Standardizing the New E-Business Platform: Lessons from the EDI Experience*

It is sometimes assumed that the Internet provides a sufficient basis for conducting business electronically. Early forms of electronic commerce, which essentially consisted of a web page on which products were described and orders could be placed, may have reinforced such a belief. However, even in the online retailing area it is now clear that conducting electronic business requires a sophisticated infrastructure for information discovery (prices, suppliers, quality, credibility) and settlement (payment, delivery). Regarding the business relationships between companies, these requirements are even more demanding since electronic forms of business are meant to automate large parts of the involved business processes. To enable the automation of business processes across company borders, a "common language" is required which allows information systems to automatically handle deliveries and purchases. The experiences made with earlier forms of electronic business (Electronic Data Interchange/EDI) allow us to understand these requirements in great detail. Now, a new platform for conducting electronic business between companies is emerging (based on the XML standard) which promises to significantly lower the costs of automating company-spanning business processes. In order to realize this potential, the basic XML platform needs to be extended to cover all functions addressed by EDI systems. How should this task be accomplished? Specifically, which types of organizations should be involved with which parts of the whole standardization process? This paper will address these question by drawing on the experiences made with earlier EDI systems. Introduction Electronic Data Interchange (EDI) implies the connection of business applications across company borders (Swatman/Swatman 1992). Thus, the main issues to be dealt with are systems integration and legal. On the one hand, computerized information systems must be enabled to "talk" to one another; on the other hand, the exchange of data between computerized information systems has legal implications since exchanged data may trigger certain actions such as shipment of products to customers which involve a change of ownership. For example: The inventory management system of a manufacturer's raw material warehouse recognizes that the order point for one type of material has bee reached. This information will trigger a purchase request message to be sent to the company's procurement system which will then automatically or semi-automatically create a purchase order. This will be sent, over a Wide Area Network (WAN), to a pre-selected supplier's distribution system where it automatically or semi-automatically triggers delivery of the requested materials. Thus, a purchasing contract will be concluded …