News analysis: Different B2B standards could complicate things

SAN FRANCISCO - On a rainy afternoon inside the San Francisco Hilton last week, RosettaNet - the Santa Ana, Calif.-based nonprofit consortium that's trying to standardize B2B e-commerce interfaces for use by companies doing business across a supply chain - served up an un-standard industry briefing.

In three minutes, executives from Intel Corp., Compaq Computer Corp., Cisco Systems Inc., Motorola Inc., Lucent Technologies Inc., Arrow Electronics Inc. and other major technology vendors all managed to agree on the same thing: They said their companies had succeeded in meeting the target date for implementing RosettaNet's Partner Interface Processes, or PIPs.

A PIP is a specialized system-to-system, XML-based "dialog" that defines how business processes are conducted between trading partners in a supply chain - as if you and I agreed that a certain shade of blue is indeed the same color, even though we're in different locations and use different kinds of pens to put the ink on paper. Currently, RosettaNet is focusing on PIPs for use within the high-tech, electronic components and semiconductor industries.

Jennifer Hamilton, the organization's CEO, says about 80% of the technology and component vendors that are members of the RosettaNet board have now connected with trading partners to implement PIPs. To be sure, this looks to be a positive development for those who must work within a supply chain.

For example, Joe Lucadamo, director of people and asset effectiveness at Lucent Technologies Inc., says his company has built PIP-based links to 30 customers and is looking to use the technology to foster higher revenue growth rates and cuts of 50% in product-design costs and 75% in risk assessment expenses related to product life cycles.

Dave Westmoreland, CIO at component distributor Arrow Electronics Inc., says workers at his company can access pricing and inventory data from suppliers "at the click of a mouse" because of PIPs. And real-time sales ordering capabilities mean Arrow doesn't have to build an extra day into the supply chain just because its suppliers might miss the Federal Express afternoon shipping deadline if they take orders over the phone, Westmoreland adds.

Hamilton says RosettaNet, which has 300 members, is committed to sticking with the standards it's developing and is even thinking about releasing a RosettaNet badge of approval for software products that implement PIPs.

But a key question looms: Who is going to enforce these standards? Right now, RosettaNet is counting on its open, common e-business processes based on nonproprietary standards. However, the progress of implementing the RosettaNet standards will stir debate about the future role of electronic data interchange (EDI) technology.

Developed nearly two decades ago, EDI was supposed to standardize company-to-company transmissions of data such as purchase orders. But over time, more than a dozen different EDI "standards" have evolved. So far, so un-standard - which is why we may need some sort of meeting of the minds in order to produce real B2B standards that stick.

During the summer, The Home Depot Inc. and Procter & Gamble Co. were among a worldwide group of companies that approved a set of basic e-commerce rules, dubbed the Global Commerce Internet Protocol, for business-to-business data exchanges in the consumer goods industry (see story).

This idea of attempting to organize and make intelligible the flow of information between different trading partners is another demonstration of how IT is a driver of business activity - but it also is another standard. Of course, users will no doubt be promised that different standards will interface to another. But how standard is that?

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