Efficient electronic business transactions

B2B/EDI integration B2B/EDI integration for efficient electronic for efficient electronic business transactionsbusiness transactions

Ivan VaklinovIvan Vaklinovivan@vaklinov.com

ERP Systems & efficiency ERP Systems & efficiency

Enterprise Resource Planning (ERP) system is an integrated computer-based application used to manage internal and external resources.

• Tangible assets• Financial resources• Materials• Human resources

Needed by any largeorganization

ERP systems & CommunicationERP systems & Communication

ERP systems need to efficiently communicate with the outside world in a global economy.

• Manual data entry• Product differentiation issues• Automation needed for any large document

traffic• Vendor lock-in and need for interoperability

standards

B2B & EDIB2B & EDI

EDI (Electronic Data Interchange) Standard for the electronic exchange of

commercial documents. Computer-to-computer exchange of

structured information, with a minimum of human intervention

Business to Business integration (B2B)• Commerce transactions between businesses• Usually via modern Web technologies such as

SOA, Web Services etc.

B2B/EDI scenarios – IB2B/EDI scenarios – I

Between large businesses equipped with ERP systems that possess automatic communications capabilities.

B2B/EDI scenarios – IIB2B/EDI scenarios – II

Between a large company and many small suppliers with a communications capability (Hub & Spoke)

Between a large company and many small suppliers with no automation (Web, Fax etc.)

History of EDI/B2BHistory of EDI/B2B

• 1960s-1970s USA • 1980s - standardization efforts

• 1990s – The internet and beyond

• 2000... - SOA & Web Services

EDI Standards – flat filesEDI Standards – flat files

Flat Files are textual data with fixed length fields typically used by legacy ERP systems (e.g. SAP)

EDI_DC40 3000000000003905072620 3014 E2EDK01005 300000000E2EDKA1003 300000000E2EDKA1003 300000000E2EDKA1003 300000000E2EDKA1003 300000000E2EDKA1003 300000000

EDI Standards - EDIFACTEDI Standards - EDIFACT

United Nations/Electronic Data Interchange For Administration, Commerce and Transport (UN/EDIFACT) is the international EDI standard developed under the United Nations (1980s ...)

UNB+IATB:1+6XPPC+LHPPC+940101:0950+1'UNH+1+PAORES:93:1:IA'MSG+1:45'IFT+3+XYZCOMPANY AVAILABILITY'ERC+A7V:1:AMD'...

EDI Standards – ASC X12EDI Standards – ASC X12

ASC X 12 - U.S. national standards body for the development and maintenance of Electronic Data Interchange (EDI) standards. 1979s...

ISA*00* *00* *01*RECEIVERID *12*SENDERID *100325*1113*U*00403*000011436*0*T*>~GS*FA*RECEIVERID*SENDERID*20100325*1113*24712*X*004030~ST*997*1136~AK1*PO*142~

EDI Standards – TRADACOMSEDI Standards – TRADACOMS

TRADACOMS – Developed in the UK in the early 1980s

STX=ANA:1+5000000000000:SOME STORES LTD+5010000000000:SUPPLIER UK LTD+070315:130233+000007+PASSW+ORDHDR+B'MHD=1+ORDHDR:9'TYP=0430+NEW-ORDERS'SDT=5010000000000:000030034'CDT=5000000000000'

EDI Standards – XMLEDI Standards – XML

XML – Extensible Markup Language(set of rules for encoding documents in machine-readable form)<Order Number=”4325432543”> <Sender> <Address>Main Str. 25, London</Address> </Sender> <LineItem> <Product> <Name>Rolls-Royce</Name>...

EDI Standards - othersEDI Standards - others

A number of standards were developed in the 1980s in Europe ASIA etc. More modern sub-standards exist as variants of XML

• VDA – German automobile industry

• EIAJ/CII/HWSW - Japan• GS1 XML• ebXML

EDI Standards organizations - I EDI Standards organizations - I

EDI standards may be drafted at indurtry, national or international level

• UN/CEFACT - United Nations Center for Trade Facilitation and Electronic Business - http://www.unece.org/cefact/

• ASC X12 - Accredited Standards Committee (ASC) X12, chartered by the American National Standards Institute - http://www.x12.org/

EDI Standards organizations - II EDI Standards organizations - II

EDI standards may be drafted at indurtry, national or international level

• OASIS - Organization for the Advancement of Structured Information Standards - http://www.oasis-open.org

• GS1 (EANCOM) - association dedicated to global standards to improve the efficiency of supply and demand chains

EDI Standards organizations - III EDI Standards organizations - III

EDI standards may be drafted at indurtry, national or international level

• VDA - Verband der Automobilindustrie e., is a German interest group of the German automobile industry

• EIAJ - Electronic Industries Association of Japan (EIAJ) part of Japan Electronics and Information Technology Industries Association (JEITA).

Example EDI interchangeExample EDI interchange

Based on an EDIFACT example, the most common messages types are related to processing ORDERS and INVOICES

COMPANY A COMPANY BORDERS

ORDERSP INVOIC

Many different message types exist...

Communications standards - ICommunications standards - I

EDI predated the internet explosion in the 1990s...

• Modems - 1970s-1990s (point to point communication between partners)

• ISDN - Integrated Services Digital Network• X.25 – reliable WLAN protocol during 1980s

and early 1990s• OFTP/OFTP2 – FTP based transport protocols

that include features like encryption, compression etc

Communications standards - IICommunications standards - II

More advanced communications were made possible by advances in the 1980s and later the internet...

• VANs - Value-added Network (hosted service offering that acts as an intermediary between business partners. Offers reliable messaging, auditing etc)

• AS1, AS2, AS3 – modern protocols offering encryption, reliability, disposition notifications etc based of SMTP, HTTP, FTP

Communications standards - IIICommunications standards - III

Web services came along simplifying integration...

• Web Services/SOA – standards for system design providing greater interoperability and flexibility

• SOAP/WSDL/UDDI – technologies that implement SOA on the basis of HTTP(s), XML etc. that are most commonly used.

B2B Gateway features - IB2B Gateway features - I

Modern B2B gateways need to support...

• SOA/ESB (enterprise service bus) Capabilities – suitable for integration of multiple services and their “orchestration” into larger more complex ones.

• BPEL - Business Process Execution Language. OASIS standard for “orchestration” of web services. Defines business processes composed of service interactions.

B2B Gateway features - IIB2B Gateway features - II

Modern B2B gateways need to support...

• Communications support – all commonly used protocols.

• TPM (Trading Partner Management) and usability – centralized and easy to use interface that allows manipulation of all data relevant to trading partners (e.g. how to connect)

• Document/message tracking and audit functionality

B2B Gateway features – IIIB2B Gateway features – III

EDI document conversion and mapping design capabilities..

• Should support all common data formats

• User-friendly mapping design

• Modular/reusable mappings for large deployments

B2B Gateway Products (high end)B2B Gateway Products (high end)

High end B2B gateways have a comprehensive feature set...

• Biztalk Server (Microsoft)• XI eXchange Infrastructure (SAP)• Business Integration Server (Seeburger AG)• B2Bi (Axway)• B2B Integration (Sterling)• e-Commerce Gateway (Oracle)• others...

B2B Gateway Products (low end)B2B Gateway Products (low end)

Low end products possess a subset of features making them applicable to small companies...

• Bots open source EDI translator - http://bots.sourceforge.net

• Webswell Business Hub (hosted), Websswell Connect and others (open source) - http://www.webswell.com

• Celtix: The Open Source Java Enterprise Service Bus - http://celtix.ow2.org

• Simpler tools, hosted solutions, SAS ...

Example product – BOTS IExample product – BOTS I

BOTS is a free/open source EDI product suitable for small deployments

• Written in python and uses an embedded database or can use an external one

• Presents a relatively simple Web configuration interface to the user

• Customization involves programming/ scripting.

• Defines channels/routes/translations that can be scripted

Example product – BOTS IIExample product – BOTS II

Route:

Channel:

Translation:

EDI Implementation (large)EDI Implementation (large)

Project stages

• Business case analysis

• Product selection (features, cost)

• Process design and communications rollout

• Mapping design (high effort)

• Infrastructure, administration etc.

EDI Implementation (small)EDI Implementation (small)

Project stages

• Business case analysis – usually requirements set by larger partners

• Product selection (features, cost) – choose a suitable cost effective product or develop something in-house

• Process design and communications rollout - simple

• Mapping design – a few mappings• Infrastructure, administration etc.

EDI in Eastern Europe - IEDI in Eastern Europe - I

• EDI is typically shunned by small companies because of costs and perceived lack of real necessity

• EDI implementations typically come as a result of requirements by large companies (e.g. market chains) or western partners

• Lack of trained consultants on legacy standards like EDIFACT, ASC X12, VDA and similar that are demanded

EDI in Eastern Europe - IIEDI in Eastern Europe - II

• Ad-hoc implementations that are easy starters but offer no flexibility later on

• Small ERP vendors aiming for customer lock-in

• Need for EDI questioned at a time of crisis by small companies

Legal issues in EDILegal issues in EDI

• (Contract) Laws needed consistent with EDI (or need to back up EDI documents with paper ones, possibility of accumulation... )

• Legally binding contractual arrangements (Trading Partner Agreements, valid under contract law and based on EDI standards accepted as national standards - eases contractual disputes)

• Document retention policies, and use of third party mediators (VANs)

ConclusionConclusion

Q & AThis presentation may be shared and used under a creative commons license:

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