UCCNET: QUICK ADOPTION OF STANDARDS FOR B2B LIKELY

DAVID GHITELMAN

PRINCETON, N.J. -- UCCnet here said last week it expects to have as many as 75 companies using its industry-designed, standards-based foundation for electronic commerce by year's end, and as many as 1,000 companies using it by the end of 2001.

Paul Benchener, UCCnet president and chief operating officer, told a news conference here last week the estimate of 1,000 users or "trading partners," as he preferred to call them, was "conservative." The conference was held to mark the launch of UCCnet.

"We are reaching critical mass in a very short time," he said.

Danny Wegman, chief executive officer, Wegmans Food Markets, Rochester, N.Y., one of the six retail and consumer goods companies that have started to integrate UCCnet service into their e-commerce transactions, commented during a panel discussion at the conference on the Princeton University campus that the principal obstacle UCCnet must overcome to achieve that goal is "confusion" in the supermarket industry.

"In our industry," he said, "we didn't grow up with technology." He added, however, that while technology is a tough sell to food retailers, the understanding of the possibilities of e-commerce is growing in the supermarket industry.

UCCnet's other pioneering users are Kroger Co., Cincinnati; Supervalu, Minneapolis; Procter & Gamble, Cincinnati; Pepsico, Purchase, N.Y.; and Ralston Purina, St. Louis.

A not-for-profit subsidiary of the Uniform Code Council, UCCnet will seek to create standards for business-to-business e-commerce, first in the supermarket industry and subsequently in other retail channels.

One of the principle technical aspects of the UCCnet system that was highly touted at the meeting is its use of a single computing language, eXtensive Markup Language or XML.

Using a single, standardized language, Benchener said, would make e-commerce more accessible to smaller companies. "We want to make sure any company could engage in e-commerce," he said.

UCCnet also said standards could make e-commerce more profitable for all concerned. Gregory Weismantel, president and CEO, Vista Technology Group, told the conference that UCCnet would produce an annual, supermarket industry-wide savings of $25 billion on the cost to administer promotions, $3.1 billion through staff reduction and a $27 billion reduction in outstanding production. He called these figures "understated."

One way standardization will produce such savings is by reducing the number of errors that result from companies having to reinput data, according to Scott H. Williams, global e-business director, Procter & Gamble, who has been on loan to UCCnet from the consumer products company. "Thirty percent of information [entered into company systems] is incorrect," he told the conference.

What UCCnet is not, officials of the organization repeatedly explained, is a retail exchange in competition with such for-profit exchanges the GlobalNetXchange, WorldWide Retail Exchange or Transora, all launched earlier this year.

"We are not competing with any other company," Benchener said. "We offer greater opportunity to for-profit companies. We want to make sure any company can engage in e-commerce."

He compared UCCnet to a neutral third party attempting to facilitate e-commerce. "We are like the Switzerland of e-commerce," he said. "What we didn't realize is that it's really tough to be Switzerland."

Fred Geiger, UCCnet vice president of product management, offered several other metaphors. "We're building a compass to point to things you need to do," he said, and then a minute or so later he compared UCCnet to the umpire of a baseball game.

Michael Heschel, executive vice president, information systems and services, Kroger, another of UCCnet's pioneer trading partners, called the idea of bringing standards to e-commerce "the most exciting thing in my 30 years in the industry."

He said UCCnet will not only allow supermarkets "to get all the paperwork out of their systems," but also permit them to "use scan data to pay suppliers or to forecast ordering needs."

Wegman offered a similar assessment. The ability to use one system to track all buying and selling is "a big deal in a system as labor-intensive and transaction-intensive as ours," he said. "What UCCnet will produce is a revolution in how business takes place."