Is EDI destined for extinction as teh number of businesses using teh internet multiplies, or will it carve a new role for itself in this 'connected' age? Spencer Marlow reports Predicting the imminent demise of electronic data interchange (EDI) is popular sport. First the internet, then the explosion in electronic marketplaces have been heralded as ushering in a new era of immediate, global, and near-free electronic commerce. Today, it would seem, the question is when, rather than if, EDI will finally give up the ghost, superseded by a wave of new internet-driven technologies. It is not difficult to understand why many believe EDI is under threat. EDI developed in an era when the internet was not a business reality, and when computer systems were limited in their ability to directly exchange data. Companies wishing to engage in electronic commerce had to use private networks, and invest in dedicated software and systems. For these reasons the majority of trading partners, typically smaller manufacturers and second-tier materials suppliers, have not been able to afford EDI. Today, only about 30% of trading partners in the global retail industry are EDI-enabled. What tends to be forgotten is the dramatic improvements that EDI has brought to fundamental business processes. By exchanging business documents such as purchase orders, invoices and shipping notices in electronic format, retailers and manufacturers, suppliers and third party providers have slashed costs, cut lead times and greatly improved efficiency, stock turn and service levels. Today, EDI is a mission-critical tool within the retail supply chain and one which has provided a tremendous return on investment for adopters. EDI remains essential to the operations of tens of thousands of retail organisations worldwide and continues to develop healthily in spite of the gloom and doom. This year EDI traffic will grow globally at around 20%. Companies across all sectors continue to upgrade their installations, develop new types of documents and extend their EDI operations. Far from languishing at death's door, EDI is in good shape ­ and continues to power commerce throughout the supply chain. Nevertheless, the issue of accessibility remains. Given the success of EDI, it is easy to understand the excitement surrounding the newer, internet-based technologies, such as the XML format, which many claim will deliver the same capabilities ­ but at a fraction of the cost and complexity, allowing even the smallest players in the supply chain to trade electronically. XML is a particular language for creating electronic documents. In this sense it's directly comparable and complementary to EDI. What makes it special is that it is specifically geared to using the internet and web technology ­ the standards the whole world is now adopting. This means that in practice it is more "flexible" than other formats such as EDI, making it is easier to create changes for a community of trading partners. So if you want to send out a document that person A can read on the browser on the PC, that person B can get straight into their back office systems and that person C can pick up on their mobile phone ­ XML is more flexible than other formats, because all these means of communication are adopting the same internet-based standards. We can safely predict that the internet will allow this vision to become reality. By the exchange of electronic documents easily and cheaply over the web by using new formats such as XML and browser-based tools to create EDI documents, the internet will indeed open the door to a wide range of highly cost-effective means of trading electronically. The impact will be nothing short of revolutionary, in the number of companies embracing e-commerce as a core business practice. Yet it would be wrong to suppose that this will inevitably spell the instant death of EDI. First, it must be remembered that the adoption of XML and the internet by businesses is still in its infancy. XML requires standards just as much as any other format, and as with EDI, there will be a period of gradual take-up. The work of the Global Commerce Initiative, now driving global data standards for the retail industry, will be instrumental in helping avoid a proliferation of different standards. Indeed, the GCI last month published an initial set of XML standards ­ an important step towards wider adoption of XML as a whole. EDI by contrast is already well advanced down this path, and is now a well-proven format that is rich in standards and document types, understood and well documented by the industries that have developed them. XML is an immature technology ­ largely untried and unproven. By contrast, the large majority of retailers and leading manufacturers today have made significant investment, in terms of money and human resources, in their ED. They are now reaping the ongoing return on that investment ­ using systems that are well understood, extremely robust and, again, critical to the day-to-day operation of their business. Invariably, these companies will be extremely reluctant to discard reliable and profitable systems until the new alternative is just as trustworthy. The key question today, therefore, is not whether retail communities should retain and continue to develop EDI, or discard it in favour of newer formats. Rather, how will trading communities now make use of the new internet-based tools to quickly allow all players to trade electronically, using methods and data formats that suit them best. Thus we can envisage a community in which a large retailer, wishing to receive and transmit documents in existing EDI formats, will want to deal with, for example, some suppliers also using EDI, others using newer XML-ready tools, and others still who are only equipped with phone and fax. It seems to be sometimes assumed that the internet will somehow provide a "magical solution", allowing all trading partners of different types and sizes to start to trade electronically overnight, without any major effort or support. Yet as the simple scenario above illustrates, electronic trading communities will require robust yet highly flexible transaction management and in-flight data translation services to enable an EDI document to be transformed into XML, or a fax to be turned into a file that will be delivered to a trading partner by e-mail. Thus, it is wrong to assume that ­ in the foreseeable future at least - the internet will provide the one-stop "magic switch" to easily interconnect trading partners. Specialist, global service providers will continue to play a key role in developing and operating electronic communities ­ allowing seamless, secure any-to-any document exchange. As global leaders in the EDI marketplace today, GE Global eXchange Services is re-designing and expanding its EDI service model. Our new Interchange Solutions service suite embraces not only XML, but the whole range of additional formats that companies may wish to use to exchange documents over the Internet. Furthermore, this type of global, any-to-any transaction management service will be the key to the success of the newly-emerging electronic marketplaces. It is now becoming recognised that the real "breakthrough" value will be delivered when the processes that the marketplace enables will be fully integrated. For example: I may use an auction tool to get a better price for my purchase in a marketplace, but then I may have to turn back to my in-house system to re-type the details of my purchase into my ordering system. GRO|7/10/00 |29 |Market watch: Egg prices |UK PRODUCED Average prices £ per long hundred (120) compiled by The Grocer, Thursday October 5 Prices based on Keyes trays, at an average 250 cases BULK WHOLESALE Sizes V. Large 10.00 ­ 10.50 Large 8.50 ­ 9.00 Medium 8.00 ­ 8.50 Small 5.50 ­ 6.00 {{PROVISIONS }}