce One's Schema for Object-oriented XML (SOX).

The other leading standard is Commerce XML (cXML), spearheaded by Ariba Inc., Sunnyvale, Calif., in concert with other leading vendors. The first version of cXML (Version 0.91) launched in mid-May 1999.

There are also framework initiatives underway, such as Microsoft's BizTalk, that, according to Aberdeen's Sloane, "take an active role in helping companies automate the process; not just what is the schema and data to be exchanged, but what is the process on either side, and what are the business policies to be implemented." This, Sloane added, is "kind of like EDI." BizTalk also includes a repository where suppliers can submit BizTalk-compatible schemas. Yardley, Pa.-based Prophet 21, for example, a supplier of distribution-centric enterprise applications, recently introduced wholesale distribution industry-specific XML schemas to the repository.

Other industry initiatives working on XML include: OASIS, a non-profit international consortium founded in 1993 to advance the open interchange of documents and structured information objects; UN/CEFACT, the United Nations body that developed the Edifact standard for EDI; RosettaNet, a non-profit organization trying to set standards for Internet-based supply-chain transactions; CommerceNet and its eCo Framework Project and Working Group; and the Open Applications Group (OAG).

Recently, OASIS has formed a strategic relationship with OAG. The consortium will also make OAG XML Business Object Documents available on the site.

For EDI veterans, it is déjà vu all over again. "For those of us around this business in the early '80s, you saw a similar evolution of activities around developing standards in the EDI world [just] as you're seeing in the XML space," said Les Wyatt, vice president, worldwide product marketing, Harbinger Corp., Atlanta. "You're seeing a lot of very specific organizations coming up to establish a unique standard for their own set of constituents, like RosettaNet. You will see some of that thrashing in early stages of XML."

While standards are still in flux, vendors rolling out XML products and customers looking to implement XML applications should avoid locking themselves into a particular implementation, say industry observers.

"Our thinking is that there will be thousands of DTDs and schemas," said Bob Bickel, senior vice president, development, Bluestone Software, Mt. Laurel, N.J. [DTD, or document type definitions, is a file associated with SGML and XML documents that defines how the markup tags should be interpreted by the application presenting the document.] "We want an infrastructure that will accommodate them all. Any DTD that tries to do it all won't do it well. There will continue to be a divergence in DTDs, and that's a good thing," he said.

For businesses looking to start working with XML tools and solutions, Bickel advises: "Prototype and learn; start small and grow from there. There will continue to be a lot of change in the industry. Schemas will get approved by the W3C and, when they do, a lot of existing DTDs will get upgraded to schema format. Take advantage of opportunistic types of things today, but don't lock yourself into a particular implementation."

Starting now

It seems no one is waiting for standards to standardize, however. Software suppliers, both established and start-ups from just about every walk of the industry -- enterprise applications like ERP, data mining, Enterprise Application Integration (EAI), development platforms and tools -- are all beginning to roll out products and to XML-enable existing offerings.

One new product category emerging is the XML server. While it is a promising new technology, it still represents a "roll-your-own" development experience in comparison to established EDI.

Reliance National Insurance, New York City, is using Bluestone's XML server suite to connect PalmPilots for internal use, but sees the longer term implications for its trading partners, said Fred Kauber, former director of enterprise applications and e-commerce. (Kauber was recently appointed vice president of technology and operations at start-up Clickmail in Manhattan.)

Kauber said that while Reliance may be looking at XML as a potential replacement for EDI, until standards are in place to leverage economy of scales, "more realistically, XML is a platform for enterprise application integration within the company, and then maybe to look externally."

With the Bluestone tools, Reliance was able to put a query interface from network-connected PalmPilots to the company's phone directory. Longer term, Kauber said the company plans to use XML to enable Reliance customers, who are insurance brokers, to use a lightweight computing platform that will allow two-way communication with Reliance for submitting quotes over the Internet.

EDI currents

XML is enabling new types of business-to-business applications. webMethods, Fairfax, Va., made news recently, announcing a deal with heavyweight SAP to provide the transactional infrastructure for the new marketplace, which will connect buyers and sellers in a fully integrated value chain over the Internet.

Another webMethods customer is Washington, D.C.-based Tech Trader Inc., which designs and operates portal-based, industry-specific online trading communities. The company is building an XML infrastructure in order to apply its technology to different vertical industries.

Its first community, packaginginsider. com, is set to launch in October. "The webMethods' tool allows us to pull data, from disparate sources, from a server. Our learning curve on it was minimal," said Neil Condon, Tech Trader's vice president of sales. "And the beauty of it is that you don't have to have the webMethods client software. In the packaging industry there are 5,000 potential customers. We've found they have their information in everything from basic spreadsheets to high-end, back-end accounting systems."

webMethods' CEO Phillip Merrick differentiates the webMethods approach by calling it an "integration" server, as opposed to a Web server or an application server. "Folks like the OAG have talked about the need for an integration server. An application server hosts the business logic; we focus on the system-to-system aspects -- I want my R/3 system to inject orders into your order-entry system. Integration servers are built from the ground up to enable enterprise-to-enterprise communications. In addition to XML data mapping, we also provide robust security," he said.

Greg Campbell, Tech Trader's CTO, likes the fact that webMethods also enables various levels of integration, from grabbing documents from a Web site to connecting to ERP systems. webMethods also maps between the various XML schemas, so no back-end systems changes are required of trading partners.

Targeting the EDI base

While there are many industries, such as packaging, that are not big users of EDI, long-standing users of EDI will want to take their EDI documents and get them into XML format. These companies, among others, are the target of start-up Netfish Technologies Inc., Santa Clara, Calif.

Netfish recently submitted a BizTalk-compatible schema for ANSI X.12 EDI documents. The schema, which was submitted to the BizTalk repository, is shipping in Netfish's XML Data Interchange (XDI) suite of products. The suite consists of the XDI Developer, including the XDI Mapper, XDI Adapter, XDI Converter and XDI Forms Designer; plus the XDI Server and XDI Client.

"The first thing people will want to do is take existing EDI documents and send them in XML format. Making XML BizTalk-compliant schemas available will smooth the transition for EDI users," said Gary Kinghorn, director of marketing at Netfish. "We've mirrored the mission-critical requirements of EDI systems in our system. For example, any EDI or document exchange system requires integration with an ERP system or a back-office data repository, and then converting that into a format for communication. In an EDI system, you have mapping software like [TSI's] Mercator. We have those mappers for the major ERP systems that we created ourselves. Our server mirrors an EDI gateway and some features you'd find in value-added networks."

Veteran EDI suppliers are also moving forward with XML. Harbinger Corp. recently announced that it will support the BizTalk framework, and will integrate it into new products from its Harbinger Labs Division. Harbinger is also enabling its E-Commerce network portal to exchange BizTalk-compatible XML documents, and plans to support the BizTalk Framework across its TrustedLink family of mapping and translation software products. Harbinger will also work with Microsoft to establish standards, incorporating XML schema and guidelines, for use with online catalog data management systems.

"You can do a lot of things in the Web environment that EDI doesn't have the flexibility to do," said Harbinger's Wyatt. "There are a lot of applications for XML, but they are high-volume, simpler transactions with less business rules -- not the complexity that you've seen in traditional EDI."

Wyatt said Harbinger will demonstrate XML capability on its desktop product at its user conference in November. And by the end of the year, the network translation tools will have XML capability. Wyatt said the company may support other proposed standards going forward in addition to BizTalk. Harbinger is a member of RosettaNet, and Klaus-Dieter Naujok, Harbinger's director of messaging and technology, has been selected by the United Nations body for Trade Facilitation and Electronic Business and OASIS to chair a working group developing an XML framework.

Harbinger also has a relationship with San Ramon, Calif.-based OnDisplay Inc., which provides tools for e-business portals. Wyatt said Harbinger will use OnDisplay tools in its catalog business, "as well as an EAI tool alongside our translators. We're also looking to use some of their technology inside the environment to provide XML server capabilities."

Another partnership between a young XML supplier and a veteran EDI supplier is the alliance between webMethods and Sterling Commerce. Sterling Commerce is reselling webMethods' products as part of its Gentran solution. "We view [webMethods'] technology as complementary to what we're doing," said Brad Warnick, Web product manager at Sterling Commerce. "The Gentran server's core strength today is as an EC gateway/broker; translation is a big part of that. [webMethods'] strength is the ability to integrate real-time with Web sites and other applications across the Internet. By taking the best of both worlds, you have a stronger capability.

"For example, one use of webMethods is to aggregate data from Web sites," explained Warnick. "Say a customer is putting up a procurement application; they want to pull in data from suppliers and aggregate that in a back-end application that employees can use to order goods. webMethods automates and facilitates that kind of integration. The Gentran server is already configured and integrated with the back-end system. You can extend that aggregation without having to reinvent back-end integration. You can extend the current infrastructure to accomplish new business processes."

In addition to the webMethods partnership, Sterling Commerce has integrated XML syntax directly into its message broker. "You can take XML, EDI or flat-file data and translate it natively into other formats, with or without webMethods," said Tom Crable, director of product management for the Gentran family. "We think XML is going to be the format people are going to want to use, whether it's for real-time interaction with an application or not -- especially for groups like RosettaNet, which are doing traditional EDI implementations but using XML as the syntax."

Crable said Sterling's traditional EDI customer base is expressing an interest in XML, but they are still largely in the "looking" phase. "We're seeing companies doing traditional EDI looking to deploy, I hate to say new and improved, but more sophisticated applications with XML syntax, with some real-time interaction," Crable said.

A huge strength of XML, he noted, is to take a business document and, using an XML stylesheet, make it accessible on the Web. "It gives you the ability to extend normal, direct EDI application integration by providing things that are more customer or user friendly."


In the near term, both Harbinger's Wyatt and Sterling's Crable see EDI as the bridge between new business-to-business, XML-centric applications such as portal-based communities and catalog management, and legacy infrastructure -- especially with so many fragmented and industry-specific XML initiatives ongoing. "We're not an advocate of any specific business document format," said Crable. "We hope there's 10 or 15 people [who] require translation. We see ourselves in the role we've always been in: We'll take data in any format and translate it to what's required for your application. We're pretty sure everybody's not going to jump on board with XML at the same time. Our strength is to centrally manage different formats, and let our customers do what makes sense for them."

Crable added that XML also has some baggage. "One, it is so verbose; a [purchase order] in EDI format will be 10 times as small as the corresponding document in XML. As network speeds increase, bandwidth will be less of a problem, but there will still be translation issues," he said.

Moreover, added Aberdeen's Sloane, XML alone will not be the answer for automating business-to-business transactions. "There's always the allure that technology will give you some panacea, that it will make everything easy," said Sloane. "But the fact is that business processes are difficult and complex, and they vary from relationship to relationship. No amount of technology will make it easy if you don't already know what your policies are. The worst possible scenario is a company that automates its bus without business rules."