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© 2006-2007 Electronic Commerce, Inc.
by Susan Stecklair
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Friday, April 13, 2007
Real World Requirements
Following is my recent response to several entry on a EDI blog:
Hi Michael & EDI-L'ers --
I'll add my 2 cents for the reasons that businesses trivialize the understanding of business in an B2B implementation. It
is no mystery to me. I've been researching the early days of ebXML, RosettaNet, and the 2000 other XML "standards" bodies.
The early XML zealots made the case -- and some still do -- that their respective committees have brought together all the
experts from hundreds of companies and the business issues have been resolved -- by committee. All you need to do is register
your company at an internet registry, use their business models, & suppliers/customers can come to you & "plug & play" the
B2B process. What many EDI/ebiz folks do not understand is that this message was -- and still is -- conveyed to senior management
of a very large number of companies and by organizations/universities that should know better. A Silicon Valley rumor is
that executives were advised they should fire their EDI folks as they were no longer needed, and think of the cost savings
of getting rid of these "expensive consultants"!! There was no appreciation of the business knowledge of these individuals.
The high-tech management was especially susceptible because they wanted to believe an internet solution was cheaper and the
business process issues just dissolve because of the use of the internet. They were shown "easy-to-read" XML comparisons
to "hard-to-read" EDI, not understanding these were not "standards-based" XML examples, some of the comparisons were absurd;
and does the computer care how "readable" it is, as long as it is mapped properly. Marketing took over eBusiness. Remember
all the ads: "We saved $500 million by doing eCommerce"? They were too far removed to understand that EDI over the internet
existed since 1995 and was already evolving. They also did not understand nor appreciate the level of sophistication required
to implement complex processes across companies. In the early days of eBusiness, it was not uncommon for large companies
to have one group piloting the "new" eBiz transactions based on web/XML, and another "old" legacy EDI group doing that "low
techie stuff" that management thought would be "dead" in a year or two. Only after years did some of the management begin
to understand that the two groups were facing the identical business issues; XML did not prove to be faster, more accurate
and less costly to implementation; AND EDI was not dead. There was no magical silver bullet out on the internet that solved
their business issues or created standardized business processes. Many senior managers still do not understand this.
Normally, I like to reference my sources, but the person who wrote this in 2002 is respected in the B2B industry; and (I presume)
would now be embarrassed by his comments. His former company (which sells an XML solution) still has his article on their
web site:
"The cost of installing a basic XML application can be as much as 50% less than an EDI link. Any browser that is capable
of presenting the transmitted data is an adequate client, and the costs per transmitted message are significantly lower when
compared to EDI. Additionally, with EDI, data must often be re-entered before it can be processed further with a company's
other applications, such as its internal accounting software, or its merchandise information system. XML, on the other hand,
enables data to be easily exchanged between different applications and then processed directly."
Misinformed (to me) as the above quote seems, it was the basis used by a Harvard B-school publication written by one of their
professors to recommend XML standards over the use of EDI. Quoting from a promotional piece from the VP of Sales of a very
small company is not the usual rigorous Harvard B-school quantitative methodology one would expect. Stanford University
gets in the act, too. In their paper, "Measuring Benefits of RosettaNet Standards -- Final Report", in their ROI
analysis they include instructions for their worksheet. {This worksheet includes the detailed calculations of the expected
reduction to be realized in [...EDI-related...] manpower costs [...] -- due to the move to non-EDI type(s) of transactions}.
In another part of the paper they say: "Lower costs and increased efficiency are expected even if previous processes were
not manual, but were rather based on EDI transactions. In addition, the accuracy of the data is increased."
I believe the movement to outsource EDI/B2B is also contributing to the lack of understanding of the business issues, and
the frustration of implementing EDI or any XML B2B-based process. It is unclear if it is the chicken or the egg. It appears
to me that many of the outsourcing companies oversell their B2B capabilities, then get caught up with the techie stuff --
which often appears to be the only thing they know. But, big business should understand when they are getting a slick sales
pitch on outsourcing -- create a rigorous evaluation process, and be ready to exit if the provider can't deliver.
I recently was involved with implementing EDI with a customer that had outsourced EDI. Their implementors had no clue about
guidelines, X12, nor how to map, how to make changes to their maps, and basic ebiz concepts. Example (one of a laundry list),
they had never heard of SCAC codes (although we were doing a world-wide ASN implementation & they were representing very large
Fortune 100 company). Pre-outsourcing days, this company's implementors were some of the finest, their people were trained,
and certainly had known what SCAC codes were & supported them. Finally, we said, "Send us your proprietary carrier codes
you want us to use on the ASN's". 6 weeks later, they couldn't figure this one out either. Then they said, "OK -- just
hard-code this ONE carrier code in your map. We know it will work." Yipes!!! Thank gawd they were cheap! But you know
this one will require corrective action later on..... Betcha that won't be cheap.
MP<
Here was the train of emails that I responded to:
Re: [EDI-L] Job Description | EDI Gentran/Mercator | Atlanta, GA
We have the following urgent requirement.
Experience with Gentran Integration Suite Business Process Development and mapping as well as administrative setup, code Lists,
Partner Configuration.
Familiarity with EDI X12 standards. Familiarity with Unix environment.
Preferred Skills: Unix AIX platform familiarity as well as shell scripting. Knowledge and experience with Mercator/Ascential
Data Stage TX and Commerce Manager.
Wednesday, April 4, 2007
We're on a 'fast track' to bad trade policy
Lou Dobbs has an interesting article today on outsourcing, making the following points:
“Thirty-one years of consecutive trade deficits and the loss -- in just the last six years -- of millions of manufacturing
and good-paying middle-class jobs to outsourcing have been the result of what I consider this unconstitutional ceding of power
to the executive branch in the form of fast-track authority.
Last week, I testified to the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade that our failed
"free trade" of the past three decades has been the most expensive policy the U.S. government has ever pursued.
I also told the committee: "The pursuit of so-called free trade has resulted in the opening of the world's richest consumer
market to foreign competitors without negotiating a reciprocal opening of world markets for U.S. goods and services. That
isn't free trade by any definition, whether that of classical economists like Adam Smith and David Ricardo or that of current
propaganda ministers who use the almost Orwellian term to promote continuation of the trade policies followed for the last
three decades." Extending fast-track authority assures that continuation.
I'm not alone in the view that free-trade-at-all-costs has harmed American workers. Princeton University economist and former
Federal Reserve Board vice chairman Alan S. Blinder has joined Nobel laureates Paul Samuelson and Joseph Stiglitz and former
Treasury Secretary Lawrence Summers as skeptics of the benefits the faith-based economists in this administration love to
tout.
Blinder is now stating loudly that a new industrial revolution will put as many as 40 million American jobs at risk of being
shipped out of the country in the next decade or two. Blinder has said, "Economists who insist that 'offshore outsourcing'
is just a routine extension of international trade are overlooking how major a transformation it will likely bring -- and
how significant the consequences could be. The governments and societies of the developed world must start preparing, and
fast."
If you wish to read his entire article, it is at: http://www.cnn.com/2007/US/04/03/dobbs.april4/index.html
Friday, March 23, 2007
RosettaNet Education
I've now been asked to be one of the moderators of a B2B forum at CompTIA/EIDX (Computer and Technology Industry Association).
Dave Frenkel, Standards Manager from IDEA posted this question:
“Some of our customers are looking at doing a pilot project with some of the Rosettanet PIPs. Does anybody know of any
educational material to get some background on implementing Rosettanet. Also looking for tips on implementing Rosettanet.
We are not members of Rosettanet.”
Here is my response:
- COMPTia/EIDX offers as part of their Educational Series the, XRef (cross-reference) project. The goal is to link semantically
equivalent metadata fields across X12, UN/EDIFACT, RosettaNet, OAGIS, xCBL, and UDEF (Universal Data Element Framework).
The project is not yet complete, but this should give you a start on mapping metadata. You do not have to be a member of
COMPTia to download the information. Here is the URL: http://eidx.comptia.org/guidelines/xref_download.aspx
- At the upcoming uconnect meeting in Orlando, there will be a 2 day training session. Following is the URL:
http://uconnect.gs1us.org/AGENDA/RosettaNet2dayTraining/tabid/160/Default.aspx
- I’ve heard -- but have not been able to confirm with my contacts at RosettaNet -- that the RosettaNet organization offers
a free intro Webinar. You can contact them here. http://portal.rosettanet.org/cms/sites/RosettaNet/index.html
- Determine if there is a local RosettaNet organization. There is active one here in the Bay Area. You can request to
become a member at http://rnetbard.webexone.com/.
Hope this helps...
Susan
Tuesday, March 20, 2007
Preparing for the Exit
This weekend I read a very worthwhile Wall Street Journal (March 3-4) article, Preparing for the Exit by Ranjay
Gulati, Maxim Sytch and Parth Mchrota. As you know, I am a proponent of negotiating an exit plan during the initial discussions
with your targeted outsourcing partner. The article points out:
”There is no doubt this can be challenging. Like a prenuptial agreement, in which the couple discusses divorce options
on their way to the alter, negotiating exit options while still at the formation stage of an alliance seems almost counter
to human nature. For one thing, neither partner wants to admit that things could go awry. What’s more, there’s an eagerness
to get the deal done – and a fear that raising the worst-case scenario will undermine the euphoria and trust that often accompany
a new deal.“
“But partners ignore the issue at their own risk. Discussing the trigger points for exiting, as well as the disengagement
process itself, while still in the negotiation stage is paramount to an effective partnership. In many cases, exit planning
may actually enhance the alliance’s performance and longevity”.
When outsourcing your supply chain's EDI/B2B processes, the contract and negotiations should address the formal process for
communicating the end of the relationship, and the ownership of the assets once this occurs. In the case of a B2B relationship
this will include the maps, trading partner setups, mapping instructions, etc. You also need to address the process of migrating
these to another service provider or to bring these services in-house.
Thursday, January 4, 2007
History of EDI
There was a recent discussion on the history of EDI on the EDI-L blog. Amazingly, several commented that EDI began in 1948
with the Berlin Airlift. Here are some comments posted by Klaus-Dieter Naujok:
"I agree with you that one could argue about the first EDI message(standard) for some time, so let's all agree with recorded
history that the first EDI exchange took place in 1948 during the Berlin Airlift, where the task of co-ordinating airfreighted
consignments of food and consumables (which arrived with differing manifests,
languages and numbers of copies) was addressed by devising a standard manifest. As far as I know the standard was never publicly
published."
"In the early 1960 the rail and road transport industries started to engage in what we call today EDI exchanges. This let
to the formation of the Transportation Data Coordinating Committee (TDCC) in 1968. In 1973, the TDCC decided to develop a
set of standards for EDI between
companies and to invent a so-called "living standard", .ie: a standard that included standards on how to change the standards!
This resulted in the first inter-industry EDI standard in 1975 covering air, motor, ocean, rail and some banking applications.
What evolved included generic formats for general business ANSI X12, first published in 1981; a WINS format for the warehouse
industry; and a UCS format for the food and drug industry; and for TDCC. European
development of TRADACOMS, ODETTE and JEDI started around 1984."
The Lost Railroad Cars
Then Pete Austin from Axiom-Systems elaborated:
"Another piece of trivia for you."
"The rail industry got into the business because they kept losing railroad cars. I know, how in the world does a flatcar
on siding 13 in Omaha have to do with X12? Watch. They kept losing railcars and devised a way to find them all. They painted
bars on the bottom of their cars in a well defined coded manner (yes, early 'bar codes').
Then they started burying readers under the tracks. By reading the trains passing overhead, they now knew what cars were
where/when. Now if only there was a way to communicate this information back to corporate......"
Doug Anderson, Vice President of Sales Support at Kleinschmidt noted:
"I believe TDCC published the first Electronic Data Interchange standard specification for general usage (motor, rail,
ocean and air) in 1975. However, the TDCC began their work in 1968 and produced various drafts between '68 and '75. In addition,
both rail and motor carriers were testing those drafts during that time period."
"For the motor carrier industry, the first major implementation of the draft EDI standard was 1975 when P.I.E. (then Pacific
Intermountain Express) and GM implemented freight billing. In 1976 E.I Dupont and Chemical Leaman (a bulk chemical carrier)
did the same with the published standard."
Transaction Sets July 15, 1975
The initial list of transactions was supplied by Ralph Notto from his notes for his book "Challenge and ConSequences":
The first EDI Standards publication included 42 transaction sets.
These pertained to air, motor, ocean, and rail transportation and to
payment, administrative, and control information. Of these 42, 16
were still in use by year 2000, but may have been enhanced.
Identifier-Title
104-Shipment Information (Air)
105-Container/Equipment Transfer (Air)
107-Shipment Information for Export Declaration (Air)
108-Shipment Information for Import (Air)
109-Shipment Information for Equipment/Delivery Order (Air)
110-Freight Details and Invoice (Air)
111-Freight Details and Invoice Summary (Air)
113-Inquiry (Air)
114-Shipment Identities and Status Reply (Air)
115-Status Details Reply (Air)
116-Repetitive Pattern Maintenance (Air)
204-Shipment Information (Motor)
205-Container/Equipment Transfer (Motor)
206-Shipment Pick-up Order (Motor)
207-Shipment Information for Export (Motor)
208-Shipment Information for Import (Motor)
210-Freight Details and Invoice (Motor)
211-Freight Details and Invoice Summary (Motor)
300-Reservation (Ocean)
301-Confirmation (Ocean)
302-Container or Specialized Equipment Pick-up Order/Cancellation
(Ocean)
303-Cancellation (Ocean)
304-Shipment Information (Ocean)
305-Container/Equipment Transfer (Ocean)
307-Shipment Information for Export (Ocean)
308-Shipment Information for Import (Ocean)
310-Freight Details and Invoice (Ocean)
312-Arrival Notice (Ocean)
313-Inquiry (Ocean)
314-Status Details Reply (Ocean)
315-Status Details (Ocean)
316-Repetitive Pattern Maintenance (Ocean)
404-Shipment Information (Rail)
407-Shipment Information for Export (Rail)
408-Shipment Information for Import (Rail)
410-Freight Details and Invoice (Rail)
411-Freight Details and Invoice Summary (Rail)
416-Repetitive Pattern Maintenance (Rail)
900-Payment Authorization
901-Completed payments-
995-Advisory Information
999-Acceptance/rejection (Subsequently replaced by 997-Functional
Acknowledgment)
And finally Rachel Foerster of
Rachel Foerster & Associates Ltd added:
"And of course, we all know that it was Ed Guilbert that was actually the
father of EDI as we know it today as a result of his role in the Berlin
Airlift and further work in the U.S. DOT."
"My copy of the EDI Forum Founding Issue has several articles written by Joe
Carley, Ralph Notto, Buddy Bass, among others sheds light on this question
In Buddy Bass' (Earl J. Bass) article about John Nelsen he indicates that it
was Conrail and the Missouri Pacific railroads that provided the first ever
demonstration of the TDCC EDI standards when they exchanged the Waybill Data
Exchange transaction between them in 1978."
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2007.04.01 |
2007.03.01 |
2007.01.01 |
2006.12.01
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About This Blog:
These ideas are my own and do not necessarily represent the opinions of my clients. My focus will be on eCommerce, outsourcing
and other innovative tools.
About Me:
After years in finance, IT and operations management at Philips and Applied Materials, I decided to focus on what I enjoyed
the most: The design, management, and implementation of eCommerce projects enabling companies to effectively meet customer
requirements and manage global, complex supply chains.
Since 1993, my clients have included Cisco, Philips Semiconductors, Hewlett Packard, Cisco EMEA Headquarters in Amsterdam,
Electronic Arts, Juniper Networks, National Semiconductors, AMD and several small firms such as Neomagic and eLogistics.
I have an MBA in Finance and undergraduate degrees from the University of Michigan, Ann Arbor. Go Blue!
You can read more by visiting my web site:
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