XML: The new face of e-commerce

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XML, a way to code documents for easy transfer between applications, is widely seen as a key enabling technology for e-commerce in the future. Today's HTML-based Web just can't provide the flexible searching and data exchange that format-neutral XML conveys. But the World Wide Web Consortium's (W3C) XML 1.0 specification, now more than 1 year old, hasn't been enough to grease the wheels of e-commerce. Trading partners still have to agree on what each XML-based business document will look like in order to ensure the smooth exchange of information online.

If this challenge sounds familiar, that's because it's the same one faced when using an older e-commerce technology, electronic data interchange. For years, EDI users met in long sessions to hammer out document types, such as purchase orders and shipping notices, that became the X12 or EDI for Administration, Commerce and Transport (EDIFACT) standards used today by the transportation, manufacturing, grocery, retailing and computer industries.

Many large corporations, such as Wal-Mart, Mobil and General Motors, require their trading partners to use EDI documents for certain business transactions. Even though EDI data can be captured through Web forms these days, EDI is still considered time-consuming and expensive to deploy between trading partners. There are already signs XML may usurp EDI's role in e-commerce.

When start-up ClubComputer in Nellies Ford, Va., began selling a large number of PCs over the Web, the company was asked by its distributor, Merisel, to start using EDI instead of e-mail to send purchase orders to Merisel representatives.

This would eliminate the need for Merisel representatives to retype ClubComputer's data into back-end ordering systems.

"When I looked at the expense of that, mapping the EDI data and paying for the value-added network, I said, 'I can't really afford that,'" says Dennis Tracz, CEO of ClubComputer. "And we really don't have the expertise for [working with EDI]."

Rolling out EDI would have cost ClubComputer roughly $25,000 per month, Tracz says. So the company instead joined an early effort by Merisel to receive sales data using XML for computer-to-computer exchange between sellers and the distributor.

Using OnDisplay's XML repository, ClubComputer can transfer order data it gets over the Web directly into a Merisel enterprise resource planning system. Merisel generates shipping notices and other updates and sends them to ClubComputer's OnDisplay repository using XML.

While at $100,000 the OnDisplay XML repository doesn't come cheap, Tracz still thinks he's doing better than he would with EDI.

While most companies have yet to begin rolling out XML technology across their enterprise or interenterprise networks, the word is getting out about XML's potential.

Baylor Health Care System, a hospital chain headquartered in Dallas, is testing Sequoia's XML repository to store all patient transcription records it receives. The idea is that in the future, Baylor can make these available to what it calls the "physician's Webtop," a network client for doctors.

Mike Miller, Baylor's chief technical architect, says he's following the lead of the health care industry's HL7 standards group on how XML should be used. "The HL7 standards group decided the third version of its standard -- which has so far been similar to X12 EDI -- will be based on XML," Miller says. He expects to see medical records forms based on HL7 work during the upcoming year.

The computer and electronics industries are among the most determined to make XML a key part of their supply chain processes. About 100 companies, including Intel, SAP, 3Com, Hewlett-Packard and Federal Express, are corporate members of the RosettaNet consortium, which has the goal of completing a full set of XML-based business documents and processes by next February.

RosettaNet CEO Fadi Chehade, who used to run Ingram-Micro's EDI and e-commerce group, explains RosettaNet's reason for being: "There just aren't enough bodies and time to do EDI on the Web."

RosettaNet is busy defining about 100 "Partner Interface Processes (PIP)," XML-based messages detailing ordering, returns and other practical matters of concern to the computer and electronics industries. However, just coming up with these PIPs won't be enough because they will need to be used with either the simplest of XML documents, called Document Type Definitions (DTD), or more complex XML constructs called Schema.

There are now a multitude of industry groups defining DTDs and Schema, and standardization has become a problem.

The W3C, which doesn't formally consider itself a standards body, expects to soon complete its XML Schema specification, which should provide a baseline for XML document interoperability from application to application.

Meanwhile, Microsoft has rushed ahead of that effort with its XML Data Reduced (XDR) Schema, which may be on its way to becoming a de facto standard. Industry groups designing their own DTDs or Schemas are proliferating like mushrooms after the rain (see graphic).

Chehade worries that XML may be turning into a modern day Tower of Babel. "The problem is to get a dialog between two machines, and we need to agree on the words, and we need the grammar," he says. To stay in sync with current major technical efforts, RosettaNet is readying three versions of its PIPs: one for use with DTDs, one for the W3C's XML Schema and another for Microsoft's XDR.

Vendors are addressing the Tower of Babel issue by rolling out business-to-business application servers designed to convert between various XML data types. Bowstreet, for example, boasts that its Web Automation Factory can handle the XML document exchange challenge through a template-based technology. Service providers and product makers including CommerceQuest and WebMethods make similar claims.

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