|By JP Morgenthal||
|June 15, 2000 12:00 AM EDT||
The term e-commerce (or e-anything for that matter) is now recognized by corporate executives and customers alike as denoting a new frontier. Here services like customer support, online purchasing and simple information retrieval can provide the gold standard of a global consumer society: instant gratification.
Remote services are nothing new: for years, hundreds of businesses have successfully shared and exchanged information with each other and their consumers, using a variety of media from pigeons to ponies. However, the high level of necessary human involvement have traditionally kept return on investment (ROI) on these types of services to a minimum, often with the result that companies built only limited infrastructures for such services.
The e-commerce revolution began not in the 1990s, as reports in the mainstream media would suggest, but in the 1960s, when the introduction and evolution of EDI (electronic data interchange) fundamentally altered the way large corporations did business. Originally EDI had an impact on large corporations only. Small- and medium-sized corporations were left out of the party, because the cost of implementing and maintaining EDI systems and conducting EDI transactions was high. Traditionally, EDI occurs using special ISPs - Value Added Networks (VANs) - that charge on a per-transaction basis.These charges can prove prohibitive for smaller corporations. EDI software and personnel can also prove costly for companies to acquire and retain.
The introduction of hypertext technologies to leverage the Internet has ushered in a second phase in e-commerce. Lured by the near-ubiquity of customer access and the lower costs of HTTP-based systems, large and small corporations alike have been implementing business-to-customer e-commerce initiatives. But the problem that EDI was created to address - the larger challenge (and larger market) of business-to-business e-commerce - has remained unsolved by HTTP technologies. Until now. Like the hub of a wheel whose spokes have been moving inward, XML finally provides a means for unifying disparate systems and creating true information integration among businesses.
With a means of integration now available, the focus shifts to the information being shared. Here, with regard to e-commerce between businesses, the same problem exists whether you're using EDI and X12 or the Web and XML. This problem is one of semantics, not syntax. That is, businesses need to agree on common meanings for data in order to share and exchange it.
Large corporations have spent years trying to settle on standardized EDI vocabularies. The specter of this laborious effort recurring in the XML space is one of the most commonly noted reservations about XML. Fortunately, the semantic vocabularies of the numerous EDI libraries, as well as the legacy metadata of corporations, provide excellent places to start standardizing for XML. We can expect that the judicious reuse of existing vocabularies, in tandem with mapping tools, will enable XML-based solutions to skirt the time-consuming consensus-gathering process on which EDI-based systems have depended.
The next thrust in business-to-business e-commerce will be revisiting legacy applications to extract their rich metadata, then combining it with outgoing electronic communiquŽs to trading partners. For example, current EDI standards are highly compressed messages that contain critical business transaction data. By reexamining them and injecting them with human-readable terms - the metadata - we create a new and more powerful representation of each message. We can thus provide increased value along the processing chain by allowing humans as well as machines to:
What Is Metadata?
Traditionally, metadata is defined as data that describes other data. For example, data within a purchase order may include a price, such as 12.94. Currently we allow our trading partner relationships to define the context against which this number will be evaluated. When dealing with our U.S. partners, we'll assume we're discussing U.S. dollars, and when dealing with our French partners, we may assume 12.94 is French francs. In this case U.S. dollars and French francs are metadata that help define how to interpret a basic decimal quantity. Due to early limitations in computing, we had to settle for allowing the trading partner context to define how to interpret a piece of data, such as price. But with advancements in technology, it's now reasonable to precisely state metadata and data within the same purchase order document.
Listing 1 shows a sample EDI X12 850 purchase order.
To the untrained eye this purchase order is extremely difficult to understand. The reason is that the fields have all been labeled with mnemonics that only partially represent the data. Yet EDI is ripe with metadata: it's trapped inside the implementations of EDI systems within companies. By translating this document with reference to existing repositories of meaning, we can re-create it in reusable form.
To illustrate, Listing 2 provides a portion of a transformed document in which the metadata has been reinstituted. This one segment of the original EDI document can now be read and processed more easily by humans and machines alike.
The Impact of XML
Like many new Internet technologies, XML has received generous media attention that's as likely to confuse as to excite. However, many corporate managers aren't taking the wait-and-see attitude they've adopted in the past toward other evolving technologies: there's little hesitation over whether XML is just a fad or here to stay. The reason so many people are jumping into the XML pool with both feet is that there's clear recognition that XML provides a solution to some of the most pressing data processing problems of the twenty-first century.
As already discussed, there are two key factors for the robust exchange of information between businesses, factors that are especially critical given the general industry desire to move toward an anonymous exchange environment. The first is the need to capture and encapsulate data with its metadata so that both are readily available in the same location. The second is the need to provide a common syntax that can also express semantics - the meaning of the contained data elements. XML supplies a solution for both requirements.
The example of the transformed EDI document in Listing 2 uses XML to represent the combined set of data and metadata. Because XML is a widely accepted syntax for which many products are now starting to incorporate support, it becomes easier for people to make use of this data on a grand scale. And because XML is a hierarchical representation, it incorporates context and metadata simultaneously, which provides us with semantic value. Hence, XML offers three big wins for e-commerce:
1. XML enables companies to deliver a single package that contains data and the information necessary to process it.
2. Wide availability of XML tools, as well as XML's obvious simplicity, makes it possible for small- and mid-size businesses to participate in XML-based e-commerce.
3. The combination of the first two wins delivers a third win, which is increased competition among trading partners. This results in better customer service and pricing overall.
Throughout this article we've discussed technical matters, such as how metadata assists in data processing and why XML provides an excellent representation of data to exchange with our business partners. These technical issues, however, are simply a means to an end, which is a business-to-business e-commerce environment that features low barriers to entry as well as uniform standards for data exchange. Gathering and using existing legacy metadata with XML will increase competition and ultimately provide the opportunity to deliver goods and services at a lower cost with higher quality.
There's a commonly held belief that only large corporations benefit from the automation of the supply chain, and that small- to mid-size businesses won't reap the rewards of investing in e-commerce solutions to interact with these large corporations. Such opinions are usually based on observations of the existing large-scale EDI implementations that drive most of today's business-to-business e-commerce. With the advent of XML-based business-to-business e-commerce, however, these perceptions will change rapidly. Even small- to mid-size businesses will quickly realize that by joining the pool of trading partners that support XML-based e-commerce standards, they too can purchase lower-cost, higher-quality goods and services.
And the landscape of e-commerce will change forever.
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