Remember EDI?
According to the hype of the new digital age, Electronic Data Interchange is due to be forgotten anytime now.
It served the industry well, albeit imperfectly, for more than two decades, and now that standards are imminent for eXtensible Markup Language, the rumor is that EDI in short order will be replaced by XML and the B2B exchanges.
Not.
Because of big investments in past technology, and recent advances in using the Internet for transmitting EDI purchase orders and invoices, EDI will be with us for many years to come, some experts say.
They give it five to seven years -- and possibly more as it coexists with XML data transmission and translation.
"If you look at people who are already up and running on EDI, with existing suppliers and existing transaction sets, there is no real reason to move away from that," said Gary Herman, chief information officer, Unified Western Grocers, Commerce, Calif.
"We see EDI today as still growing fairly rapidly," said Greg Zwanziger, director, electronic commerce, Supervalu, Eden Prairie, Minn.
"As we project out into the next three to five years, we see EDI continuing to grow. It is fairly well established. The technology is stable. There are a lot of good things happening there yet. But I think we will see it gradually slow down as the new exchanges come up and as XML develops," he said.
"EDI is not going away, but it is evolving," said Ed Null, EDI business systems analyst, Giant Food, Landover, Md. "People who invested in traditional EDI will keep those systems, but will probably move on to XML and all that."
While XML is in the future and has been fast-tracked by many in the retail industry, some development will continue on EDI, noted Steven Rosenberg, technical manager, e-commerce, Uniform Code Council, Lawrenceville, N.J.
"EDI is not dead. EDI will not be dead for the foreseeable future, although its use will likely go down over the next five or so years. A lot of work will continue in EDI, probably in very limited new development.
"But those companies that have invested heavily in EDI have a base structure that, as long as it is providing them with the mechanism to move the information, there is no reason to pull it out," he said.
UCC will continue to support EDI, added Ted Osinski, vice president, e-commerce for the council.
"Our business strategy clearly states that we will support EDI as long as there is a demand. Furthermore, we will actually build bridges between EDI and XML for the users to leverage their legacy investment.
"Not many organizations are doing that, but we are. We recognize the importance of EDI," he said.
Osinski sees EDI and XML coexisting for many years.
"I'm not ready to sound the death knell for EDI," said Ken Fobes, chairman, Strategy Partners Group, Ponte Vedra Beach, Fla.
One of the biggest complaints about EDI is that only the biggest companies can afford to implement it, thus retailers are forced to process purchase orders and invoices from their many smaller suppliers using old paper-based methods.
The solution is moving these transactions online where all a supplier needs is an Internet-enabled computer to send and retrieve the "paperwork" electronically.
In the future, these will be based on XML, a language used for defining data elements on Web pages and on business-to-business documents.
XML is similar to HTML (hypertext markup language), which is used for most Web pages today, but XML is fast becoming the standard language of the Internet, especially for B2B purposes.
New services already promised or talked about by the big exchanges -- GlobalNetXchange, San Francisco; WorldWide Retail Exchange, Alexandria, Va.; and Transora, Chicago -- will either enable XML transactions over the Internet or provide EDI translation services.
The functions are coming on soon and will be facilitated by the XML e-commerce standards created by a cooperative effort of leading international organizations, fronted in the United States by the UCC, and due for release on July 1.
This would replace the value-added networks that now convey most EDI transactions.
But in the meantime, services using traditional EDI and traditional Web pages are gaining popularity with supermarket companies and their smaller suppliers.
They fill a long-unserved need and reportedly work so well that they might survive long after the XML evolution takes hold.
Among the companies providing such services are TradeWind EC, Dallas; Advanced Data Exchange, Newark, Calif.; GroceryEC.com from Edict Systems, Dayton, Ohio; and Cyclone Commerce, Scottsdale, Ariz.
Many of the major players in the retailer and wholesaler communities have signed up for these, or are looking at ways of doing it themselves.
"We are looking into some of those possibilities, as well as building our own extranet Web forms that would allow small vendors to come to our Web site and use our own stuff," said Becky Pickett, development manager, e-business, Ahold Information Services, Greenville, S.C.
And it's not just the industry giants like Ahold that are doing this.
Ten-store Harmons, West Valley City, Utah, widely regarded as a technology leader, has made implementation of an XML-based Internet program for EDI a high priority, said Ken Pink, vice president, information systems.
"We have to compete," he said. Harmons' interest is being driven by larger vendors, such as Frito-lay, Nabisco and Coca-Cola, he noted.
"Up until two or three years ago, we couldn't afford classic EDI over value-added networks. Now that there is some Web-based stuff, and some XML, we are starting to work in that arena much more, because cost-wise I think that is something we can make happen," Pink said.
Harmons has asked its back-office software provider, Tomax Corp., Salt Lake City, to develop it. Tests have begun "and that's something we are turning on in pieces right now," he said.
"XML and the new Web-based technologies are lowering the entry point to where small independent chains can get involved, but I haven't seen anybody who really has targeted that market well yet.
"Everybody still seems to want the big guy -- and I understand that -- but that's something I am starting to see come now," he said.
Unified Western Grocers recently implemented the TradeWind EC program, said Herman.
"We think that to gain the value of EDI, we really need to get as close as we can to 100% participation from all of our suppliers; the Internet-EDI solution is a good alternative for a significant number of smaller suppliers," he said.
"We as an industry have been doing EDI purchase orders for 20 years now, and very few companies have gotten to the point where they have 100% implementation. Because it is a low-cost alternative, I think the Internet is a great way to get there.
"I don't believe this is something that the exchanges are really focused in on and I'm not certain there's a return for them based on the fact that there are companies like TradeWind EC that can provide that service," he said.
Nash Finch Co., Minneapolis, also started using TradeWind EC recently.
"This allows us to get very, very close to 100% EDI and therefore start eliminating some of the manual inefficiencies in processing data between us and the vendors," said Bruce Cross, senior vice president, business transformation.
Supervalu is using a similar service -- GroceryEC.com from Edict Systems, noted Zwanziger.
"I see that kind of system as a good complement to EDI. It helps the smallest players out there get involved with EDI and communicate with us, but they don't need the technical sophistication of the large-to-medium-sized companies.
"They can get hookups on a real-time basis, they get easy access to data over the Web, and the larger trading partners that want to do EDI still get fully integrated solutions into their back-end systems," he said.
But some industry experts characterized such systems as a temporary solution until XML is fully implemented.
"It depends on how well they are adhering to the emerging standard, but I would say they are more of a stop-gap," Fobes said.
"It's a nice transition strategy," said Thomas Murphy, president, Peak Tech Consulting, Colorado Springs, Colo. "If you have an EDI infrastructure and you as a retailer want to move to XML, you can get an interpretation service that interprets the inbound EDI from your vendors into XML and you can use that within your system to your benefit.
"Then, as your vendors are capable of changing over to XML, they can do that and you don't lose communications with them. So to me those interpretation services are basically an intermediary service until the preponderance of transactions are XML."
But this may take as long as five to seven years, he added. "I'm pessimistic when it comes to the grocery industry because of its conservative nature."
The EDI-Internet systems "represent a new business plan for new enterprises and that is absolutely valid," said Rosenberg.
"Anything that improves the trading partner relationship, anything that helps reduce costs within the supply chain is an improvement to everyone involved," he said.
Meanwhile, XML will continue to grow because it is native to the architecture of the Internet, he said.
So far, XML has been much more difficult to implement than a lot of people thought, Zwanziger said.
However, he said the coming standards will help greatly, "and that is really critical for the exchanges, where I see XML starting to take off as we build new Internet-based applications."
