Central Lewmar chose a portal because the XML-based system lets the company check suppliers’ inventories in real-time. This helps the company serve its customers, which include marketing, commercial printers and graphic design companies, more quickly when they call to order paper. AMR Research’s Swanton says portals are popular because anyone with a browser can access one. And if the majority of buyers’ trading partners are using the portal, buyers figure it makes sense to go with what the majority uses and coax the minority using EDI onto the new platform. By getting more (if not all) of their trading partners to use the portal, buyers maximize the investment they’ve made in building them. Portals are also attractive to buyers because, as is the case with Central Newmar, they shift the burden of data entry onto suppliers. Buyers integrate their B2B portals with their back-end systems for inventory management, purchasing and accounting, so their business processes associated with purchasing and invoicing are automated on their end.

The problem with automation using portals is that it tends to be one-sided. Suppliers can’t achieve the same level of automation because the Web portals don’t easily integrate with their back-end systems. Suppliers could use a third-party integration services provider to connect their systems to their buyers’ portals—the approach Central Newmar has offered its suppliers. But that’s too expensive for a supplier to do for all of its buyers. Consequently, only one of Central Newmar’s trading partners—International Paper, its largest supplier—is using the portal. Whitfield says some suppliers are reluctant to do business through an intermediary, and others lack the technology to support XML transactions. (For more about how adoption of B2B portals is affecting mid-market companies, see "A Strategy for the Mid-Market," Page 70.)

EDI, meanwhile, has shed some of the disadvantages of the past—batch processing of transactions, for example—that have generated criticism. "Ten years ago, when I worked for an oil company, we ran EDI cycles twice a day" because VANs charged per batch of transmissions sent and companies didn’t want to send them too often, says Arrow’s Settle. Now EDI can be sent over the Internet, providing the real-time advantages of newer transaction methods. While EDI remains a sizeable investment, the Internet makes it less expensive. The VANs have also lowered their prices due to the competition they’ve seen from portals and new standards such as RosettaNet.

Rob Barrett, vice president of solutions engineering for E2Open, which provides software and services that help companies conduct B2B e-commerce, blames the debate over portals and EDI on those vendors who have created products that can’t easily be integrated. Because portal vendors’ solutions can’t process EDI transmissions and vice versa, companies are forced to look to a middleware vendor to integrate those systems, he says. Since most companies don’t want to undertake such costly integration efforts, they’re forced to choose one system, and they tend to choose the portal because more people can access it. Their business partners who’ve used EDI are suddenly forced to use the portal too. "Shame on the vendors for making what should be a discussion about business processes between trading partners a lengthy religious debate about technology," he says.