Digital Transformation

AS2 and Internet EDI – Nine Years Later

On September 9th, 2002 Walmart announced its intention to shift to a new Internet-based EDI system using technology from a small software company called iSoft. I like to refer to this event as the “shot heard ’round the world” in the EDI industry, because it dramatically changed the landscape for B2B communications. Walmart’s announcement had catastrophic impacts to the group of EDI VAN providers that had been the primary channel for B2B transactions for decades. The new Internet EDI technology, AS2 short for Applicability Statement 2, would enable corporations to circumvent the VANs.  Businesses could exchange transactions directly over the Internet with one another

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Understanding the Basics of Cloud Computing

Earlier in the year I posted a blog entry discussing why manufacturing companies should consider using cloud based environments. One thing I didn’t do in that particular post was to discuss exactly what a cloud computing environment is made up of and what benefits companies can expect to receive by adopting such services. There are many different resources on the internet relating to the subject of cloud computing, so I thought it would be useful to pull together a brief introduction to cloud computing in one blog entry. I will use this blog entry to cover the basics of cloud computing and in my next blog entry discuss how GXS’ Integration Cloud Platform, GXS Trading Grid, can help manufacturers improve and simplify their B2B processes. So first things first, what is a cloud computing?, well as you would expect you could ask five different people and get five different answers but one of the more succinct definitions that I have heard is from the analyst firm Forrester Research. They define cloud computing as “a standardised IT capability (services, software or infrastructure) delivered via internet technologies in a pay-per-use, self-service way”. Now definitions are great, but in this case I believe the easiest way to describe a cloud environment is to simply define the characteristics of how it operates: Dynamic – one of the keys to cloud computing is on-demand provisioning Massively Scalable – The service must react immediately to your needs Multi-tenant – cloud computing, by its nature, delivers shared services Self-service – As a user, you can use the service as often as you require Per-usage based pricing – You should only ever pay for the amount of service you use IP-based architecture – cloud architectures are based on virtualised, internet based technologies Over the past couple of years, efforts have been made to define the different types of cloud computing environments that are available and how they should be used by different ‘cloud consumers’: Public Cloud – available to the general public or large industry group and is owned by an organisation selling cloud services Community Cloud – shared by several organisations and supports a specific community that has shared concerns Private Cloud – operated solely for an organisation or company Hybrid Cloud – combination of two of the above, they remain unique entities but are bound together by standardised technologies As cloud technology has evolved in recent years a number of technology layers have been introduced within the cloud and the following definitions of ‘cloud layers’ seem to be pretty much accepted by many of the analyst firms around the world: Infrastructure-as-a-Service (IaaS) – this delivers the computer infrastructure, typically via platform virtualisation-as-a-service.  It is an evolution of virtual private server offerings.  IaaS includes servers, memory and storage that allow a customer to scale up or down as required by the business. Infrastructure can be used by customers to run their own software with only the amount of resource that is needed at a given moment in time. Platform-as-a-Service (PaaS) – delivers a computing platform and/or solution stack as a service, often consuming cloud infrastructures and sustaining cloud applications. PaaS allows users to use the cloud to develop new applications without the need to have the software or infrastructure purchased in-house. Essentially provides anything to support how a company builds and delivers web applications and services in the cloud. Software-as-a-Service (SaaS) – delivers software over the internet without the need to install applications on the customer’s own computers.  SaaS applications are run from one centralised location which means that the software can be accessed from any location over the internet.  Centralised management of applications helps to simplify maintenance and applications are consumed on a pay-as-you-go basis. The web based nature of cloud computing environments means that it is able to offer companies and users significant benefits over more traditional behind the firewall software environments: Global Accessibility – the cloud platform can be accessed anywhere in the world by simply using an internet browser Easy to Maintain – upgrades to the environment are managed and distributed from a central location thus eliminating the need to upgrade on a local basis Scalability – the platform can be expanded or contracted depending on the requirements of the business Rapid Deployment – new users, plants or offices can be brought online very quickly thus providing a significant competitive advantage, especially in emerging markets Flexibility – new modules can be introduced to the cloud computing environment with ease Low Cost – the pay-as-you-go nature of cloud environments means that IT and B2B teams have improved long term predictability of costs to operate the infrastructure Consistent User Experience – users are presented with an identical environment irrespective of where they login from and it can be tailored on a role by role basis Central Authentication – access to the cloud environment can be managed from a central location, thus simplifying user administration As well as generic business benefits, cloud computing offers many other benefits when compared to more traditional behind the firewall type infrastructures.  The benefits of moving from a traditional IT environment to a cloud based environment are summarised in the table below: So you want to implement a cloud computing environment?, but how do you persuade your Financial Director or Chief Financial Officer that cloud computing can help bring significant cost savings to the business, the table below summarises on-premise versus cloud computing related costs that can be expected. Finally there are many green benefits of cloud computing to consider.  Earlier in the year I wrote a blog on this subject , but in summary cloud computing allows companies to: Lower power consumption requirements, as in-house data centres and server infrastructures can be disbanded Less computer/network equipment packaging to dispose of as new equipment arrives at your office or business location Minimises travel requirements for IT implementation teams as all systems are administered and deployed from a central location The light weight nature of cloud computing applications means that they can be accessed by low power mobile devices such as smart phones and tablets Less paper flows across the supply chain as all trading partners will be exchanging business documents electronically I realise that I have only scratched the surface in terms of understanding about cloud computing but hopefully this blog entry has been useful for you. In my next blog entry I will focus on how B2B environments can benefit from cloud computing and in particular how a PaaS type environment such as GXS Trading Grid can help move your company’s B2B environment to the cloud. In the meantime if you would like to learn more about GXS cloud offerings then please click here.

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Insurance Technology: Time to Get Your Head in the Clouds

As the spring 2011 conference season winds down, I attended the ACORD/LOMA Insurance Systems Forum in San Diego, CA. ACORD (Association for Cooperative Operations Research and Development) is a global, nonprofit standards development organization serving the insurance industry. LOMA (Life Office Management Association) provides training and education for insurance professionals worldwide. The event is billed as the premier business and technology event for insurance professionals. One of my goals at ACORD/LOMA was to better understand cloud computing in the insurance industry. There were several sessions that touched on cloud and Software-as-a-Service (SaaS). One of the most interesting was “Cloud Computing for Insurers: Time to Get Your Head in the Clouds” by Bob Hirsch, Director Technology Strategy and Architecture, Deloitte Consulting LLP. Bob provided some interesting thoughts on why cloud isn’t more prevalent in insurance. One reason is that cloud vendors have been slow to meet the regulatory demands of insurance. Another is that vendors are not in the “core” space–most cloud implementations are at the “edge for specific workloads.” Insurance firms also have concerns about data loss, security and privacy, audit and assurance, backup and disaster recovery, vendor “lock in”, and IT organizational readiness. Bob described vendor “lock in” as the inability to easily migrate your company’s information from the cloud provider’s data center to your own if you decide to bring processing back in-house. Bob suggested that with quality datasets, computing advances and maturing tools, analytics could become a strategic cornerstone of the enterprise.  As an example, he talked about the cost savings from moving volatile computing needs to the cloud. Bob explained that insurance companies need to run stochastic models each quarter to estimate risk. Large insurers are running grids of 2500 nodes and growing for this type of computing. Running the models can take 24 to 48 hours, but the rest of the time the servers are idle.  Bob stated that current grid systems can be modified to be cloud aware and “burst” capacity to clouds as needed by storing the grid image in the cloud and deploying it across servers as needed for periods of peak demand. Bob also walked through a cost/benefit analysis for Monte Carlo simulations for hedge funds which have limited in-house IT resources. The analysis showed in-house monthly costs of $14,280 vs. $6,930 for cloud, a 51% savings. For the moment, Bob said that smaller insurance firms are ahead of larger ones with using cloud-based applications.  This is because insurance systems are very fragmented within larger organizations and they are slow to consolidate systems across the enterprise.

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Five Reasons Why Cloud Computing Helps to Develop Greener Supply Chains

Last year I posted a blog, in support of Earth Day 2010, relating to the volcano that erupted in Iceland, I said at the time that it was nature’s way of reminding us that we should be thinking about greening our supply chains and making our logistics networks more efficient. This year Japan faced a significant natural disaster which not only brought hardship and distress to many families but it also led to global supply chains being significantly impacted by parts shortages from Japanese based suppliers.  Globalisation can be a great thing, BUT you must remember that wherever a new manufacturing plant is established you must be able to ensure prompt delivery of parts. I am sure many Japanese manufacturers, especially those in the automotive sector, will be re-thinking their supplier and logistics related strategies to support their global network of plants moving forwards. With Earth Day 2011 fast approaching I thought I would discuss some of the green related benefits that can be obtained through implementing a Cloud based B2B infrastructure. Now much has been discussed about the benefits of Cloud based infrastructures and in an earlier blog entry I discussed how Manufacturers could benefit from Cloud based environments. There have been many research articles written about how Cloud based  environments are quick to deploy and easy to maintain on an ongoing basis but I have seen very little written about the green and sustainable reasons for deploying a Cloud based infrastructure. Therefore I thought I would highlight a few green benefits in this blog entry.   1. Lower power consumption requirements – This is one of the most important green related benefits that a company can realize by adopting a Cloud based B2B infrastructure. Many companies around the world have spent millions of dollars establishing their own in-house data centres or server environments. From  investing in highly available power supply infrastructures with uninterruptible power supplies (UPS) with diesel generator backups, extensive lighting infrastructures, through to implementing complex networking systems and air conditioning systems.  All of these when combined together produce a relatively large carbon footprint from a day to day infrastructure operations point of view. As Cloud based environments are hosted by an external vendor, this not only helps companies remove the cost of supporting an in-house data centre or server infrastructure but more importantly it can help to significantly reduce a company’s carbon footprint by reducing the power consumed to run the supporting utilities related infrastructures such as those mentioned above. 2. Less equipment packaging required for server and networking hardware – In-house data centres require numerous servers, storage devices, networking equipment etc and these typically arrive from the IT suppliers in large, over packed boxes containing cardboard, wood, plastic and polystyrene.  Once these pieces of equipment have been delivered then the packaging needs to be disposed of carefully or recycled.  In addition, the software installed on the servers will typically arrive on a CDROM and via an extensive paper based installation and setup manual. Cloud computing based environments remove the need for buying and running extensive computer servers and other associated infrastructures. Therefore there is an opportunity to minimise the amount of wasteful packaging materials that are used to transport these pieces of equipment to an office or manufacturing location. 3. Minimises travel requirements for IT implementation teams – Many companies have globalised their operations over the years and in a bid to reduce operational costs many companies have established a presence in emerging markets such as China and India. However one thing that is often overlooked is that when entering a new emerging market you will need to secure local IT implementation resources in order to help setup your IT or B2B environment.  However due to the limited availability of skilled IT resources, many companies deploy their own implementation resources which means that companies must fly personnel into the region and perhaps keep them onsite for a few weeks.  However typically these employees will be seconded to the new plant to not only get everything setup but to also cross train local staff in the future maintenance of the equipment.  So if a North American manufacturer sets up a new plant in China, how many people will it have to fly across the world to support the operation?, how many tonnes of green house gases will the planes burn to carry staff and equipment to the new plant? As Cloud computing environments are hosted by an outside provider and are typically very easy to deploy, you can, in most cases, remove the need to send employees half way around the world as these environments can be brought online and monitored remotely. 4. Less paper required as hosted platform encourages full participation from a trading partner community – Many companies have struggled to encourage all their trading partners, especially those in emerging markets, to send information electronically. Instead, many smaller suppliers still use manual paper based processes. For example in China the fax is still seen as one of the main business related communication methods. Also, there are various systems for exchanging shipping related information between logistics carriers and across customs and border control agencies.  The very nature of Cloud based environments means that they are quick to deploy, easy to use and simple to maintain on a daily basis.  The use of web based forms to replicate paper based form content means that even the smallest or least technically aware supplier or border control agency can simply enter or view information directly via the web based portal environment. Paper based copies of web forms can still be printed off if required, but in a Cloud environment this is more of an on-demand process. Once you enter information via web based forms it automatically gets fed into some form of hosted application within the Cloud environment. Cloud based environments significantly reduce the amount of paper flowing across the extended enterprise, at the same time it encourages less technically capable trading partners to participate in your B2B program. 5. Increased availability of information improves supply chain efficiency – Many companies typically store their business information in multiple enterprise systems across many different servers located in different countries around the world. Trying to track down the information that you require and then access via some form of networked computer system can be difficult at the best of times.  This is made more difficult if you are working remotely and you need to connect into a business system via a laptop computer. Over the past couple of years smart phones and Tablet devices have changed the way in which users can get access to enterprise information on the move.  Whether you are using an office based desktop PC or a laptop, they will either need to be connected to a power supply or charged up in order to be able to do any lengthy or meaningful work. An Apple iPad on the other hand is extremely eco-friendly from a power consumption point of view, especially when you consider that on a full charge the iPad’s battery will last for ten hours. In addition, the very fact that information is held in a central location and is accessible anywhere in the world via the internet means that logistics carriers for example can process shipping information a lot quicker, minimizing border control related delays and thus ensuring that shipments reach their destination in a much shorter period of time. Cloud based environments allow users to access information using more power friendly mobile devices and also helps all trading partners to get access to one central source of information. This helps to minimize supply chain disruption and improve green related efficiencies of logistics carriers. So in summary, Cloud based infrastructures offer companies a way to completely change the way in which they deploy and manage their IT or B2B environments and more importantly helps to significantly reduce a company’s overall carbon footprint. I am sure the recent events in Japan will make manufacturers think very carefully about their future data centre strategies and provide an opportunity to introduce greener ways of working.  I am also sure that as well as the global disruption to parts supplies, many Japanese based suppliers will have seen some form of disruption to their IT and B2B infrastructures following the recent Earthquake and Tsunami.  The main reason for this is that culturally, Japanese companies typically prefer to implement behind the firewall software based solutions rather than depend on external providers to host their IT or B2B solutions for them.  Given the green related benefits mentioned above and the ability to maintain continuity of a business in the face of a natural disaster, I would expect to see more Japanese companies taking an interest in Cloud based B2B infrastructures in the near future. For further information about Earth Day 2011, please click here. For further information on GXS Trading Grid, the world’s largest Integration Cloud Platform, please click here. The Earth Day website highlights the number of  ‘Acts of Green’ occuring in the world, well I guess you could say that every electronic transaction passing across GXS Trading Grid could be considered an ‘Act of Green’ as it removes an equivalent piece of paper from the supply chain. For more information on how GXS can help to introduce green supply chains and to get an idea of how many business transactions we are processing at the moment please visit our dedicated green supply chain microsite by clicking here.  

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Why SaaS Makes Cents for Supply Chain

Applications such as sales force automation, human resources and expense reporting have enjoyed most of the success and publicity in the early years of SaaS.  But there is a growing level of interest in utilizing SaaS for a broader range of business applications. Supply chain is an area in which vendors are investing in SaaS models.  A recent Forrester Study estimated that SaaS is already the primary model for 51-90% of Global Trade Management applications. Other applications such as transportation management, spend analysis, e-procurement and e-invoicing are also transitioning to SaaS with 26-50% of the market using cloud-based providers.  For supply chain applications, SaaS solves one of the biggest challenges, which is how to fund multi-enterprise solutions.

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Dell reboots their supply chain. Again.

The sight must have raised eyebrows. A dozen geeks marching conga-line-style through the cubes at Dell, placing a mass of network cables on an exec’s desk as a trophy to a major milestone. OK, conga line might be a stretch, but you get the picture. The occasion was to celebrate a milestone in Dell’s massive B2B platform transformation in 2009, supporting the switch from in-house manufacturing to third-party providers (eg., ODMs, like Foxconn) and the expansion of their retail customer connections (eg., Best Buy).  The numbers? 1,900 trading partners migrated across 30 countries. Three legacy B2B platforms consolidated into one integration cloud platform.  200 servers decommissioned, along with 20 networks, 20 datacenter racks, 10 databases and 6 TB of storage. Partner onboarding times dropped from months to days. While this was written up a while back, a couple of recent items bring it back to the surface. First, this week Dell announced they’d doubled quarterly earnings. They “crushed it” as Gary V would say. This is good news not only for shareholders but also could be seen as a sign of a rebounding economy (disclosure: GXS is a Dell customer. We use Poweredge servers in Trading Grid, our integration cloud platform). Second, the world of B2B managed services is going through a renaissance, as cloud computing helps blur the lines between traditional B2B e-commerce and any-to-any (A2A) integration.  This “Integration Brokerage” market (coined by Gartner) is growing at 18-20% and describes an IT managed service that delivers people, methodologies and cloud-based integration, such as integration platform-as-a-service (iPaaS), for B2B e-commerce and cloud services integration projects. What about you? Will an ERP project spur the need for modernizing your B2B platform? Will there be conga lines in your future? http://vimeo.com/11313961

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How will Cloud Computing Benefit the Manufacturing Industry?

I have been working in the IT industry for nearly 20 years now and I have always worked very closely with the manufacturing sector. In this time I have been fortunate to work for companies in the Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP) and Business to Business (B2B) IT sectors. Over this time I have seen new IT trends come and go, but one trend that I think will be around for some time is Cloud Computing. The manufacturing sector is truly global in nature and has a diverse range of suppliers working in both established and emerging markets. Now I have discussed B2B in the emerging markets in previous blog posts so I do not intend discussing the benefits of why companies should establish a presence in these regions as they are fairly well documented. What I would like to try and cover in this blog post is why cloud computing will help change the way in which manufacturers run their operations around the world. It is really only the last few years that collaborative tools have started to be more widely used across manufacturing companies, whether it is exchanging large CADCAM files, production information or simply improving the way in which suppliers exchange information with their customers, in my mind collaboration has been undertaken in a somewhat ad-hoc way.  This may be because of the limitations of the various IT systems or more likely due to the resistance to want to use collaborative tools across the manufacturing sector. From a design perspective, collaboration tools have seen relatively slow adoption due to the sensitive nature of product related information and the reluctance to send design information outside of a company’s firewall.  But with new, secure communication protocols such as OFTP2 being introduced to the automotive sector and the ability to encrypt information to make it more secure, will manufacturers start to lose their inhibitions and exchange design information more freely? With the drive to lower costs, manufacturers have established a presence in the emerging markets such as China and India and one of the first problems they face is trying to connect a remote plant or office to the company’s central IT platform. In many cases, a western manufacturer will send IT personnel to the new plant to help get the IT infrastructure up and running. They may have to stay onsite for a lengthy period of time to ensure that the remote employees are up to speed with the new IT systems. In fact there is a chance that the remote employees may have to be supported onsite for many months until the production systems stabilize and information begins to flow seamlessly from the various IT systems back to the HQ environment. Now what about if you could simply connect a new plant into a ‘Manufacturing Cloud’ and this cloud contained everything that was required to get the new plant online and up and running as quickly as possible, with minimum resources being applied? Cloud environments are widely regarded as being made up of three core components, Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and finally Software as a Service (SaaS).  So these three components have the ability to replicate an entire behind the firewall IT environment within a hosted or Cloud based environment. Many software companies are now offering SaaS type applications, for example SAP with their Business by Design Solution which is effectively an ERP system in the Cloud. From a PaaS perspective, GXS Trading Grid for example offers the world’s largest Integration Cloud Platform allowing more than 150,000 trading partners to connect with each other. The following video provides an overview of GXS Trading Grid as a Cloud based Integration Platform. GXS Trading Grid Integration Cloud Platform http://www.youtube.com/watch?v=HrbcL9Lzq1o The combination of SaaS, IaaS and PaaS will allow manufacturers to establish a presence in virtually any location around the world. They will be able to connect plants to an IT infrastructure using a ‘Manufacturing Cloud Template’, ie everything that is required to get the plant up and running, for example PLM collaboration tools, ERP applications, B2B and community management tools will all be pre-configured according to a user’s role within the business and they will be able to be deployed with minimal effort. If Facebook can have 500 million users interacting and exchanging information on their website on a daily basis then it must be possible to replicate this concept across say 1000 employees at the new plant and 500 trading partners who may be providing goods and services on a daily basis to keep the new plant running. In fact a recent article in Industryweek by ARC President Andy Chanta highlighted the importance of building Cloud based, companywide networks to bridge the gap between the various departments within a manufacturing operation. Andy goes on to say that U.S manufacturers in particular “need to become more innovation centric to increase their global competiveness”, and increased use of technology is key to this. Many of today’s manufacturers are seeing their global aspirations being eroded due to having to work with legacy IT systems which make it difficult to extend an IT infrastructure in to other regions of the world.  Cloud based infrastructures allow manufacturers to overcome these restrictions and allow them to seek new business opportunities in any region of the world. Key to Cloud adoption across the manufacturing sector will be having support from all management levels within the company, including the CEO. If companies are able to realize significant cost savings by adopting cloud based services and it allows real time information to flow freely across a seamless ‘collaboration network’ then it will allow the company to make more informed decisions with regards to company strategy and future growth of the business. Another quote I liked from Andy was that “manufacturers have done a good job over the past decade of optimizing and automating their supply chains.  Now the focus needs to be on “end-to-end” integration that fosters collaboration between R&D, engineering, operations and functions”. I will expand on how GXS’ Integration Cloud Platform can help manufacturers realize this vision and achieve these goals in a later blog entry. In the meantime, if you would like to learn more about GXS’s Cloud strategy moving forwards then please click here to visit the dedicated Cloud page on our website.

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B2B Integration – There’s No App for That?

“The App Store” is on pace to hit ten billion downloads any day now.  My four-year old decided to drop my iPhone face-down onto the ceramic tile in my kitchen last week.  Needless to say this shattered any plans I had for buying more apps.  Despite Apple’s ownership of “The App Store” name, it does not hold a monopoly on the idea.  In fact, App Stores are popping up everywhere.  Of course, the best known app stores have been launched by mobile device and tablet manufacturers such as RIM, Google, Nokia and Microsoft.  But the idea of App Stores is rapidly expanding beyond tablets and phones into new areas.  Earlier this month Apple launched a new App Store for Mac Users.  GPS Navigation Device maker TomTom announced plans for an App Store in 2010.  And Cloud Computing vendors such as Microsoft, Salesforce.com and Intuit have App Stores for add-ons to their enterprise applications or infrastructure offerings.  Even my dry cleaner told me that she is planning to launch an app store later this year.

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Finding Context in a River of Data

In my last blog entry, I discussed the river of data that flows between trading partners.  This river of data has the potential to deliver far beyond it’s role in business process execution, but there are challenges.  The first challenge is establishing a context. The splash of water to the left could be the drop that breaks the dam, the drink that saves someone from thirst, the coolant that prevents the engine from overheating, or any one of a dozen other potentials — the point is that you cannot tell from the picture, because it lacks any sort of context (it’s a splash from a larger body of water — wouldn’t want to leave you in suspense…). When a purchase order, ship notice, payment, or change in inventory status comes flowing across the wire, it too needs a context to be truly useful — but what do I mean exactly by context?  It’s one of those concepts that is easiest to understand through examples. Types of Context in B2B Process: what business process is this transaction a part of?  One of the most common processes GXS helps customers with is the “order process”, but there are actually many intersecting processes going on with any real interaction.  For instance, orders (hopefully) result in shipments and (sadly, for the buyer) invoices.  The shipment and invoicing processes intersect the order process — so a given transaction (say, an Advance Ship Notice) may participate in many processes simultaneously.  The ability to see a document in the context of a process is very valuable.  Order processes are typically not too bad in this regard, as the originating order number is often a part of the downstream transaction flow.  The trick to process context is associating a given transaction to a completely defined process so that you know how it is supposed to be handled. Customer/Supplier (Partner): what business relationship is this transaction a part of?  Hopefully knowing your partner is not an issue — but partner context is not about identity, it is about the relationship.  If a supplier is going to be late on an order, is it part of a pattern?  Am I about to violate a service level for a customer that I am in the midst of renegotiating a big contract with?  This is theoretically the realm of the CRM/SRM/ERP infrastructures, but very few of them operate well in real time, as events are flowing in off the wire.  The ability to put a B2B transaction in the right partner context quickly can have a big impact. Product: what product line is addressed by this transaction?  Is it a new product, a retired product, a product that doesn’t exist (i.e. a data error).  Product context is also the entry point for trade promotions management in some industries.  This has been an interesting area of late, as customers have sought to tie in B2B execution systems to master data management, precisely for ensuring a correct product context. Financial: how big is this transaction?  What effect does it have on the financial metrics of both organizations?  Traditionally the realm of ERP systems, the ability to look into the river of data and see the money flowing can be very powerful.  Sometimes establishing this context is as simple as integrating effectively to the ledgers within the traditional ERP systems.  Other times, smaller companies may look for help from a SaaS (software as a service) offering to deliver financially oriented reports on what is flowing (because their internal systems lag reality a bit). Logistical: what does this transaction tell me about the logistics involved?  Specifically, is this shipment/payment/etc going to be where I need it (either physically or financially) when I need it?  As an example, if a big promotion is planned for a given product, and several containers of it are held up in customs, that could be a big issue.  If a truck of critical components for a factory is delayed, is that an annoyance or will it grind production to a halt.  Part of the logistics context is understanding how things move, and what ultimate impact a disruption could have.  If you know that an item is being shipped by boat, rail and truck — and is delayed in a rail yard, can the truck make up the time?  When is the product needed?  To establish a logistical context, you need to know the planned logistics (often available in shipping transactions), and the historical performance of the modes and carriers involved. Market/competitive: has there been a change in the order pattern?  If a few customers (or even one) change their order pattern, it could be a sign of a competitor move.  If several customers (or suppliers) suddenly change behavior, it could be a sign of a shift in the market.  Change is really only something you can observe within the context of a given relationship.  The reason B2B in context is a critical area to observe is that averages and aggregates can sometimes be misleading.  If the market is growing, but a big customer is shrinking, you may not see the customer issue in the totals. There are many kinds of context I have not even discussed (geographical, regulatory, legal), but you get the idea.  The challenge is to decide which contexts make sense, and learn to see the river of data flowing between you and your partners through the lens of those contexts.

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The Cloud may have the Computing, but the River has the data….

Organizations around the world are busy extolling, exploring or arguing with the notion of Cloud Computing, but there is another metaphor that may grow in importance as Cloud Computing matures — the River of data that flows between organizations and their partners which can be tapped for power and profit. Every day, companies exchange millions of electronic documents with each other that have some very special characteristics: – the data matches actual transactions occurring in the “real world” (orders, shipments, payments) – the data is structured in a way that provides meaning, it can be processed and turned into information – the transaction data has relationships to other transactions in the River that can be correlated Unfortunately, for most organizations, the potential to tap into this powerful source of information remains just that, potential.  The challenges inherent in examining, correlating, and acting upon the massive flows of data generated by even modest enterprises have typically been overcome only rarely, and often not at a sufficient scale to truly exploit the opportunity.  In this post I’d like to look at some of the challenges that make this difficult, and I will explore the opportunities in future posts. Some of the Challenges…. Context: even today, most B2B transactions utilize traditional EDI standards like ANSI X12 or EDIFACT.  Despite the standardization of documents, it is frequently tricky to understand the context in which a given transaction is operating (e.g. for a given ASN — ship notice — what order process is it part of?).  Without context, it is a free floating piece of data, requiring some associations to turn it into information.  If a critical shipment is one day away from delivery to a store about to run a promotion, that is information — if Shipment #101 has been processed, and I don’t know what process it is part of, that’s just data Timeliness: while immediacy is a great benefit of the data flowing between trading partners, age is its enemy.  With today’s more efficient supply chains, data starts to go stale very rapidly.  The challenge is to connect data flowing between partners to other information and to business processes before it is too late to act upon the information.  The data flow is not unlike electricity generated by a dam, which must be sent over wires to be consumed in real time.  Data warehouses can use the last three years of data to help forecast, but a logistics system has to act upon what is happening the chain today to deliver ROI Exceptions: until “the perfect order” is actually achieved, some of the most critical issues between partners are those that generate exceptions, either technically (cannot process an order or logistics document) or on the business side (wrong product, amount, price).  It is truly scary at the latency involved in resolving these exceptions, with most of them basically “failing out” to a manual process.  Despite the fact that for the “success case” there may be 100% automation, the most common “automated” exception handling is an email alert (how full is your inbox?) Integration: the “father of all challenges” when it comes to automation (and its role in resolving the previous three challenges), is the ability to integrate the flow of data into the many systems that are capable of rapidly providing context, and identifying and handling exceptions.  This challenge has always been daunting, but recent developments in technology and the ongoing march of technology have started to improve the integration possibilities Scale: the sheer volume of data, while being its greatest strength, may also be its biggest challenge.  Since millions of transactions flow between partners on a given day, to understand what is happening, all of those transactions have to be interpreted, put into context and analyzed for meaning.  RIGHT NOW!  If the approach is to methodical, you succumb to the timeliness challenge, but if the approach is too loose, you may generate so many “false exceptions” that you actually degrade business performance, rather than improving it These challenges are by no means the only — or even necessarily the most difficult — obstacles to successfully navigating the River, but I want to start focusing on the opportunities in my next post.  In the meantime, please share additional challenges to tapping into the flow without drowning.

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E-Prescriptions – The Fastest Growing B2B Networks?

In a post earlier this month I explored the question of who has the largest B2B integration network in the world.  The competition is primarily between the top vendors in the financial services, health care and supply chain segments, each of which have been using B2B technologies for over 20 years now.  But another equally interesting question is who has the fastest growing B2B network?  One of the candidates must surely be in the US Electronic Health Records (EHR) market.  The topic of Electronic Health Records has been receiving a great deal of publicity in the past year since the American Recovery and Reinvestment Act (ARRA) was passed.  ARRA stipulates that the Federal Government will provide financial incentives for health care providers which can demonstrate “meaningful use” of EHRs.  EHRs can include a variety of information about a specific patient including demographics, medications, immunizations, allergies, laboratory data, radiology reports and past medical history.   In my last post I described one of the fastest growing segments of EHR, the sharing of medication data between providers, pharmacies, and payers via e-prescription networks.  In this post I will outline who are these e-prescription networks and how fast are they growing?

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Who has the Largest B2B Integration Network?

Since IBM’s acquisition of Sterling Commerce in May there has been a lot of discussion about the consolidation of B2B networks (and what it means for the industry).  One of the topics discussed amongst B2B integration professionals is – Who has the largest B2B network?  Numerous analysts and thought leaders declared GXS to be the largest following the successful acquisition of Inovis in June.  However, I am not convinced that GXS really is the biggest.  Amongst the traditional supply chain oriented EDI networks, GXS earns top ranking for network-based revenues, annual transaction volumes and number of companies connected.  However, if you were to consider other types of similar B2B networks in adjacent industries such as financial services or health care, then the #1 position is not as clear.

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EBICS – The Standard for Corporate-to-Bank Communication?

2010 is an exciting time in the world of B2B integration standards for the European banking sector.  In this case, I am not referring to the continued rollout of SEPA in the EuroZone, but rather the extended reach of EBICS.  EBICS is a highly secure file transfer protocol being used in the French and German banking communities for exchange of cash management related transactions.  The name EBICS stands for Electronic Banking Internet Communications Standard (EBICS).  EBICs is the successor to an earlier standard named BCS that was used in the German banking sector from the mid-1980s until the end of 2007.  BCS refers to the Banking Communication Standard which was developed by the German Credit Committee, which is known as Zentraler Kreditausschuss Association (ZKA) in German (longer, but no doubt easier to say than Eyjafjallajokull).

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Does Your Supply Chain Have An Early Warning System?

New Predictive Intelligence-Based Financial Industry Risk Ranking Offers A Great Model for Global Supply Chains The dust, or ash cloud if you prefer has all but settled from the recent Icelandic volcanic eruption. An eruption that grounded flights yet gave flight to heightened awareness of the need to intelligently predict and respond to business disruptions. In days following the event, I was heartened to see humorous (and futile) attempts to master the pronunciation of Eyjafjallajokull quickly make way to discussions of supply chain risk and resiliency.

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B2B E-Commerce from 2010 to 2020 – Predictions for the Next Ten Years

Each of the past few years, GXS has published a list of predictions for the coming year.  With the start of a new decade, we have taken a different approach this year.  Instead of issuing predictions about just 2010, I asked a group of eight GXS Subject Matter Experts (SMEs) to offer their opinions about how changing market conditions and new technologies will impact B2B e-Commerce over the next 10 years.  We developed 10 different predictions on a wide range of topics including cloud computing, SaaS, mobility, SOA, agile development, open source, social media, sustainability, emerging markets and demand driven supply chains.

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Could Community Source be a Better Approach for Supply Chain Applications?

In my last GXS post I described the relatively small number of B2B integration vendors which have embraced open source.  I this post, I will discuss a type of open sourced called "community source" which I think has high applicability for the supply chain and B2B integration.  In community source a group of companies (versus individual users) unite to develop software that solves a common business problem.   Typically the application being developed either is not available from a commercial software vendor or is available, but only via a cost-prohibitive licensing model.   There are several different models of community source, but the most popular is called a “gated community,” in which only selected member organizations contribute to the development.  The gated community concept differs from traditional open source to which the general public can contribute.   The focus of community source is not to build commercial applications for resale, but rather to create useful software that the developer community can leverage for business benefit.

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Integration Smackdown: Documents versus API in B2B

I have been focused of late (a rare luxury for me) on exploring the integration technologies to the emerging cloud computing providers — especially the SaaS guys.  Last week I attended Dreamforce 2009, which was an absolutely fantastic experience.  Salesforce.com has posted a bunch of the material on the site, and it is worthwhile. While at Dreamforce, I attended training on integration with Salesforce.com, both to and from.  I enjoyed the class, and found the relatively rich set of alternatives (remember that this is a very young company that has quadrupled its workforce in the last few years) to be a good toolbox for integration.  One of the more intriguing aspects is how the company's engineers balance control of service levels (i.e. their ability to prevent you from hurting their performance when you integrate) with access.  One of their key technologies is a set of "governors" to control the resources available. While I really enjoyed the exposure to the API-level integration, I cannot help but compare all of this to how we traditionally do integration between business partners, as well as to SAP, which is via standard documents.  Apparently I'm not alone, as Benoit Lheureux of Gartner wrote a thoughtful blog post on how cloud integration will affect traditional integration.  From my point of view, API level integration (and yes, this includes web services), is usually more powerful and functional than integration driven through documents (disclaimer — yes, I realize at its heart that web services is basically the exchange of XML documents over HTTP, but for this discussion, it feels like an API…), but, document driven exchange is easier, more interoperable, and often enjoys much higher adoption.  And a major part of the "document advantage" is the ability to separate the handling of the document from "transport" (communications), which often allows use of familiar technologies to perform the integration. For my purposes, API level integration is the calling of specific low level services, with a set of arguments, often — though not always — using web services.  Although web services is "standard", the service calls are typically specific to a given SaaS provider (i.e. proprietary).  Additionally, the service calls may change based on the configurations done for a given instance setup for a customer (i.e. custom proprietary). Document level integration, in contrast, uses the basic pattern of sending in a document in a defined format, often — again, not always — in XML.  This document may vary from customer to customer, but most of it is the same, and customers can often submit the document in a variety of ways (web services, ftp, etc).  SAP is a pretty popular ERP system in the current world, and it supports a wide variety of integration technologies.  In our B2B managed services worlds, IDocs over ALE is by far the most common integration technology — despite the fact that there are often very good reasons to use a lower level approach (directly invoking RFCs after sending data using FTP, for instance).  Why?  Among many, many other reasons, customers and integrators like solutions that work predictably across multiple environments.  IDocs, like X12, EDIFACT, OAG, etc, are defined entities that do not change based on adding fields or custom logic to an application.  But possibly a bigger reason is the ability to use existing technology and processes to perform the work.  SAP IDocs can be manipulated using standard translation technology, and then sent via ALE or other communications methods.  The ALE protocol can be implemented in a comms gateway that you already own. Modern communications gateways have extensive support for web services today, but that is really a kind of toolbox for building custom adapters to custom services, with each one a "one-off".  This problem can be intensified if the service you are connecting to changes over time as additional data fields are added to objects (a product object is especially susceptible to change).  API level integration is usually much more brittle for this reason, and it is one of the characteristics that led many enterprises to switch to message oriented middleware, and attempt to impose canonical standards ("canonical standards" is a fancy way of saying a common format — usually in XML — for frequently used documents, like customer; canonical standards are often adopted from outside, especially the OAGi standards).  Integrating to a single system via API is often fun, maintaining dozens or hundreds of these is not. A common pattern is for emerging technology categories to start with low level APIs, and gradually build up to more abstract interfaces that are easier to use and less brittle.  Already, in the case of Salesforce, they are offering a bulk load service, and they are also offering a "meta-data" API that allows tooling to simplify integration.  Over time, I fully expect that most major SaaS providers will provide integration methods that feel a lot like trading documents, and that B2B teams will take the lead in using them. In the long battle between document and API integration, document style integration will dominate, though API and service level integration will play critical roles…   

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Record Cash Holdings by Large Corporations makes B2Bank Integration More Important than Ever

 The Wall Street Journal published an excellent article on November 3rd about how companies are holding more cash on average than any time in the past 40 years.  “In the second quarter, the 500 largest nonfinancial US firms by total assets, held about $994 billion in cash and short term investments, or 9.8% of their assets.”  With nearly a $1Trillion dollars in cash holdings, the opportunity for the Transaction Banking divisions at major financial institutions has never been greater.  However, some institutions have an advantage over others in the areas of sales, client delivery and product features due to their superior B2Bank capabilities.

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We Need a Napster-like Service for B2B File Transfers

In my last two posts I described how B2B integration infrastructures at major corporations are choking on the increasing number of large files transmitted crossing their firewalls.  Most of the existing approaches to large file transfer are expensive, proprietary and complex.  It is interesting to note that corporations have yet to achieve a simple, open, universal file sharing model comparable to what consumers enjoyed with the original Napster in 1999.  Yet, business users expect to be able to share large files at work the same way they do in their everyday consumer lives.  Recent technology advances compound the problem.  Broadband connectivity has become nearly ubiquitous in most developed countries.  For example, Verizon FiOS offers an Internet package that allows home users to buy Internet connectivity at speeds up to 50Mbps.  Furthermore storage costs continue to decline rapidly.  Grocery stores now sell 16GB USB memory sticks in the check out aisles for $20.  Despite these advances in networking and storage technologies, the corporate world continues to struggling with large file transfer. 

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