Digital Transformation

Finding the Opportunity in Crisis

Among the primary definitions of the word "crisis" found in Merriam-Webster's dictionary, I think the one that best defines the past 18 months in the banking sector is "an unstable or crucial time or state of affairs in which a decisive change is impending".  As I look around, I definitely see signs of decisive change across the industry.  And as the best crisis management teams will tell you–what people really remember is not the triggering event that begins a crisis but the long-term response to it. Already, most US businesses are giving the Federal Reserve high marks for its response to last year's meltdown. But what about the perception of corporates–your clients–to the banking industries' response?

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B2B Integration could help improve tracking of Pandemics such as H1N1 Swine Flu

I was watching the movie I am Legend on HBO Sunday evening.  I’m not sure if there is any correlation between HBO’s decision to broadcast of the film in May and the outbreak of the H1N1 Swine Flu.  However, it did start me thinking about pandemics and what could be done to better contain these outbreaks before they turn all of Manhattan into nocturnal, cannibalistic zombies.  The widespread outbreaks of H1N1 in Mexico and the US have made this subject top of mind for everyone from politicians to economists.  Of course, pandemics are yet another area in which B2B interoperability and integration technologies could play a significant role. The Center for Information Technology Leadership published a comprehensive report on how B2B interoperability in the US health care community could not only reduce costs but improve the quality of care.   Much of the data cited in this post is sourced from the 2004 report entitled The Value of Healthcare Information Exchange and Interoperability.   See my January post on how the Obama administration could save $75B annually from B2B interoperability in health care for more background information. Tracking Pandemics at the State, Local and Federal Level State laws require providers and laboratories to report cases of certain diseases to local and state public health departments.  Nationally “notifiable” diseases are forwarded by the state agencies onto the Centers for Disease Control and Prevention (CDC).  Connections between the states and the CDC are electronic and highly automated.  However, the first mile between the providers and the local and state agencies is highly manual.   Providers typically submit data via phone, fax, hard copy forms or very basic B2B communications methods such as a web portal.  For larger provider groups operating in multiple regions, notifications to state health agencies become even more cumbersome.  The 50 US states maintain more than 100 different systems to collect data each with its own communications mode. The most closely monitored “notifiable” diseases are frequently under-reported in the US.  Various studies conducted between 1970 and 1999 showed that only 79% of all STD, tuberculosis and AIDS cases were reported to public health agencies.  Reporting rates for other diseases was much lower at 49%.  There are several reasons for the reporting challenges.  But certainly one of the key issues is the ease with which the information can be transmitted to health authorities.  There is no question that the primitive communications methods used to collect provider data is a critical barrier to success.  However, even more problematic is the dependency upon overworked and understaffed provider personnel to take the time to consistently file the reports. Electronic Health Records – Public Health Benefits A better methodology for reporting on “notifiable” diseases would be to eliminate the need for human initiation altogether.  The process could be completely automated by connecting health care provider’s Health Information Systems and Practice Management Systems which contain the patient data to Public Health and Safety tracking systems.  However, connecting the tens of thousands of medical practices to the hundreds of different public health systems could prove quite an ambitious integration project.  A less complex and costly alternative would leverage the concept of Electronic Health Records (EHR).  The EHR would significantly simplify tracking of public health epidemics without the need for bespoke integration between various state agencies and each different medical provider. The EHR provides a comprehensive set of information about each patient including demographics, medications, immunizations, allergies, physician notes, laboratory data, radiology reports and past medical history.  EHR information could be stored in a series of centralized repository deployed around the country.  Each repository could contain the full medical records or just pointers to the locations of the records.   Triggers could be set up to automatically identify trends in data sets that might not be otherwise noticed, helping to provide an early warning system for potential disease outbreaks.  In the event of a pandemic or bioterrorist event, public health officials could easily access de-identified EHR data such as physician’s notes, patient demographics and medical history.  Without the dependency upon manual data entry, the latency of information flow could be reduced and the quality of information collected could be improved.  Administrative costs would be reduced considerably.  Average cost to send a report manually is $14 as compared to only $0.03 electronically.  CITL estimated that the use of electronic data flow from providers and laboratories to public health agencies would reduce administrative costs by $195M annually.  CITL did not quantify the potential economic savings from early identification of pandemics and bioterrorist events, but there is no question that these could be in the billions of dollars. B2B Interoperability and EHR Of course, a key technology enabler for EHR is interoperability between the various health care providers and the corresponding state, local and federal agencies.  Medical data is transmitted between providers, payers and public agencies using a variety of B2B standards including DICOM, HL7, NCPDP, and HIPAA-compliant EDI transactions.  EHRs could aggregate the available data related to prescriptions, claims, lab reports and radiology images into an electronic record.  Additional services could be layered onto the B2B integration framework such as data quality could be used to ensure the completeness of records and business activity monitoring to identify behavioral trends. Another concept evangelized in the CITL report is the idea of a National Electronic Disease Surveillance System (NEDSS).  The NEDSS would collect data from a number of relevant sources outside of the health care system which could be useful for monitoring   Examples might include 911 call analysis; veterinary clinic activity; OTC pharmacy sales; school absenteeism; health web-site traffic and retail sales of facial tissue, Orange Juice.   Such practices have been deployed by the US Department of Defense and the Utah Department of Health during the Salt Lake City Olympics in 2002.  Such an effort would require integrating additional state and local agencies, educational institutions and retail chains electronically using B2B.  

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The Importance of Integrating B2B and ERP Platforms in the Automotive Industry

Integration, this is an important word on the minds of many CIOs around the world, and yet many companies underestimate the importance of it, especially when trying to implement and work with countless back office systems. Let me try and compare a company trying to use a mixture of different back office systems to a musical orchestra. Each musician in an orchestra has their part to play in the musical performance, if one musical instrument is out of tune or a beat is missed for some reason then the audience will notice it straight away. It is no different for a company trying to integrate back office systems, the reason for doing this is to ensure a smooth flow of information around the organization, making sure that the relevant people in the various departments get the right information at the right time. Without backend integration, companies will struggle to orchestrate the flow of information across their extended enterprise. Whilst on the subject of orchestras, this was one of my favourite automotive adverts from last year, which was performed on actual car parts. Enterprise Resource Planning (ERP) systems have been used for many years to manage materials and enterprise resources within a company. Now unless a company makes everything in house, which is very rare these days, companies will have to manage a range of different suppliers and interact with customers on a daily basis. So there is clearly a potential barrier to information flow here, an ERP system is managing the flow of information within a company, but by itself it cannot manage a global network of trading partners as well. There has to be some level of integration so that the barrier can be removed and information can flow freely across the extended enterprise. Imagine being able to utilize ERP related information across your trading partner community, imagine being able to smoothly receive information from trading partners without any re-keying of information or having to interrogate multiple business systems. Integration, CIOs should not under-estimate the power that this word has and outsourcing the management of the B2B to ERP integration process to a trusted partner such as GXS should be given serious consideration. SAP is the most widely used ERP platform in the automotive industry today, and many companies rely on SAP software to manage their global manufacturing operations. Many European automotive companies, particularly those in Germany, have globalised their manufacturing operations in the past few years. They have established operations in ‘old’ emerging markets such as China, Brazil and India and the ‘new’ emerging markets of Thailand and Vietnam. As the automotive companies stretched their operations around the world it became more important to provide integration to multiple SAP instances and to also provide a means to manage their ever expanding community of trading partners. Ideally, the car companies need to get a single, consolidated view of their resources across their extended enterprise. Providing an integrated B2B and ERP platform allows the automotive companies to improve how they manage inventory levels, trading partner relationships and of course reduce costs across their business. GXS has worked with many companies over the years to integrate their B2B and SAP ERP platforms, in fact we are currently working with one global automotive tier 1 supplier to integrate 80 instances of SAP that are scattered across their global network of manufacturing plants. As you would expect, we have been able to establish a valuable knowledge base of information associated with integrating our Trading Grid® B2B platform with many SAP installations. However we can offer companies much more than this, let me briefly explain. GXS has over 40 years experience of working with companies in the automotive sector, in fact over 70% of the world’s Top 100 automotive suppliers are connected to our Trading Grid infrastructure. GXS can provide seamless SAP integration to a global B2B platform where nearly all the major suppliers already have pre-configured connections to our service We offer a mapping centre of excellence which provides a centralized location for managing over 30,000 maps. We can also provide support for a number of different SAP IDOC documents, for example SHPMNT03, INVOIC01, DELVRY01, ORDERS01. As you would expect GXS are fully certified by SAP for Netweaver® integrations We offer support for the broadest set of communication standards in the industry, whether it is mediating between legacy communication protocols or the latest internet communication protocols or indeed FTP over SAP ALE, either way we can make sure that you can connect to your trading partners irrespective of their technical capability Providing global 24/7, multi-lingual, support services ensures that your trading partners can be on-boarded and supported anywhere in the world. GXS recently acquired Interchange in Brazil which now allows us to work more closely with this important automotive manufacturing region You would have peace of mind knowing that your SAP implementation would be integrated to one of the most modern and highly available B2B infrastructures in the world. This means that your global instances of SAP would be connected to a future proof B2B infrastructure that has the flexibility to grow as your company grows Now I have only scratched the surface here and in future blog entries I will cover each of the above in more detail and explain how they help contribute to the smooth integration of many ERP related back office environments around the world.

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Should the FCC ban Async and Bisync?

legacy B2B protocols

Today is February 17th, which has become the equivalent of Y2K in the television broadcast industry. Today was also the original deadline set by the Federal Communications Commission (FCC) to discontinue analog broadcast television signals throughout the US. Congress recently passed the Digital TV Delay law which has extended the deadline to June 12th to allow consumers more time to complete the transition. While June 12th has become the new “drop dead” date, Congress specified that broadcasters are no longer obligated to continue analog transmissions during this extension period. However, 1100 of the nation’s 1800 TV networks will continue their legacy transmissions to maximize advertising distribution. The FCC’s ability to phase out older technology in favor of more modernized, cost effective protocols begs a question in my mind. If the FCC can apply such a policy to TV broadcasts, should we consider enacting similar legislation for outdated B2B communications protocols such as async, bisync and X.25? Y2K for the Television of the Industry The official motivation for the US switching to digital TV is to free up wireless broadcast spectrum which is in high demand by other user groups. Rather than using the spectrum for analog TV broadcasts, the frequencies could be allocated to municipal fire, police and emergency rescue departments to support public safety efforts. Of course, the upgrade to newer technology has numerous benefits for consumers and broadcasters as well such as improved picture quality and a wider variety of programming options. After the cutover, older televisions, which do not have a digital receiver and are not connected to a cable or satellite service provider, will not be able to receive the new transmissions. Consumers with older TVs will need to follow one of three courses of action to watch TV: Purchase a digital converter box, subsidized by the US government Upgrade to a newer model television Subscribe to a cable or satellite service The February deadline was extended to June due to a much higher than anticipated population of non-digital TV users. The US government originally estimated that only 15% of households received analog signals TV via free antennas. However, actual utilization of the analog broadcasts appears to be closer to 35% due to the fact that many homes have extra TVs not connected to cable or satellite TV networks. Legacy B2B Communications Protocols I think most government officials were surprised to learn of such a high population of legacy TV technology still in use in 2009. I suspect a similar level of disbelief would be experienced if a study of the use of legacy communications in the B2B integration sector were conducted. One would assume with all of the e-commerce technology businesses have today such as AS2, FTP and Web Forms that legacy technology such as async, bisync and X.25 have become virtually extinct. Unfortunately, this is not the case. For those of you not familiar with these legacy communications protocols, which is by no means something to be embarrassed about, here is a brief introduction. Async – is a communications protocol in which a start and stop signal are used to encapsulate individual characters and words. Async was originally developed for use with teletypwriters in the early 20th century.  Asynchronous signalling was very popular for dial-up modem access to time sharing computers and bulletin board systems during the 1970s, 80s and 90s.  Here is a link to the wikipedia page on async Bisync – is an acronym for the “Binary Synchronous Communication” protocol intorduced by IBM in the 1960s.  The bisync protocol was the most popular file transfer protocol during the 1970s and 1980s. EDI applications were a primary user of bisync as were ATM machines, cash registers and radar systems X.25 – is a Wide Area Network (WAN) protocolused with leased lines, ISDN connections and traditional telephone lines.  X.25 was especially popular in the 1980s within the financial services industry to connect ATMs to banking networks. Here is a link to the wikipedia page on X.25 I have never seen an official report on the use of legacy communications in B2B integration. However, I am confident there are over 10,000 companies are still using legacy dial-up connections such as async, bisync and X.25 throughout the US. What are the implications of the business world’s continued dependency on these ancient networking standards?  Can commercial entities effectively phase out these technologies on their own or will government regulation be required?

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Cloud Computing may Change Outsourcing/BPO

cloud outsourcing

Recent events (economic, technological, business) may be driving the convergence of two traditionally separate sources of value in the managed services or outsourcing world, specialized knowledge, and scale. Although some organizations have traditionally applied both specialized knowledge and scale, it was far more common for smaller service providers to compete on specialized knowledge — with higher infrastructure costs, and larger firms to compete mostly on scale, with less specialized knowledge and focus than their smaller rivals. But recent research and trends, show that the advent of cloud computing, and large commodity cloud service providers, may allow specialized managed services providers to focus and still provide compelling scale in the infrastructure. Referred to as “ADAMs” by Gartner (Alternative Delivery Models), these providers leverage not just Cloud architectures, but also Software as a Service (SaaS) platforms. And there is no reason why this has to be only a two-tier model! I recently posted a link via Twitter, Facebook, etc regarding a beta-service called CloudMQ. This service, not commercialised yet, may be an indicator. It aims to offer standards based (JMS, or Java Messaging Service), business grade messaging (guaranteed delivery, etc) “in the cloud” (offered to customers via the internet). So far, this sounds normal enough, until you realize the entire service is hosted on Amazon’s EC2 and S3 services, which are themselves infrastructure services!  And we are only at the start of this. Commercial services like Amazon change the economics, and when the economics change, the models quickly follow…

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