XML offers exit strategy from EDI complexity: Expert

Extensible Markup Language (XML) may provide a reprieve for small and medium-sized businesses whose e-business plans have been stunted by the complexity of Electronic Data Interchange (EDI), according to the president of Toronto-based e-commerce software developer Edisoft Ltd.

“”I think it’s more complicated than it needs to be,”” Bruce Kemp said of EDI.

Kemp was speaking as part of an IT week speaker series panel at Centennial College Monday. The panel, which also included representatives from Microsoft Canada Co., the Business Development Bank of Canada (BDC) and Canada Post Corp., was set up to inform small businesses on how they could leverage the online presence of large organizations. Microsoft pitched .Net, the BDC pushed consulting services and Canada Post touted its automated delivery systems.

But Kemp centered his presentation on how the integrated systems and complex requirements of large companies like Wal-Mart Stores Inc. and General Motors Corp. are hindering the growth of their smaller suppliers and discouraging other small players from supplying them at all.

“”They’re asking people to put things on the invoice that wouldn’t normally be available on the invoice,”” he said, noting that a company like Wal-Mart will demand suppliers include, for example, insurance charges for each line item. “”They’re certainly preventing (e-business) from proliferating.””

While large suppliers like Pespi Co. can dictate their business relationship with buyers, including Wal-Mart, Kemp said smaller suppliers have to conform to the buyer’s wishes. That means purchasing expensive connections and software to hook up with the often-proprietary EDI systems of buyers, according to IDC Canada Ltd. senior analyst Jim Westcott. Kemp said large buyers should simplify their document guidelines to alleviate the pressure on suppliers, but he’s not holding his breath.

Nor should he. “”You look at a lot of large organizations who, in the last 10-15 years have invested a tremendous amount of money in EDI and they’re looking to make their money back,”” said Joe Green, vice-president of telecom and Internet research for IDC Canada. “”They’ve been slow to go to the more open Internet-based commerce systems.””

Internet-based systems like XML are a more cost-effective because they don’t involve proprietary networks. According to Westcott, an XML-based format would be an improvement even if industries adopt their own XML standards as they have done with EDI standards.

“”It tends to go that way. (Businesses) want something more specific to their customers, to their industry,”” he said. “”There’s a possibility that at the granular level, there won’t be something that is overarching.””

But Kemp is hopeful that Electronic Business XML (ebXML), an initiative backed by the United Nations and the Organization for the Advancement of Structured Information Standards, will aid in the standardization of XML business specifications.

“”XML is going to be good in that anyone can view it in a browser (but) it’s not as predictable in the data. (We need) a standard that shows ‘purchase order’ as ‘po_number.'””

But Kemp admitted it will probably be at least three to five years before an XML standard is widely adopted, and said even then EDI might co-exist along with it for another decade.

“”These small companies are just going to have to take it for now,”” he said.

Comment: [email protected]

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