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

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