B2B XML Harder than Anticipated

The travails the RosettaNet consortium has experienced in trying to launch its XML-based business-to-business e-commerce standards effort could serve as a bellwether for the thousands of companies that have yet to join the herd.

But IT professionals hoping to learn from RosettaNet's example will have to wait until fall - if not 18 months or longer - before they will be able to take stock of one the earliest industry efforts.

RosettaNet (www.rosettanet.org) is the computer and electronic components industries' nonprofit effort to develop and deploy standard electronic-business interfaces.

RosettaNet members have made significant strides in developing ambitious business-process standards over the past two years, having nailed down 15 so far. But many firms are just starting to complete their first production-ready implementations as they attempt to meet a June 6 deadline.

Arrow Electronics Inc. in Melville, New York, for instance, expects to eventually make a full conversion to transactions based on XML, but right now it's in production with just one trading partner. Cisco Systems Inc. in San Jose is up and running with two distributors. Santa Clara, California-based 3Com Corp. is just finishing up its first trading-partner implementation. Some firms haven't completed any yet.

"It certainly is harder work than people anticipated," said Jennifer Hamilton, president and CEO of RosettaNet, noting that five is the highest number of implemented trading partnerships for one firm she is aware of. "It's pretty easy to slap up a Web site and do computer trading. But when you're actually developing B-to-B connectivity with your trading partners, that's a more challenging undertaking."

And it takes time.

Selectron Corp., a Milpitas, California-based manufacturer of computer products and components, began discussions with one trading partner at the beginning of the year and just went into production earlier this month. Four other implementations that are in the pipeline should go more quickly, taking two to three months apiece, said Ken Ouchi, corporate vice president of strategic transformation at Selectron.

On the technology side, Selectron had to make sure its Extricity Inc. server properly extracted the data from XML forms for translation and mapping to its Baan Co. enterprise resource planning system, Ouchi said.

The Battle for Hearts and Minds

But technology was only half the battle. "Getting the hearts and minds" of the engineering and materials organizations, IT staffs and executive management teams can be a greater challenge, Ouchi said. "This stuff is tough. It is absolutely tough. And it isn't the technology that's tough," he said, predicting it could be 18 months before RosettaNet members show "good economic results."

Back-end integration and business-process challenges drove 3Com to hire Viacore Inc. to help with implementation. The Orange, California-based company, which was co-founded by former RosettaNet CEO Fadi Chehade, will help 3Com link with other trading partners and route transactions between them, said William Coker, Viacore's manager of business-to-business e-commerce.

"That takes away the need for a company like 3Com to engage each one of our trading partners for point-to-point integration," Coker said. "It will cut down the cost of our implementation and rollout."

While that should help escalate adoption, Coker said he recognizes that the deep cultural and business-process changes needed to make RosettaNet flourish could take a few years. "You've got to get your companies behind it and embracing your strategies," he said, noting that 3Com will try to link with a handful of key strategic partners - not "everybody and anybody."

NEC Technologies Inc. in Itasca, Illinois, hasn't been able to hook up with any RosettaNet members yet. It's in development with two firms: Tech Data Corp. in Clearwater, Florida, and Ingram Micro Inc. in Santa Ana, California. "As a manufacturer, [we find] most of the companies we want to do business with are still focusing on their customer side," said Kim Flowers, NEC's vice president of strategic systems and technology.

Flowers also noted the work involved in complying with RosettaNet standards.

For instance, manufacturers must switch to Global Trade Identification Numbers (GTIN), universal codes for identifying their parts. "If you've got hundreds of thousands of parts that have to be identified with a GTIN number, that's a daunting task for many companies," she said.

RosettaNet standards, called Partner Interface Processes (PIP), also aim high.

XML-based PIPsgo beyond merely defining data formats to describing entire business processes such as the many transactions involved in purchase order management.

But despite the many challenges, RosettaNet members are convinced that their efforts will pay off. Hamilton said one company expects a $10 million return from implementing the price-protection PIP alone.

Several analysts said that while the standards progress has been impressive, it's too early to tell whether RosettaNet will ultimately be successful.

"It all sounds really good," said Kim Knickle, an analyst at Boston-based AMR Research Inc. "But until you start talking to people who have really used it, you don't find where all the catches are."

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