Danish Model Combines International Standard and a Legislative Initiative

Denmark Leads the Way With Electronic Billing

Denmark Leads the Way With Electronic Billing
Published in Børsen, August 23, 2005
By Jon Bosak, Sun Microsystems

Abstract

Denmark has the potential to be an international locomotive in the adoption of electronic ordering and billing between the public sector and the private sector. The Danish initiative is on the right track with its foundation in an international standard like Universal Business Language, whose purpose is to bridge the gap between sector specific electronic business languages. The unique facet of the "Danish model" is the combination of a deliberate choice of an international standard and a legislative initiative. That a whole public sector by law is required to receive electronic invoices in a standardized format ensures that a critical mass of customers will ask suppliers of ERP-systems to implement the standard. Future initiatives will hopefully ensure the adoption of electronic billing in the private sector as well as the public sector.

A Universal Business Language

The Universal Business Language (UBL) initiative that I initiated four years ago is not an attempt to reinvent existing electronic business messages. The main purpose of UBL is to develop a free global standard that can bridge existing sector specific eBusiness standards. Another important purpose is to provide a limited set of eBusiness messages that can easily be implemented in existing off-the-shelf business software and ERP-systems. Manual registration and re-keying of invoices is a considerable and unnecessary cost in the public sector as well as in the private sector. UBL lowers the barriers to small and medium sized enterprises (SMEs). The potential for rationalization is enormous in both sectors.

The biggest companies have for many years been able to exchange electronic business documents based on EDIFACT, a standard for electronic documents created by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). Some of these interfaces have since been replaced by XML-based sector specific standards. The challenge to the smaller companies has been that EDIFACT-based exchange of business documents has been expensive to establish. Small companies and large companies alike can both harvest the potential in doing electronic business with a "universal" common denominator standard like UBL.

The UBL philosophy is based on the "80/20 rule"; its goal is to identify and standardize the 20 percent of the possible data elements that will satisfy 80 percent of the usage scenarios. Other eBusiness standards that have been developed in specific sectors are typically trying to cover most of the known requirements in that sector. This approach makes it costly to support all the aspects of a standard by ERP-suppliers. They may have to support a feature that is only needed by a fraction of the users. UBL is an extensible language, where sectors can customize (change) UBL following strict rules ensuring that basic data can still be read by the vendors that do not understand the sector specific extensions. This means that an invoice localized regionally, nationally, or even in a particular sector (for example, a European version, a Danish version, or a utility sector version) can still be exchanged with customers in other parts of the world.

By harmonizing terminology and semantics of different data elements, and by translating the documentation of the elements into different languages, it becomes feasible to exchange business documents on an international level. UBL's data dictionary has been translated from English to Spanish, Korean, Simplified Chinese, Traditional Chinese, and Japanese. UBL is an international effort, and this is well illustrated by the meeting culture of UBL. The UBL Technical Committee meets three times a week in phone conferences scheduled to ensure round-the-clock collaboration among members in Europe, Asia, and the Americas. Face-to-face meetings are held four times a year in various parts of the world, the last three having been hosted by the Danish Bankers Association in Copenhagen, the Logistics Management Institute in Washington, and the Chinese National Institute of Standardisation in Hangzhou.

We are Repeating the Success of XML and Have Created a 'Viral Technology'

The 80/20 approach that makes UBL easy to implement in standard systems is the same principle that has spread the usage of XML in the IT industry. XML was originally based on SGML, which has existed as an ISO standard since 1986. SGML provides a number of advanced features that are difficult to implement and were not widely used. Because SGML-based systems were difficult to construct, SGML was primarily used to structure technical documentation within the aircraft industry, the automobile industry, and the military industry.

XML arose from the need for a lightweight version of SGML that would incorporate the small set of features that everyone used and would omit the more advanced and less-used features that created most of the implementation work. Within a year — much sooner than the XML specification had completed the W3C development process — more than 200 companies had expressed interest in the standard, and XML had become a "viral technology" like HTML and HTTP. An extremely useful and now universally supported standard had been created simply by pruning the infrequently used facilities of SGML.

It seems right to ask how "old wine in new bottles" can have such great effect on an entire industry. The answer is that within the software industry you cannot skip stages of development. Experience with HTML, which many experts criticized for its limitations when first introduced, has shown us that it is not the best and most advanced standard that has the greatest penetration. The perfect is the enemy of the good. The standard which has the greatest penetration is the standard that has the best balance between functionality on the one hand and ease of learning and implementation on the other. XML struck exactly the right balance, and this same principle guides the development of UBL.

Summary

Europe may be the first region in the world to harvest the benefits of a standardized set of XML eBusiness messages. The Danish commitment to UBL and its leadership role in the deployment of standard electronic orders and invoices is a key enabler to this vision.

About the Article

Jon Bosak of Sun Microsystems, the "Father of XML" and chairman of the Universal Business Language technical committee at OASIS, acknowledges Denmark's initiative to introduce electronic billing between the private and the public sector. The standard, OIOXML electronic invoice, is based on the Universal Business Language, which is an international standard, bridging existing e-business standards. Jon Bosak organized the UBL technical committee four years ago, and the standard now seems to have a strong user base in Scandinavia. The Danish experiences and a lot of European coordination have now provided valuable input into the next version of the standard, thus ensuring that the next version of UBL will support broad European adoption.

References

Specification of OIOXML Electronic Invoice
OIOXML "Common public standard for name giving and design of XML based messages for use in data exchange between public authorities."
The Danish OIOXML Project
Danish e-Government Project: Infostructurebase
"Denmark Pioneers Adoption of UBL-based Standards." From eGovernment News (September 09, 2005). [Denmark — Interoperability/eProcurement.]
Danish XML Project: OIOXML Naming and Design Rules
Related paper: "Adoption of UBL in Denmark: Business Cases and Experiences." Presented at XTech 2005.
Source: Reference posted by Mikkel Hippe Brun, 2005-08-25. [source .DOC English, Danish version]

Prepared by Robin Cover for The XML Cover Pages archive. General references: "Universal Business Language (UBL)."

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The Danish initiative is on the right track with its foundation in an international standard like Universal Business Language, whose purpose is to bridge the gap between sector specific electronic business languages. The unique facet of the "Danish model" is the combination of a deliberate choice of an international standard and a legislative initiative. That a whole public sector by law is required to receive electronic invoices in a standardized format ensures that a critical mass of customers will ask suppliers of ERP-systems to implement the standard. Future initiatives will hopefully ensure the adoption of electronic billing in the private sector as well as the public sector. A Universal Business Language The Universal Business Language (UBL) initiative that I initiated four years ago is not an attempt to reinvent existing electronic business messages. The main purpose of UBL is to develop a free global standard that can bridge existing sector specific eBusiness standards. Another important purpose is to provide a limited set of eBusiness messages that can easily be implemented in existing off-the-shelf business software and ERP-systems. Manual registration and re-keying of invoices is a considerable and unnecessary cost in the public sector as well as in the private sector. UBL lowers the barriers to small and medium sized enterprises (SMEs). The potential for rationalization is enormous in both sectors. The biggest companies have for many years been able to exchange electronic business documents based on EDIFACT, a standard for electronic documents created by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). Some of these interfaces have since been replaced by XML-based sector specific standards. The challenge to the smaller companies has been that EDIFACT-based exchange of business documents has been expensive to establish. Small companies and large companies alike can both harvest the potential in doing electronic business with a "universal" common denominator standard like UBL. The UBL philosophy is based on the "80/20 rule"; its goal is to identify and standardize the 20 percent of the possible data elements that will satisfy 80 percent of the usage scenarios. Other eBusiness standards that have been developed in specific sectors are typically trying to cover most of the known requirements in that sector. This approach makes it costly to support all the aspects of a standard by ERP-suppliers. They may have to support a feature that is only needed by a fraction of the users. UBL is an extensible language, where sectors can customize (change) UBL following strict rules ensuring that basic data can still be read by the vendors that do not understand the sector specific extensions. This means that an invoice localized regionally, nationally, or even in a particular sector (for example, a European version, a Danish version, or a utility sector version) can still be exchanged with customers in other parts of the world. By harmonizing terminology and semantics of different data elements, and by translating the documentation of the elements into different languages, it becomes feasible to exchange business documents on an international level. UBL's data dictionary has been translated from English to Spanish, Korean, Simplified Chinese, Traditional Chinese, and Japanese. UBL is an international effort, and this is well illustrated by the meeting culture of UBL. The UBL Technical Committee meets three times a week in phone conferences scheduled to ensure round-the-clock collaboration among members in Europe, Asia, and the Americas. Face-to-face meetings are held four times a year in various parts of the world, the last three having been hosted by the Danish Bankers Association in Copenhagen, the Logistics Management Institute in Washington, and the Chinese National Institute of Standardisation in Hangzhou. We are Repeating the Success of XML and Have Created a 'Viral Technology' The 80/20 approach that makes UBL easy to implement in standard systems is the same principle that has spread the usage of XML in the IT industry. XML was originally based on SGML, which has existed as an ISO standard since 1986. SGML provides a number of advanced features that are difficult to implement and were not widely used. Because SGML-based systems were difficult to construct, SGML was primarily used to structure technical documentation within the aircraft industry, the automobile industry, and the military industry. XML arose from the need for a lightweight version of SGML that would incorporate the small set of features that everyone used and would omit the more advanced and less-used features that created most of the implementation work. Within a year — much sooner than the XML specification had completed the W3C development process — more than 200 companies had expressed interest in the standard, and XML had become a "viral technology" like HTML and HTTP. An extremely useful and now universally supported standard had been created simply by pruning the infrequently used facilities of SGML. It seems right to ask how "old wine in new bottles" can have such great effect on an entire industry. The answer is that within the software industry you cannot skip stages of development. Experience with HTML, which many experts criticized for its limitations when first introduced, has shown us that it is not the best and most advanced standard that has the greatest penetration. The perfect is the enemy of the good. The standard which has the greatest penetration is the standard that has the best balance between functionality on the one hand and ease of learning and implementation on the other. XML struck exactly the right balance, and this same principle guides the development of UBL. Summary Europe may be the first region in the world to harvest the benefits of a standardized set of XML eBusiness messages. The Danish commitment to UBL and its leadership role in the deployment of standard electronic orders and invoices is a key enabler to this vision. About the Article Jon Bosak of Sun Microsystems, the "Father of XML" and chairman of the Universal Business Language technical committee at OASIS, acknowledges Denmark's initiative to introduce electronic billing between the private and the public sector. The standard, OIOXML electronic invoice, is based on the Universal Business Language, which is an international standard, bridging existing e-business standards. Jon Bosak organized the UBL technical committee four years ago, and the standard now seems to have a strong user base in Scandinavia. The Danish experiences and a lot of European coordination have now provided valuable input into the next version of the standard, thus ensuring that the next version of UBL will support broad European adoption. References Specification of OIOXML Electronic Invoice OIOXML "Common public standard for name giving and design of XML based messages for use in data exchange between public authorities." The Danish OIOXML Project Danish e-Government Project: Infostructurebase "Denmark Pioneers Adoption of UBL-based Standards." From eGovernment News (September 09, 2005). [Denmark — Interoperability/eProcurement.] Danish XML Project: OIOXML Naming and Design Rules Related paper: "Adoption of UBL in Denmark: Business Cases and Experiences." Presented at XTech 2005. Source: Reference posted by Mikkel Hippe Brun, 2005-08-25. [source .DOC English, Danish version] Prepared by Robin Cover for The XML Cover Pages archive. General references: "Universal Business Language (UBL)."