XML Messaging Inter-retailer Interface

The Internet is becoming a full-fledged channel for consumer

and B2B e-commerce. Gartner Group forecasts worldwide B2B online sales to hit

$403 billion in 2000, then increase to $923 billion in 2001, $2 trillion in 2002

and finally $4 trillion by the end of 2003. Its estimated $7-trillion peak in

2004 represents 7% of the total forecasted $105 trillion in global sales

transactions. The combination of investment financing and spending over Internet

commodities will add to an unstoppable growth in the B2B sector. IT is the key

to keeping up with the ever-changing retail environment. Retailers are focusing

on changing retail IT systems to take advantages of these changes. This aims at

dynamic sharing of information between new and existing trading partners in

order to enhance the supply chain efficiencies, from manufacturers of raw

materials to retailers.

Retail exchanges

Electronic

market places are changing the way retailers trade with suppliers and other

companies. Several e-commerce initiatives are taking shape to establish B2B

trading hubs that match retailers’ needs with their suppliers. B2B retail

exchanges bring multiple buyers and sellers in a central hub where they can

collaborate and negotiate. One example is the world-wide B2B retail exchange

program, a joint effort by major retail companies in the US and Europe with the

goal to bring together more than 30,000 stores with annual sales of well over

$300 billion. This is to enable retailers to communicate and do business with

suppliers more easily over the Internet. It will provide for public and private

sharing of data and also include auction capability.

Retailers now face the challenge of developing a framework to

integrate retail information systems to take advantage of Web-based

technologies. They can do this by interfacing their back office systems,

inventory, sales processing and credit authorization applications with new

point-of-sale kiosks and trading-partner systems. This calls for an open system

standard to build the retail business interfaces by providing a way of

specifying data interchange that is truly independent of platform and

technology.

Retail enterprise data in XML

The Association for Retail Technology Standards (ARTS) has

developed a retail data model. In doing so, it has made a major contribution to

the possibility of mixing software from different vendors in retail. ARTS is

spearheading an initiative to develop new architectural specifications and

standards. These would be adopted uniformly by software developers and hardware

vendors for technologies deployed in stores. Top retailers in the US who are

council members of ARTS have contributed to the evolving the retail data model.

To achieve the objective of fully integrating the retail

applications of both the retailers and their partners, ARTS has come up with a

new initiative called the ARTS Retail Enterprise Data model in XML. The data

model will identify the entities in the retail enterprise and specify data

associated with each. The retail enterprise data model in XML is concerned with

identifying the key business processes, their supporting systems and specifying

the messages that pass between these systems. Thus, XML messaging has the

potential to reduce retailer technology costs, help rapid application

development and achieve fully-effective interworking between heterogeneous

software components in a retail enterprise.

Internet messages

XML messaging has a huge potential and the initiative by ARTS

has attracted volunteers from some of the best-known retailers in the US. With

this level of support, retail enterprise data model in XML is well on way to

having initial messages in two areas. "Pricing", in cooperation with

Microsoft’s ActiveStore, will help ensure that retail systems can provide the

accurate price for all items across multiple channels. "Customer" will

help ensure that consistent data is provided at each customer interaction, and

that a single customer profile is available for all sales channels.

Once the standard XML messages for these areas are available,

retailers will be able to reduce cost as they move towards a customer-driven

retailing model. The retail enterprise data model in XML is intended to provide

these messages as rapidly as possible. As software developers adopt these

messages, B2B exchanges and ASPs, retailers will be able to communicate

effectively.

XML development process

The ARTS data model committee will be working to present the

data definitions in XML format. The major tasks involved in development of a

process for uniform XML messaging are:

• Identify and
  
  describe major retail systems. The aim here will be to classify the business
  
  functions in the way that is most practically helpful. It must relate to the
  
  understanding of retailers, and map conveniently to actual and potential
  
  software packages

• Identify and
  
  define the cases that illustrate how the systems play together

• Define the
  
  messages within the use cases

• Define the
  
  business rules for message orientation and sequencing

• Specify the
  
  precise message contents using XML and the ARTS data model dictionary.

The XML strategy will be:

• To move from a
  
  transaction process to a process focus

• To establish a
  
  foundation that will let users conduct trade using platform-independent
  
  standards and quickly take advantage of emerging technologies

• To make it
  
  transparent for users of current EDI to conduct trade.

EDI and XML

XML should not be viewed as a replacement for electronic data

interchange (EDI) but should be considered as a technology that will supplement

the usage of e-commerce. Many retail organizations have implemented EDI

infrastructure and their investments will be protected. The EDI volume may not

be increasing at a rate of 30% per year as it did in the 1990s but it is rising

at a healthy 50%. EDI has met most of its goals in e-commerce applications,

helping organizations share and exchange information. However, it has some

challenges as industries have moved to the integration of supply chain with

thousands of hub-and-spoke participants, and away from the current smaller

hub-specific implementations.

The main challenges for EDI are as follows:

• Complex mapping
  
  is required when a legacy application that does not support EDI is tied to
  
  an EDI translator software. There are often hundreds of data element
  
  meanings that must be mapped between the EDI and legacy application, formed
  
  into records, which are then packaged into a transaction

• EDI is built on
  
  technologies of the 1970s. Data exchange protocols and batch-oriented legacy
  
  systems that do not support real-time exchange of data

• Lack of
  
  penetration into SMEs.

The next wave of e-commerce will require massive amounts of

application integration across multiple organizations, as trading partners turn

to the Internet to automate supply chains, forecasting systems and new types of

business interchanges.

Bala Subramaniam



is business development manager with Wipro Technologies, Santa Clara, USA