B2B E-Commerce - How to Keep the Web from Becoming a Trap

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Arrow supports many B2B data standards, including EDI, RosettaNet and other XML standards, portals and flat files. The $11 billion company distributes electronics products such as semiconductors from 600 suppliers to more than 130,000 OEMs, and provides some business services, such as inventory management. To cope with each trading partners’ technical requirements, Arrow used a development platform from WebMethods to create software that converts files from the variety of formats it receives from customers to formats that Arrow’s systems can handle.

A preprocessor program identifies who sent a particular transaction, the type of transaction (whether it’s a purchase order, an invoice or an advance shipment notice, for example), the format (Excel file, EDI, RosettaNet or something else), and the data that’s contained in the file. A mapping program converts the file from whatever format the customer used into formats Arrow’s financial and order-entry systems can process. Within the mapping program, Arrow developed one generic data map for each type of transaction. For example, a customer’s purchase order will be converted to the generic map Arrow created for purchase orders.

The maps make it easy for Arrow to bring new trading partners on board, regardless of what technology they use, says Donna Cozzolino, Arrow’s e-commerce director. "We have about 4,000 different types of partners and transactions, yet we only have about 800 mapping programs, because we created these generic maps that developers can reuse." Finally, a post-processor program determines to which of Arrow’s systems the file needs to be sent: Purchase orders go to the sales order-entry system, invoices to the financial system. For data conversions that can’t be automated, Arrow keeps labor costs down by using offshore developers for the hands-on work.

Meanwhile, Hitachi Global Storage has found a way to reduce its EDI costs—without forcing trading partners onto new platforms—by outsourcing its EDI operations to an electronic hub operated by E2Open, one of a number of companies such as Sterling Commerce, GSX and Viacore, that operate B2B exchanges and facilitate B2B integration.

The company had used electronic data interchange since 1996 and spent "a good fraction of a million dollars" annually to maintain its EDI infrastructure, says CIO Jayaraman. But Jayaraman figured he couldn’t dump EDI wholesale because so many suppliers use it.

The company had already deployed software from E2Open to facilitate collaboration between its factories in the Philippines and Japan and those factories’ suppliers. So Jayaraman decided to use the pipe it had already established for that purpose to send EDI documents through the hub. In this way, Hitachi Global Storage has been able to decommission its entire EDI infrastructure without undoing any existing automation used by its trading partners. E2Open maintains an EDI infrastructure for its customers and updates it as needed. For example, if one of Hitachi Global Storage’s business partners establishes a new location, or if a business partner wants to add another transaction, E2Open will add the new IP address or transaction to the existing EDI maps and protocols. Jayaraman says the move to E2Open paid for itself in nine months.

For suppliers such as Panasonic’s Jeanos, who also uses E2Open when dealing with some customers, such a solution isn’t ideal, but it’s better than using proprietary portals and manually keying in thousands of lines of purchase order data. He has been pushing buyers who want him to dump EDI to consider the drawbacks of such a move. In the process, he says, he has been able to forestall indefinitely having to use two of his customers’ portals. "They have agreed to let Panasonic be the last supplier to roll onto their [portal]," he says. In other cases, he has convinced buyers to push files to him electronically, or to allow E2Open to pull data from buyers’ portals and transmit it electronically to Panasonic. Although E2Open presents an additional cost for Panasonic, Jeanos says, "I’d rather have E2Open push files to me electronically than have someone fatfinger in information."

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Copyright © 2006 IDG Communications, Inc.

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