Michael Cure and his friends had a simple plan to help them to stay competitive in a tough economy.
The group of small-business owners founded the Electronic Data Interchange Users' Group. All they had to do, they thought, was learn everything possible about EDI technology, pool their resources, purchase some equipment, and start applying for those juicy government contracts that always seemed to go to large EDI-enabled companies.
But then something came along that ended those dreams, and the newly formed users' group as well. It was called the Internet.
"As soon as NASA put its supply chain on the Web, we knew it was all over," said Cure, whose brief experience with EDI more than 10 years ago turned out to be a sign of things to come.
Today, IT industry analysts point out that the Internet has all but put a stop to new investments in the often proprietary and highly expensive EDI method of information sharing between firms and their supplier networks.
Instead, most companies now use a combination of Extensible Markup Language (XML) and the World Wide Web to format and send business documents to one another electronically. The method is inexpensive, readily available, platform-independent and anyone can do it.
To be sure, there is still a major installed based of EDI users, consisting mostly of giant industrial companies that have had the same supplier networks for years. There are also myriad companies selling EDI-related software, appliances, intermediary services and the like.
This is where the debate over EDI comes into play. Some believe the technology is dead or dying. Others say its market is frozen, never to grow or shrink again. But a third group sees a future where business-to-business commerce entails EDI and XML regularly interoperating with each other -- a future that would require significant activity on the part of international standards bodies.
Sara Radicati, principal analyst with Palo Alto Calif.-based research firm the Radicati Group, used the analogy of an aging automobile to describe the state of EDI today.
"Some models went out of production 10 years ago, but people still drive them," she said. "If you've got it in place and it's still working, you're still going to use it ... . But it's not something that anyone is making any new investments in."
Sean McGrath, CTO of Dublin, Ireland-based Propylon, an XML solutions company, takes Radicati's sentiment a step further. He said his company regularly helps other firms migrate from EDI to XML-based systems.
Pierre Fricke, a senior analyst with Port Chester, N.Y.-based D.H. Brown Associates, is of the mindset that EDI and XML were born to work in conjunction with each other. He believes EDI is still very much relevant and that XML and Web services technologies will only serve to complement it.
"There are translation mechanisms to connect XML and EDI together," Fricke said. "There are integration servers that can interact with EDI-based data flows and connect to other applications through XML."
Incidentally, Fricke said, people should also keep an eye on Electronic Business XML (ebXML), a flavor of XML designed specifically for securely trading business documents online. "It's the embryonic emerging standard," he said. But for this format to really take off, it has to win the endorsement of IT big-timers IBM and Microsoft.
Just last week, Microsoft announced that, in conjunction with software company Inovis Inc., it had created a system to translate EDI documents into the XML dialect used by Microsoft Business Network.
Bryan Beske, chief information architect at Worthington Industries and an 11-year veteran of EDI technology, expressed doubts about XML's worthiness as a replacement for EDI.
"As a heavy manufacturer, our mentality is that, if it isn't broke, don't fix it," Beske said. "EDI is a proven technology, and I don't really think that it will go anywhere."
He said that XML is good for moving information from application to application, but that he doesn't see it taking off in terms of transmitting mainstay business documents like purchase orders, invoices and advance shipping notices.
"By and large, most businesses' core business transactions are EDI. EDI is tried and true," Beske said. "All of the hype around XML isn't really coming to fruition."
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