EDI announcements may impact document management

Posted by Mark Brousseau

A number of recent announcements in the world of electronic data interchange (EDI) are likely to have an impact on enterprise document management and payment processing in the near future. These announcements foretell a trend in which businesses are increasingly sending electronic documents and electronic business data to each other through “business networks.” Pete Dinham, Global Solutions Director, BancTec (www.banctec.com), explains:

Consider the following announcements:

... SAP (a large ERP vendor) announced they will offer their own "business ready network" for supporting EDI and other B2B e-commerce exchanges titled the SAP Information Interchange. The vision of this solution is to connect all SAP users and their trading partners together in a large business network to simplify data exchanges.

... GXS (the world's largest EDI provider) announced their intent to acquire Inovis (another of the world's largest - top five EDI providers). Both of these companies have been investing heavily into developing business networks and SaaS (software as a service) solutions to be operated in a cloud computing environment.

... IBM announced their intent to acquire Sterling Commerce (the world's 2nd largest EDI provider). Sterling Commerce has also been heavily investing in the business network concept of supporting EDI/B2B in a SaaS business model using a cloud computing environment.

What is motivating all of these acquisitions and activities in an IT sector that has been around for decades and is considered mature?

GXS, Inovis and Sterling Commerce are all legacy EDI companies that are rapidly innovating and setting up “business networks.” They recognize the power and impact that the social networking revolution is having on businesses and their networks of suppliers and customers. They realize that it will change the way businesses have traditionally operated and exchanged data.

Business networks are EDI/B2B e-commerce hubs that enable companies to efficiently exchange electronic business documents and data in a relatively low cost and simple manner. Business networks are similar in many ways to the popular Linkedin and Facebook sites. Companies can join and set up a profile, and then search for their customers, suppliers and service providers and easily connect with them and begin exchanging electronic documents and messages using electronic data interchanges. How is this different than in the past? In the past, if company A wanted to exchange EDI messages with company B, they would have to call company B and negotiate data requirements and data formats. It was often a complex and time consuming effort each time they wanted to connect with a new partner. Business networks let you join the network and simply ask permission to connect with others on it. The data formats and data requirements are all handled by the business network (Hub) in a cloud computing environment.

What does business networks have to do with document management and transactional content management? EDI and B2B data exchanges are part of the transactional content management's chain of custody. Chain of custody refers to the ability to track and trace each movement that an electronic document takes in a business process. Electronic documents/messages/data can originate at a customer or supplier and travel through the business network (EDI/B2B hub) into a company's internal transactional content management system. Invoices are an example of a business document that originates at a supplier and must be received, processed, approved and paid. The efficient flow of external business data between businesses, and then internally using document management or transactional content management solutions enables near real-time processing and end-to-end visibility of transactional data. In these environments many areas of latency and costs are removed from the business process.

Business networks offer simplicity. They remove complexity and the need for expensive investments in legacy EDI and B2B systems and dedicated resources. They make it easy for many more companies to participate. They extend enterprise document management, payment processing and transactional content management visibility all the way from one end of the process to the other. The impact of business networks and social networking on large enterprises is just starting to be understood. The implications are enormous and will be interesting to watch.

For related information on transactional content management, go to http://transactionalcontentmanagement.blogspot.com/.