The Pain and Gain Of Integrated EDI
Part One: The Pain of Integrated EDI
P.J. Jakovljevic - March 21, 2005

The Pain of Integrated EDI

There is more to the “best-of-breed versus integrated suite” dilemma than mere data synchronization between two disparate enterprise applications. Electronic data interchange (EDI) capability, which for some high-volume industries like automotive suppliers has become a unpleasant required, has been made more dangerous by the level of work that must be dedicated to ensure the accuracy of incoming and outgoing messages. Namely, all EDI solutions from the traditional value-added network (VAN) providers like Global, Sterling Commerce, SPS Commerce, or Inovis provide the fundamental translation process, converting incoming files, such as schedule releases and forecasts into something readable and understandable. These solutions must also convert outbound data, such as invoices, purchase orders (POS) and advanced shipping notices (ASNs) into an acceptable format that can be received by the supplier.

The continued attractiveness of EDI is that it basically works. It has developed into a near perfect system because a swath of companies have invested heavily in it over many years, despite the inevitable costs with getting it up and running. Still, for some enterprises, there are some barriers to using EDI, or at there are at least some compelling reasons to use a Web-based extensible markup language (XML) approach to exchange vital business documents such as purchase orders, delivery notices and invoices. Traditional EDI can be an expensive way to conduct business—prohibitively expensive in some cases of smaller start-ups. Also, its rigid message structure means that companies wanting to perform EDI transactions must beforehand agree upon a common standard to ensure continuity and avoid translation problems.

To complicate things even more, as the preferred standard for batch format transactions for nearly three decades, EDI has proliferated numerous, incompatible variants because EDI users have frequently customized standards to better suit their needs and have developed a vocabulary that fits their specific industry. Thus, standards like American National Standards Institute X.12 (ANSI X.12), EDIFACT, Odette or Tradanet, exist in various industries and geographies. Furthermore, most of the commonly used standards are routinely updated, forcing companies not only to regularly update their own EDI environments, but also to insist their trading partners do the same.

EDI also requires a user company to deploy a communications gateway, mailbox, and software for managing the exchange of business documents. Users need to use VANs, which are essentially proprietary e-mail systems that store and deliver EDI-formatted documents and function like electronic toll roads, charging per document or kilo-characters of data.. Users have to pay transaction charges to VAN providers to ensure transactions are routed to the right recipient and are secure during transport. The amounts can quickly add up and consequently, the technology remains an expensive proposition.. Indeed, EDI has a reputation for being expensive to set up and run. Suppliers’ network costs are driven up and they are forced to be proficient in various communications protocols. Aside from the upfront cost of the EDI infrastructure software, including , set-up fees and leased lines fees, companies choosing to go with a provider of VAN EDI networks, face additional costs in maintenance and transaction processing fees such as interconnect costs.

Microsoft Business Network Addresses EDI

Therefore, the advent of XML in the late 1990s created a great interest among companies that were not inclined to pay transaction charges to the VAN providers, especially if they could use a free or at least, inexpensive medium like the Internet to transport messages. To that end, Microsoft has recently unveiled the Microsoft Business Network (MBN) product, which was designed to help businesses more easily and effectively work with their trading partners (suppliers and customers) through a fully automated Microsoft .NET-connected solution. The solution increases efficiency with a deep degree of integration throughout their enterprise and desktop applications and lowering the total cost of business-to-business (B2B) collaboration.

In other words, MBN uses the messaging and collaboration facilities of Microsoft Outlook and the integration facilities of Microsoft BizTalk Server, to solve the supply chain connectivity part of the overall supply chain management (SCM) puzzle. The product facilitates inter-company collaboration through minimizing data capturing and paper-based processes. It uses several key software components, tools, and community-building services, which will eventually include connectivity options for trading partners of all sizes; a trustworthy Web services network; a library of business process templates; partner management tools; and support to help companies automate their network of trading partners. For more information, see Microsoft Business Network (MBN)—Coming of Age?

Microsoft’s intention with MBN has been to make the EDI process easier by removing at least one layer of the technical problem, so that its partners can then focus more on the business issues that customers really cares about. Accordingly, MBN will support generic EDI with XML standards, while it will also enable interoperability with other EDI standards and more traditional EDI data transports in future releases. MBN will support generic versions of ANSI X12-formatted documents such as the 810-invoice, 850-order request, and 856-ship notice. Additionally MBS is committed to providing maps that translate any company-specific EDI implementations into the generic format. The product will also provide VAN-like functionality for direct XML-to-XML data exchange. However, Microsoft notes it has been in talks to provide a connection to at least one high-profile proprietary VAN. Trading will involve additional customary charges such as per document or per kilo-character of text, in addition to the purchase and subscription costs for MBN.

Increasing Demands on EDI

Besides traditional VAN support, MBN will also eventually provide support for emerging EDI Internet Integration standards, such as Application Statement 1 (AS1) and Applicability Statement 2 (AS2), as to meet the increasing demand for Internet delivery of EDI services rather than over proprietary VANs. Namely, while VAN-based EDI traffic has by and large been flat lately, Internet EDI transactions have been growing at an annual rate of over 50 percent. Specifically, during the past few years, a number of EDI suppliers have breathed new life into this old workhorse technology by developing offerings that use the Internet as the communications medium, eliminating the need for multiple VANs, and driving the per-transaction cost down. Namely, an EDI standard, AS2 has been developed by the industry consortium Internet Engineering Task Force, and it enables secure EDI-formatted orders to be transmitted solely using the Internet, effectively opposing the need to use VAN services.

In addition, vendors have developed hosting services that reduce or eliminate customers’ need for in-house EDI resources. EDI complexities can be hidden behind a browser-based “thin” client interface, making EDI communications practical for many small companies that would not have considered it before. As a result, although XML is more flexible and easier to use than EDI, EDI protocols will run for years among major manufacturers or retailers that have heavily invested in it , and have the clout to demand their trading partners use EDI. As a matter of fact, EDI, XML, and any other format are merely “semantics” and input streams for expressing data. Whether a transaction is transmitted in EDI format or XML is largely second to the rapid growth of electronic document and data exchange. For more information, see EDI versus XML—Working in Tandem Rather Than Competing?

ACCPAC Exchange Offers Competition

Possibly the fiercest competition to MBN might come from ACCPAC Exchange. It is the first EDI offering to integrate mid-market accounting applications with IBM Business Exchange Services (recently acquired by GXS). It is aimed at delivering affordable EDI transaction documents over the Internet. ACCPAC Exchange was designed to enable small and mid-size businesses overcome the significant cost and infrastructure obstacles typically associated with traditional EDI VANs. The solution purportedly will relatively easily create inexpensive trading communities with suppliers and customers. Utilizing the Internet, the fairly new product supports established EDI (ANSI X12 and EDIFACT) and emerging “EDI over the Internet” (AS1 and AS2) standards.

ACCPAC Exchange also integrates with the ACCPAC Advantage Series and ACCPAC Pro Series accounting systems, and consists of software and services that should deliver affordable Internet-based EDI processing. Additional integration exists between ACCPAC Exchange ASN and the ACCPAC Warehouse Management System (WMS) module. Its components include a translator, mapper, and application integrator. It uses Cyclone Activator as its communication software, and IBM Business Exchange Services as the gateway for EDI communication. To that end, businesses can use the ACCPAC Exchange Transaction Manager to send and receive transactions to other businesses. These include purchase orders destined for a supplier-via an EDI data transfer service hosted at ACCPAC Online. IBM Business Exchange Services would then act as a central data transfer manager for EDI transactions, transmitting the data either exclusively through the Internet or, when required, by accessing traditional EDI networks. This flexible transaction delivery should insulate businesses from the complexities of dealing with multiple EDI networks, while enabling them to electronically trade with not only traditional EDI VANs, but also Internet-based trading communities.

Businesses can either use ACCPAC Exchange to adopt pure Internet-based EDI right away, or, as the market evolves, to gradually adopt Internet-based EDI while benefiting from a lower cost alternative to the traditional EDI fees they may already be paying. The system’s connectivity with traditional EDI networks should ensure a smooth transition, while integration with the ACCPAC accounting solution should provide for rapid implementation and increased operating efficiencies.

What Are Automotive Leaders Doing?

The global automotive industry is becoming leaner, faster, and less forgiving than ever before. Product life cycles are shorter, customer requirements are stricter, business is dramatically more international, and profits are increasingly harder to squeeze out of any enterprise’s day-to-day business operations. Infor Global Solutions Discrete Group focuses on providing deep vertical expertise to the automotive and discrete manufacturing markets.

Infor, formerly called Agilisys, has had over a dozen acquisitions over the last few years, including Lilly Software, and Mercia Software. Its most recent acquisition is MAPICS, which has yet to be finalized. With all of these acquisitions, this active enterprise applications provider has pledged to pursue an “assembler” vendor strategy rather than a “consolidator” strategy. Consolidators provide solutions to disparate customer bases with minimal or no integration between acquired assets. Acquisitions are driven by the desire for a larger scale or a specific, improved financial model and set of metrics. The assembler vendor strategy, however, is driven by specific vertical requirements and a solution model. Acquisitions are driven by the strategy of providing enterprise solutions with “best-of-both-worlds” functionality and domain experience.

Ultimately, the winner in the market will have to provide industry-specific solutions that solve essential problems that others cannot. This includes deep domain experience coupled with industry-specific product functionality to insure successful implementations; an integrated suite of industry-specific products that satisfy current customer requirements; and an enhanced roadmap for customers’ potential long-term needs. For more information, see If Software Is a Commodity— Can You Still Win Some Competitive Advantage?).

Infor Automotive Essentials

The Infor Automotive Essentials product suite has been developed specifically to benefit manufacturers in the automotive industry. Today, seventeen of the top twenty-five automotive suppliers worldwide apparently use parts of solutions found in Infor Automotive Essentials. The automotive discrete industry is an example of Infor’s strategy to combine “best of breed” components into a “super breed” suite.

While recently acquired products like Lilly VISUAL Enterprise are yet to be properly digested and positioned, most of the current automotive suite has come from Infor’s earlier successful acquisitions of Future Three and BRAIN AG. Both have long been focused on Web-based software capabilities and domain expertise in automotive supply chain communication and execution, as opposed to traditional enterprise resource planning (ERP) systems in various industries.

The automotive industry has unique characteristics that make it highly conducive to Internet-based supply chain optimization and collaboration. For example, a car’s or an engine’s bill of materials (BOM) lists many intricacies and entities for building that product. The result is a maze of automotive needs, and manually checking and tracking every detail is a Sisyphus task. To make things manageable, information transparency and supply chain integration are the name of the game, and its e-business technology that enables them. Both BRAIN and Future Three had long helped automotive companies, their suppliers and original equipment manufacturers (OEM) cut through the seemingly endless lists of manufactured parts. They had offered (and sometimes had competing) suites of automotive-focused supply chain communication applications that integrate into multiple ERP systems.

Nowadays the platform agnosticism of Infor stems from the need for stronger market competitiveness and from its customer base’s homogenous back-office population. While many existing customers may run on one of BRAIN’s ERP solutions (such as Xpert Manufacturing System, which runs on IBM’s iServer or TRANS4M, which runs on UNIX and Microsoft Windows server platforms), many others likely have legacy systems or systems from other vendors that will not likely be replaced any time soon. For more information, see How Much Wisdom Will BRAIN Bring to Agilisys? and Examples of How Some Mid-Market Vendors Might Remain Within the Future Three (Dozen)?

Thus, the BRAIN North America subsidiary developed its e-Automotive Suite of B2B communication and collaboration applications. The suite also included SupplyWEB Enterprise, a Web-based system for communicating procurement, shipment, payment, supplier performance, and many other types of information, catering to almost every type of communication an automotive company has with its suppliers. With the SupplyWEB version 6.0, BRAIN expanded the Internet-based product’s appeal by merging European and US/Canadian functionality to better support manufacturers with plants on both sides of the Atlantic. The enhancements of SupplyWEB 6.5 furthered and included functionality in key areas such as e-kanban, and added visibility in supplier managed inventories (SMI) and additional application programming interfaces (API).

Consequently, nowadays the Infor SupplyWEB solution also ensures that the user’s enterprises suppliers are providing the right materials on time and in a cost-effective manner. It attempts to optimize the entire supply chain and provide more potential for supply chain control and cost savings. The solution gives users near real-time oversight of multiple replenishment methods, such as the SMI, electronic kanban, material releasing, and purchase orders. The solution also incorporates supplier evaluations and shipment tools like bar coding and shipment notification. Both EDI and Internet-based supply chain communications tools are incorporated, automating processes via Web-based communications for suppliers that are not EDI-capable. The idea is that all suppliers share information from the user enterprise’s planning and execution functions almost in real time. The open-platform product gives users access to their supply chains from virtually anywhere in the world and is used today by over 20,000 automotive suppliers.

Infor’s Automotive SupplyWEB solution thereby aims to help user enterprises to reduce inventories, minimize premium freight costs, reduce administrative costs, and enable lean manufacturing throughout their enterprises. It also works within the users’ supplier management criteria to track supplier performance, project future performance, and alert everyone to out-of-bounds behavior. The nature of the global automotive supply chain means that the suppliers must be tightly integrated into the trading partner’s enterprise, whose supply chain communications and management capabilities need to be able to manage that critical relationship.

Most recently, on February 21, Infor announced the latest release of Infor SupplyWEB 9.0, with features such as

• Partner participation within the supply chain to view, collaborate, and share key value-added information; use exception-based alerting for key or unexpected events; and track supplier metrics and performance.
  
  
• Support the overall operational improvements of companies by helping reduce inventory, premium shipments, inventory stock-outs, quality defects, and EDI communication costs. At the same time it drives facilities to “lean” processes and pull-based replenishment strategies.
  
  
• Accommodation for fourteen differeent languages, standard times zones, user preferences, and other global variables.

Because Infor SupplyWEB is modular, it tends to improve system scalability, flexibility, and performance. It also facilitates faster development cycles, and offers a reasonably quick response to the customer’s changing requirements. The product uses a three-tiered framework for user interface (UI), application service, and database management. By separating these layers, code modifications are more controlled and can typically be completed in shorter time frames, and overall solutions become more flexible to implement. Infor SupplyWEB is a thin-client application accessible through a standard browser. It is available in a hosted or enterprise environment.

As for its ERP systems, in 2004, Infor announced the launch of a new product designed specifically to meet the distinct needs of the automotive supplier community: Infor TRANS4M 8.20. This is a comprehensive solution for manufacturing performance optimization that enables lean manufacturing in highly-repetitive environments. Namely, while Xpert is better suited to mixed-mode manufacturing requirements, TRANS4M should appeal to manufacturers with a lean/repetitive production environment. It has work-in-progress (WIP) visibility, pay-point operations, multiple backflush methods, and other automotive industry endemic functionality.

The latest release features a new tool for serialized container and lot management, which incorporates scanning and first in-, first out-based (FIFO) consumption to enable tracking and to control serial numbers and lots from supplier to customer. TRANS4M 8.20 also has enhancements for Sarbanes-Oxley requirements, as well as more than forty customer-driven requests and twenty new trading partners. Another key feature of Infor TRANS4M 8.20 is the inclusion of an enhanced version of SupplyWEB, which enables suppliers to collaborate and share value-added information and use alerting for events and supplier performance. Users should thus benefit from inventory and premium shipment cost reductions. They should be able to reduce stock-outs, quality defects, and EDI costs, while gaining business process enhancements with their supply base.

From BRAIN

Other global, multilingual ERP independent solutions coming from pre-acquisition BRAIN include ACmanager, an automotive customer manager portal application; and AutoEx (formerly BRAIN-eX), a transmission control protocol /Internet protocol (TCP/IP) message broker. AutoEx handles the complexities of the two-way communication needs of automotive suppliers and manages the mandates of the OEMs. The module is a TCP/IP-based message server that works with most back-end systems and replaces Bi-sync communications and value-added networks (VAN). It is also Automotive Network Exchange (ANX) compatible, but not ANX dependent, and it moves and routes data to anyone, anywhere, independent of file-type. AutoEx is specifically configured to deal with renowned demanding trading partners including names like DaimlerChrysler, Delphi, EDS, Ford, General Motors (GM), GXS (GEIS), IBM (Advantis), Sterling Commerce. Communication can be accomplished via the many available protocols such as E-5, hypertext transfer protocol (HTTP), HTTPS (secure HTTP), file text protocol (FTP) which are based on trading partner requirements.

From Future Three

On its hand, Future Three had delivered many elements of supply chain execution (SCE), event and exception management (EEM), and collaboration applications and services. It facilitated interconnected supply chains for automotive, heavy truck, agricultural equipment, and vehicle manufacturing enterprises. Within many diverse ERP communities, one will often find Future Three software embedded as a release accounting system, which the vendor had long mastered. All the products are available through a flexible deployment model, either as an enterprise-based system within the customer’s facility or in an application service providers (ASP) model hosted and maintained by Infor.

Future Three solutions included both buy-side and sell-side applications offering integrated order management and fulfillment; event management and workflow; collaboration; decision-support and visibility. To that end, former Eclipz is a supply chain management (SCM) solution that enables automotive suppliers to extend and manage the flow of information with their suppliers. It was designed around the proprietary CAR Model (standing for “Connect-Analyze-Respond”), and connected thousands of automotive suppliers to manage the flow of mission-critical demand and transactional information. The product supports a variety of ways for customers to connect with their suppliers, including Internet, virtual private network (VPN), VAN, ANX, and even phone and fax. To aggregate all these multichannel connection methods into a single point of broadcast and to receive information, the system features a strong transaction gateway that can accept and translate many different signal types like X.12, XML, and comma separated values (CSV).

In addition, Eclipz provided tools to help customers manage their supply chains more effectively through event management console (EMC), featuring collaboration, decision-support, and supplier metrics. Furthermore, AutoRelease is an integrated EDI, release accounting, shipping control, and invoicing system that supports over 200 trading partners with the latest EDI transactions sets as mandated by the powerful tier one automotive customers. Seamless integration between demand management processes and ERP applications is provided through the configurable interface. Finally, the AutoScan module, working in conjunction with AutoRelease, provides a barcode scanning, printing, and designing application for customers who can create or verify information on-line for accurate shipping documents and ASNs.

Infor AutoRelease 12.1

At the end of 2004, Infor announced the release of Infor AutoRelease 12.1, with expanded functionality in essential areas for ERP and SCM. Like its siblings, Infor AutoRelease has become part of the Infor Automotive Essentials suite of products developed specifically for the automotive industry. The release of Infor AutoRelease 12.1 aligns with Infor’s overall product strategy of expanding product functionality and adaptive agility while continuing to support a wide range of ERP software platforms. Version 12.1 builds upon the IBM OS/400 V5R1 upgrade. It is capable of expanding the library list from 25 libraries to 250 libraries by providing the necessary enhancements to implement this new degree of functionality. The expanded library list will be delivered through electronic support system (ESS) updates. Further, by integrating Adobe Central Pro v 5.5 as the output server, Infor is laying the groundwork for future trading partner requirements. This should enable Infor AutoRelease 12.1 to adapt quickly to implementing the frequent changes in trading partner requirements and to provide even greater value to its customers.

For years many vendors have long preached the advantages of automating demand management and fulfillment through release accounting. However, the culture and complex technology have been major hurdles in promoting EDI and efficient demand management into the lower-tier automotive supply chains. EDI transactions, like the 830-planning/release schedule transaction, have been used to tell suppliers what to produce and when to produce it. Moreover, success beyond tier one automotive manufacturers had long been plagued with the lack of visibility and timeliness of forecasts and customer inventory levels.

However, the pressures on automotive suppliers to streamline manufacturing operations to reduce inventory and costs and to increase the speed of production, has increased during the current economic slump, and these are common issues for Infor users too. With Infor SupplyWEB suppliers can log-on, via the web, to access the suppliers’ latest inventory levels, allowing for SMI. They can view releases and purchase orders; view and respond to quality and delivery performance issues like delivery performance reviews (DPR) and production parts approval process (PPAP); view overall supplier ratings; enter invoice detail; and view payment information.

A resurgent interest in release accounting has also emerged in the automotive suppliers’ world, since they have begun to be quite careful about their more influential trading partners and consortium’s needs. To that end, Infor offers products to manage supplier relations, procurement, performance, and keep manufacturers compliant with automotive industry requirements. Many smaller automotive suppliers have reportedly felt stuck with the traditional methods of using just EDI, which is demanded by their OEMs. Issues like

• “Does the system support my trading partners (e.g., GM, Honda, DCXnet [DaimlerChrysler exchange], etc.)?";
  
  
• “If yes, does it have fully integrated EDI, barcodes, payment processing, and other customer mandates?”; and
  
  
• “Is it specifically designed to the dictated standards of each of my trading partners?”

have shown up on the radar screen time and again.

Having garnered the astute product suite and install base, including the top one market share in the German discrete ERP mid-market, and having over 70 percent of tier one and two auto suppliers as customers, Infor Automotive should give a pause to the automotive-focused archrivals like QAD (with its eQ and MFGx.net supply visualization collaborative offerings, and flagship product, MFG/PRO eB ERP); SAP; Glovia; and TradeBeam (which recently acquired former SupplySolution and its i-Supply equivalent product).

The Gain of Integrated EDI

Electronic data interchange (EDI) has earned the reputation of a complex, rigid, and expensive means of document and data exchange among trading partners. However, transportation, finance, insurance and other industries have heavily leveraged EDI and proprietary communications to conduct business. Also, major manufacturers, such as automotive original equipment manufacturers (OEM) and consumer product goods (CPG) companies have embraced EDI and mandated that their suppliers do the same.

Consequently, many small and medium companies are under pressure to deploy the same EDI system as a major customer, and are making it a basic cost of doing business with the market leaders. An example of this widespread trend of larger companies giving ultimatums of “my way, or highway” is Owens Corning. It has mandated that several hundred of its suppliers implement Internet EDI or face a $50 (USD) charge for each paper invoice submitted. Other large corporations, such as Wal-Mart, Home Depot, Target, etc. in finding Internet-based EDI to be productive and cost-effective, have mandated it to their suppliers.

The EDI-XML Debate

For some enterprises, there are still barriers to using EDI, or at least some compelling reasons for them to embrace extensible markup language (XML) to exchange vital documents such as purchase orders, delivery notices, and invoices instead. In theory, XML shows many advantages, since unlike EDI, it was specifically designed to transfer data on the Internet. Also, while organizations in an EDI network have to set up direct, “point-to-point” connections between each participating system, XML's “extensibility” supposedly means that participating companies using an agreed upon data format for transactions can freely exchange data. In short, XML has initially not only promised to ease the technical pain of integrating the flow of data between systems, applications, and people, but it can reduce cost through faster transactions throughput, improved trading partners’ data quality, the elimination of manual processes, and so forth.

Nevertheless, while at the surface there are few economic or strategic reasons for organizations to persist with EDI, many seem reluctant to adopt XML. In fact, there is only negligible growth in the number of organizations replacing their EDI-based systems with XML. The key reason being that the percentage of organizations using XML has not yet reached the "critical mass" of double digits in the of overall business-to-business (B2B) data flow. However, the number of large and medium organizations using EDI is estimated between 250,000 and 350,000 worldwide.

Additionally, XML is not without its challenges. For one, XML standards are still relatively immature and unstable, lacking a lot of development and industry expertise behind them. Consequently, it is curious that the perceived value and adoption of XML is higher within the hi-tech, chemical, and retail and consumer sectors where there are mature industry initiatives and standards like RosettaNet, CIDX, UCCNet, AS2. Moreover, XML has a larger footprint than EDI, which means it requires more bandwidth. For companies that handle large volumes of transactions a day, that extra bandwidth can quickly become quite expensive.

For the time being, businesses that have invested significant resources in EDI use it for B2B communications, and many see EDI as the best choice for secure, reliable transactions because it is a mature, standardized, and trusted medium. The leading EDI standards, such as the X12 and EDIFACT, continue to meet the ever-evolving needs of more than a dozen industries. Contrast this to the ongoing evolution of the myriad of industry-specific extensions (dialects) to the XML standard—many of which are non-interoperable and still work-in-progress. Inevitably, XML traffic will exceed EDI X12 protocol traffic, but it will not necessarily be a replacement. While X12 is still the dominant format for things like purchase orders and invoices, X12 documents are not widely used for newer things like collaborative forecasting and planning. Because of this absence, users may be motivated to exchange these data in XML.

What has emerged instead is a type of XML–EDI hybrid, leveraging the benefits of both interchange systems and satisfying the demands of large and small companies in a trading network. Many customers want to leverage XML with their existing EDI systems, making interaction between the two technologies seamless. This relies on enterprise application integration (EAI) platforms from the likes of Sterling Commerce and GXS. Additionally, it is only logical that these EDI value-added networks (VAN) and other providers of service integration will reinvigorate their business value proposition by adding applications to their “plumbing” portfolios and offer more of an application-like, vertical solutions approach to meet the integration requirements of the trading community. To that end, the Sterling Integrator product supports EDI and XML natively, allowing users to maintain their investment in EDI while progressing to key XML-based technologies.

Going a Step Further?

Still, this readable data is only partly good for enterprise resource planning (ERP) and back-office systems, since the real action is in merging data with information already being processed within the ERP system. The challenge is to make sense of the constant flood of information arriving daily as EDI messages. In high volume environments, this can consist of hundreds of records affecting the releases and forecasts of hundreds of parts. It is infeasible to manually re-enter this data. Therefore an additional interface must be developed and tested. Yet, unlike an interface that updates and synchronizes inventory levels or product quality information (if one is talking about interfacing ERP systems with WMS or quality management systems), the EDI interface typically involves the extensive use of business rules and logic. These are established between every customer and supplier rather than to only statically mapped data. That is to say, the highly personal nature of the data means that no two interfaces are exactly alike, thus further complicates matters.

Ultimately, these imply an extensive use of resources on both sides of the table. The enterprise software vendor supplying the interface must write and test custom code, and the user (such as an automotive supplier or customer) must test and re-test thoroughly until the interface is working consistently. However, with an intrinsic EDI system within the ERP product, third party software costs are virtually non-existent. Moreover, the time it takes to build the custom interface is drastically reduced, since the interface work is built from within the ERP system and the knowledge of data structures and business logic is inherent.

To that end, Microsoft will provide built-in support for various EDI standards and data transports. In addition to working with Inovis, it will develop EDI and other areas of connectivity extension and enhancement with the help of Covast and vSync. Covast’s EDI Accelerator for BizTalk automatically renders an XML representation of the EDI format and vSync markets EDI for MBS Great Plains. It allows users to send and receive EDI documents from within the ERP package’s Sales Order and Purchase Order modules.

However, over the last ten years, another MBS’ EDI partner, eBridge, has also established partnerships with many other leading mid-market ERP and accounting software vendors, such as ACCPAC, Best Software, Epicor Software, Exact Software, Intuit, Open Systems, and Softline, which together with ACCPAC, was recently acquired by Sage Group, the parent of Microsoft Business Solutions’ (MBS) archrival Best Software (see Will Sage Group Cement Its SME Leadership with ACCPAC and Softline Acquisitions?). eBridge provides tools that allow mid-market ERP and accounting packages to accommodate bi-directional data exchanges within an EDI (ANSI X12 and EDIFACT for international deployments) or XML framework. Products include the flagship eBridge EDI, Mapper (for reformatting e-business documents), ASN, CRM Integration, and the eBridge Software Development Kit. Epicor also partnered with ACOM, whose EZConnect engine also allows trading partners to exchange documents in compliance with EDI, XML, and other structured data formats.

IQMS Offers Integrated EDI

It is amazing that the small ERP vendor IQMS has a native IQ EDI module that supports ANSI X12, EDIFACT, and Odette file formats. Given the importance of emerging technologies, IQ EDI is also XML-enabled and supports FTP transmission and receipt of files. The system generates and processes virtually all commonly required transaction sets. For inbound transactions, it supports remittance advice (820); planning/release schedule (830); purchase orders (850); change orders (860); shipping schedule (862); order status report (870); receiving advice (861); functional acknowledgement (997); cash application (824); and text message (864) when it comes to X12 format, and DELFOR (a delivery schedule message from a buyer to a supplier about product requirements) and DELJIT (delivery just-in-time message which relays the precise delivery sequence of a JIT schedule) EDIFACT transactions. On the outbound transactions side, it supports invoicing (810); planning/release schedule (830); shipments (ASN) (856); order acknowledgement (855); vendor shipping schedule (865); and functional acknowledgement (997) for X12 and DESADV (dispatch advice message) for EDIFACT—a message specifying details for goods dispatched or ready for dispatch under agreed conditions.

Further, due to the inherent integration with the rest of the vendor’s EnterpriseIQ ERP suite, outbound transactions are sent directly from the system. It also includes template-mapping tools and eliminates the need for third-party translators, which are a default for a vast majority of ERP systems that require third-party EDI solutions. When it comes to industry savvy, the system is based on the Automotive Industry Action Group (AIAG) supply chain business practices and a number of flexibility business rules generate exceptions. For example, it can flag and report dramatic quantity changes in EDI transactions or identify the maximum increase or decrease allowed based on a selected day range and allowed percentage change (user defined limits). Logically, orders complying with the rules are passed through to the sales module, while the orders that do not comply are flagged.

Finally, the rules can be set up either for each EDI transaction code number or each customer. IQ EDI is an integrated component within EntepriseEQ, supporting the capability to translate files that are downloaded directly from a web site or through the traditional EDI mailbox setup with a VAN provider. However one should note that IQMS does not provide communication nor maintains the mailbox, and requires a third-party communications system (i.e., VAN) to perform this service.

EnterpriseIQ also offers a number of useful utilities, such as the IQAlert notification system, with many nifty business activity monitoring (BAM) features (see Business Activity Monitoring— Watching the Store for You). For example, the appropriate persons are alerted about low inventory levels, missed shipments, late or pending purchase order receipts or other burning issues. It can also schedule unsupervised tasks like running a material requirements planning (MRP) engine, EDI processing, or creating database backups late at night.

User Recommendations

Small and medium, discrete repetitive manufacturing and distribution businesses with demand-driven supply chain management concerns, unsophisticated B2B integration practices, and a need to flexibly connect with trading partners should evaluate the functionality of these products and how value can be added to existing applications.

As usual, users should employ a critical approach when evaluating products, and require company representatives to demonstrate specific technological and germane functional capabilities. Compliance with the common industry standards such as Ford MS-9000, AIAG, Manufacturing Assembly Pilot (MAP), or International Automotive Sector Group (IASG) QS-9000 should be probed. Whether the system supports the practices and dictated standards by the “big-brother” trading partners (such as GM, Ford, Honda, etc.) should also be determined.

Lower tier automotive suppliers in need of a plant-focused ERP system and the need to quickly and affordably get on their e-business feet will likely benefit from evaluating IQMS, Infor Automotive, and similar products. Additionally, the likes of Infor Automotive should be evaluated to raise the bar for other vendors when demonstrating their EDI, ANX, release accounting, just-in-sequence (JIS), repetitive purchasing, integrated barcode printing, lean manufacturing, and other e-business processes pertinent to the automotive industry. Sharp industry focus and domain expertise, product interconnectivity, and quick and inexpensive e-commerce enablement have been the bargaining chips of IQMS, QAD, and Infor’s in the game against its peers.

Companies that are dependent on EDI for transaction routing should look hard at these products as a pathway into the XML century. What should be most important is how smoothly the translation service can be integrated with other systems. Therefore, size and technical strength are not as important as is users’ experience with the same systems.

Given that XML and EDI will be used concurrently for some time in the future, companies should think carefully about how to leverage the mix to minimize the risk of both systems doing the same work. To that end, one should thoroughly consider the number of transactions the company will transmit on a daily basis, and whether that transaction volume will change over time. Further, every interested enterprise should ascertain whether it has the staffing available to commit certain full-time resources to EDI or XML. Additionally, while the solution’s compatibility with the current operating environment is mission critical, the number of trading partners is also crucial. Any EDI/XML solution should be checked to see if it has ever worked with any trading partners. The price structure for adding a new trading partner must also be considered.

Prospective customers should ask all competing vendors to produce the total cost of ownership (TCO) and return on investment (ROI) rationale for a particular deployment. Customers should clarify whether they are purchasing all of the software they need to meet their EDI/XML requirements now, and what the costs for implementation, training, support, and upgrades will be now and in the future. For example, will trading partner updates be readily available for download, or must the customer wait for EDI/XML maps to be changed?