B2B e-commerce

OAGi and CIDX – The Long Tail Gets a Little Shorter

B2B standards

Earlier this month CIDX, the Chemical Industry Data Exchange, organization voted to transition its’ operational and governance roles to the Open Applications Group (OAGi) and the American Chemistry Council (ACC). CIDX will transfer its intellectual property to OAGi, which will create a new Chemical Industry Council to manage the standards going forward. I view this as a positive development for the B2B e-commerce sector. There are far too many e-business standards in the marketplace today. While these standards can create significant efficiencies and competitive advantages within vertical industries, they complicate matters for trading partners who need to collaborate across industry sectors. Rationalizing the standards efforts under a common governance and organizational model will promote more interoperability and ultimately wider adoption of standards. More about CIDX I do not have a background in the chemical industry so I cannot comment extensively on the use of CIDX within the sector. The CIDX web site offers very little information about its practice to non-members, despite advertising the standards as “free.” However, I did find information on the history, membership, financials and business processes supported by CIDX. History – CIDX was founded in 1985, but the most interesting work to me began in 2000 when the Chem eStandards were developed for XML-based buying, selling and delivery of chemical products Membership – includes industry leaders such as BASF, Bayer, Celanese, Dupont, Eastman Chemical, Shell Chemical and Rohm & Haas Business Processes – are very similar to other industries – RFQ, Catalog, Purchase Order, Credit upon Proof of Sale, Financials, Logistics and Forecasting Financials – CIDX generated $860K with a net income of approximately $40K in 2006 according to their annual report. OAG – The Long Term Winner in the XML Standards Race I read a Forrester report recently which stated that “industry initiatives like OAGi have failed to deliver consensus on any one set of standards…”  I would have to respectfully disagree with this opinion. If anyone is having success linking the efforts of XML-based standards across industries it is OAGi. The CIDX announcement is an excellent example. In my opinion, OAGi is a clear contender for the short head segment of the B2B standards curve I refer to as the Long Tail. OAGi has been active in the automotive sector for many years now and has recently taken on a more prominent role in the high tech and electronics sector as well. Industry insiders tell me that OAGi could potentially replace 1SYNC’s RosettaNet division as the primary standards organization for high tech. OAGi is even active in the financial services sector, collaborating with SWIFT and others on the new ISO 20022 XML standard for payments, securities and cards transactions. Another reason I think OAGi is poised to be the long term winner in the XML space is the reputation it enjoys in the marketplace. Some standards organizations have a reputation for being highly political and bureaucratic. However, I hear nothing but good things about OAG from its participants. Promoting Cross Industry Standards CIDX is a good match for OAGi, as it shares a similar vision of cross-industry standards. CIDX has always promoted the idea of cross-industry standards. Even before the recent announcements with OAGi, CIDX worked closely with other industry associations such as papiNet in the forestry sector; GUSI in the consumer products industry and RAPID in the agriculture community. Under the OAGi leadership the opportunity for collaboration with other industry sectors should be accelerated enabling even faster growth of XML.

Read More