Corporate users cool toward XML for supply chains

ORLANDO -- XML may be the future technology underpinning of online business-to-business trading, but many companies are in no hurry to get there.

At the EC Forum here, a number of companies with large electronic data interchange (EDI) systems acknowledged that they're only in the investigation phase for using XML tags in their electronic purchases and sales.

"We're on the fringe," said Paul Wadley, a senior EDI analyst at Pawtucket, R.I.-based toymaker Hasbro Inc. "We're looking into XML, and it's something we want to pursue, but we're still not clear on how it's going to impact our business."

Many attendees at the conference echoed that hesitance about XML, noting that established corporations for the most part already have working supply chains. Amy Hedrick, a senior e-business integration analyst at AMR Research Inc. in Boston, said companies aren't going to abandon 15 years of EDI development to move to a system reliant upon XML, especially since there are no widely used standards for the data-tagging language and its more than 100 variants.

XML has also seen slow adoption in certain markets. Chris Maxwell, an e-commerce systems manager at Purchase, N.Y.-based PepsiCo Inc., said the food and beverage world is still rooted in EDI transactions.

"Right now, XML doesn't look like a viable solution in our production environment," she said. Maxwell guessed that XML will be a technology that creeps rather than leaps into PepsiCo's business-to-business trading network, starting with smaller, limited jobs for which the company can see a return on investment.

General Electric's Global eXchange Services (GXS) division hosted today's event. Last year, GXS took the step from being an EDI partner with 100,000 companies toward creating an XML-based electronic public marketplace. GXS CEO Harvey Seegers said the migration has been slow, and he expects that it will continue to be slow. He estimated that about 1% of the transactions GXS facilitated last year were of the browser-based XML variety.

"A lot of companies haven't decided it's more economical to go browser-based," Seegers said. "We could do it today -- make that switch -- but the fact is customers don't want to do it that way."

GXS plans to support both established EDI networks and upstart XML initiatives -- and its executives remain split as to when XML will prove a solid return on investment for businesses with legacy systems and defined supply chains.

"We were told three years ago that XML will change our lives, and it hasn't happened yet," said Otto Kumbar, a GXS vice president. He added that businesses are reluctant to marry themselves to any technology that "is fragmenting at Internet speeds."

Steve Scala, also a GXS vice president, acknowledged that XML won't be standardized and ready for ubiquitous business use in the next year, but he warned that companies need to start preparing for its eventual ascendancy.

"I'll bet you if you ask any vendors if they plan to do any development using EDI, the answer is a big whopping goose egg," Scala said. "We know where this is headed, and it's toward XML."

Just don't expect the change to happen quickly.

"It's a matter of figuring out how the newer technology will interact with suppliers and with our back-office systems," said Larry Martin, manager of e-business development at New York-based Phillip Morris USA. "It's a big question, and we're really just starting to tackle it."

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