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Rich Nering of Parker Hannifin and Kirk Kenneway of Reebok recently asked
for information regarding doing EDI through the internet. So there is no
misunderstanding, I work for a third party vendor that hosts internet
solutions for a number of major companies.
I want to try to answer the questions but first I think a little work on
definitions is in order.
My response refers only to Business to Business (B2B) uses on the
Internet and not business to consumer.
Today there are two ways that partners exchange documents using the
internet: 1. Using EDI/INT compliant software and e-mail and 2.
Using HTML pages. Let me briefly describe each.
EDI/INT - Each partner must have a copy of EDI/INT compliant software
for this to work and each partner needs a translator. A document is sent
from your application to your translator which formats the document to the specs
of your trading partner. The resultant EDI document is then sent to a PC
with an e-mail address, running EDI/INT compliant software (Such as Templar,
Cyclone, etc.) This software reads the header, encrypts the message (maybe
compresses the message) and sends it to the appropriate trading partner via
E-mail. Upon receipt by the TP, a network acknowledgement is returned to
you and the message is checked for tampering and to be certain that it is coming
from an authorized source. The message is then decrypted and forwarded to
your TP's translator for handling just as if the message came through his
VAN.
The up side is that VAN charges are eliminated.
The down side is these savings are offset by the acquisition cost for
EDI/INT software and the annual maintenance costs for same. Further all
partners using this software take on additional infrastructure to manage.
Additionally, separate translation maps must be maintained for each TP
specification and for each document traded.
Instituting EDI/INT with your trading partners who exchange large volumes
of documents with you makes economic sense as these documents would reduce
character counts on your van bill and they can probably support additional
infrastructure.
Because of the need for a translator, SMB's can not participate in EDI/INT
for the same reasons they do not do EDI today. Cost, Complexity, Talent
and Technology!
The second way the Internet is used today is to reach all TP's,
even those with no EDI capability, using a secure Extranet and HTML pages for
the transactions. Let me first address how these SMB's can be added.
While the system I'm about to describe works for both your suppliers and your
customers, there are differences in how each side of your value chain
communicates using HTML pages on the Internet. Further there are
differences between running the solution in house or in using a third party,
such as my company, DynamicWeb Enterprises. Let me talk of what I know
- how we work.
Using us to outsource the solution for Vendors, you would send your PO's to
your translator. The translator sends them to the VAN who sends them
DynamicWEB. The document is run through a translator and customized
software that turns each document into a HTML page for each vendor set up.
The vendor needs only a browser on his PC to pick up, download or print his
PO. When it's time to invoice, the vendor goes back to the web site, calls
up the PO and rolls it forward into and Invoice. Data keying at this point
by the vendor can be as simple as entering the Invoice #. The vendor hits
a send button on the screen and the document comes back to us where it is run
through the customized software and translator and then communicated back to you
through your VAN.
Please bear in mind that the above is a simplistic explanation of the
system. I do not want to comment on the capabilities of other third party
companies, but we can managed any EDI document, in any format and in any version
for conversion to HTML and back. Additionally all of a client's business
rules can be incorporated into the solution. (i.e. PO Acknowlegement
sent before ASN - ASN sent before Invoice, etc.)
The up side to this is that all vendors are included in your EC system and
you change nothing. There is no new system or infrastructure to
manage. You simply leverage your existing EDI translator to reach all of
your non-EDI capable vendors. Because all documents for these SMB's go to
us there is only one set of maps to maintain to add all of the SMB
vendors. Your company's cost go down as you become paperless.
The only down side I know of is the VAN bill goes up because of the
additional documents transmitted, but this can be overcome by creating a direct
connection between you and me.
Using us to outsource the solution for B2B Customers requires the creation
of a catalog of the products you will be selling. This catalog can be as
glitzy or as spartan as your budget allows. Customers would have to be
given a suitable incentive to go to the site to place orders, as they will have
to go through the catalog selecting items and quantities needed. In many
cases this will be a redundant operation for them as they probably will have the
paper PO that they have been faxing to you in their hand as they enter the order
on the Net. This order is then transmitted to us and we convert it to EDI
and send it to you using your VAN. Return documents such as ASN's and
Invoices can be posted to the customer's web site just as PO's are posted to a
vendor's site.
The significant down side is getting B2B customers to change their existing
way of communicating with you. There must be a big carrot and a mandate
for this to be successful. (I had a potential client tell me last year
that P&G will only accept PO's form customers via EDI. With no EDI,
the customer was told to buy from a distributor).
Running an Extranet solution in house obviously saves on VAN charges but
takes on new infrastructure. Software to create the HTML pages from EDI is
available from other folks who subscribe to this list serve. That would
have to be acquired, tested, tweaked and maintained. Once the site became
operational, a tele-marketing team would have to be put in place to call vendors
and customers to get them set up on the system and a customer service department
would have to be created to manage call from TP's having difficulty using the
site.
Outsourcing The Extranet to a third party vendor such as DynamicWeb,
eliminates all of these infrastructure issues and speeds the implementation of
the solution. Hence the cost savings associated with EC are realized
sooner.
For a more complete explanation of how the Internet can be used to reach
SMB's, please go to www.dynamicweb.com. There is even a
demonstration of how a buy side solution could work.
Regards,
Herb Allen
National Sales Manager DynamicWeb Enterprises Ph 201-845-8231 fax 973-575-9830 |
- Re: EDI and the Internet Herb Allen
- Re: EDI and the Internet Corey Bihler
