Online purchasing is a piece of cake as long as you only have to worry about linking up with one supplier or one customer.
However, as many organizations are discovering, when you try to expand online links to include multiple partners, electronic commerce can quickly turn into a virtual Tower of Babel, a monument to the inability of everyone in a given supply chain to speak the same language.
A computer manufacturer and distributor, for example, might be able to agree on what products should be included in an electronic catalog, how memory chips or monitors should be described, or how products or parts should be exchanged.
But if you want to tie more customers or more suppliers into that same process, prepare to start from scratch each time. That's because it's likely that each company defines computer memory slightly differently. Each may use a different part numbering process. The companies may even use different-size boxes for the same size of computer screens, which makes warehouse planning a logistical headache. It's an expensive, frustrating and labor-intensive process that cuts short the supposed cost savings of business-to-business e-commerce.
Now a group of IT vendors is attempting to pull down that Tower of Babel. Vendors representing various links in the IT supply chain, including Ingram Micro Inc., Cisco Systems Inc., Compaq Computer Corp., Hewlett-Packard Co. and IBM, earlier this year formed a grass-roots computer industry organization called RosettaNet, which bills itself as the group that will create the "lingua franca" of high tech -- the key to making sure that everyone is speaking the same e-commerce language.
But some vendors haven't signed on yet. Dell Computer Corp. and Gateway Inc., for example, aren't participating. Still, if it's successful, RosettaNet could serve as an example for other industries attempting to jump-start business-to-business e-commerce. It could also make it easier for corporate IT buyers to get up-to-the-minute product information from their resellers.
RosettaNet is being spearheaded by Ingram Micro, a $20 billion Santa Ana, Calif., hardware and software distributor. Before starting RosettaNet, the company embarked on a project designed to tie its supply chain partners directly into its own computer systems.
Ingram started working on this project with 3Com Corp. After each company spent $600,000 to hammer out common product definitions and link to a common catalog, they thought they had a model for the e-commerce age: smooth, efficient and an obvious dollar saver for both companies. But when Ingram tried to tie the extranet to another company, it had a problem: It was going to have to do it all over again because the second customer had a completely different way of defining computer products.
"We realized that there was no way we could afford to keep doing these 'one-offs,'" said Fadi Chehade, the director of that project and now the CEO of RosettaNet, based in Santa Ana.
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RosettaNet managing board
- ABB Process Technology
- American Express
- CHS Promark Electronics
- Cisco Systems
- Compaq
- CompUSA
- Computacenter
- Computer 2000
- Deutsche Financial Services
- EDS
- Federal Express
- GE Information Services
- GSA
- Hewlett-Packard
- IBM
- Ingram Micro
- Insight
- Intel
- Microsoft
- MicroAge/ECAdvantage
- Netscape
- Oracle
- PC Order
- SAP AG
- Tech Data
- Tech Pacific Holdings
- Toshiba
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Within two years, RosettaNet developers hope to define everything in the computer industry's supply chain -- from the technical specifications of the components in a laptop computer to spare parts and the size of the boxes in which products are shipped.
Unlike other groups, such as the Open Business on the Internet Consortium, RosettaNet is not trying to define transactions. Rather, it is trying to define the language used in those transactions. Pieces of the group's work, including product catalog definitions, will be available on the www.rosettanet.org site in the fall.
For corporate IT buyers, the RosettaNet definitions could open the door to widespread automated purchasing. Instead of building a different online catalog system with different definitions for every supplier, a company will be able to maintain a single online purchasing system. All of the vendors it is buying from will be using the same product definitions and agreed-upon business practices. That's good news for IT administrators looking to save money by buying online.
"I think the degree to which the industry can make electronic commerce plug and play and easy to work with is going to make business through electronic commerce channels for us a winner," said John Anthony, director of IT at Seattle City Light. "Standardization across vendors makes it easier for us to make meaningful comparisons. You can find the vendors who give you the products you need and at the most competitive price."
RosettaNet could also serve as an example for other industries attempting online purchasing and e-commerce. So far, however, the relatively young computer industry has lagged behind other markets in the creation of common definitions for, among other things, products and shipping.
The grocery industry, for example, has the Uniform Commercial Code, which tells bar scanners if a product is a can of soup or a box of cereal. The automotive industry has created the Automotive Network Exchange, which is trying to take existing EDI (electronic data interchange) formats into the Internet age. And many other industries, such as medical suppliers, have created their own EDI forms for sharing order information.
The computer industry, beset by intense competition among vendors that believe their supply chains can be a competitive advantage, has had no such cooperation. But with RosettaNet, Chehade and Linda York, vice president of operations, hope the industry can leapfrog other markets by effectively combining e-commerce components that have so far been difficult to put together: back-end procurement applications, Web-centric electronic catalogs and Extensible Markup Language tags used to define the products themselves.
Chehade and York started a cross-country barnstorming tour last year to convince the rest of the industry that something was needed: that leveling the playing field wouldn't mean losing a competitive advantage.
Many didn't need much convincing. Hardware vendors, such as Houston-based Compaq, saw an easier and cheaper way to get their products to distributors and, ultimately, to users.
E-commerce application vendors also have gotten on board. SAP AG is interested in having its procurement applications support RosettaNet's processes . IBM, of Armonk, N.Y., has said its Net.Commerce servers should be able to support the product definitions in merchant catalogs. In all, more than 30 companies and organizations, such as ANSI, which manages the ASC X12 EDI standard, and CommerceNet, a professional consortium of e-commerce companies, signed on.
Even executives at Cisco, which already had a thriving Web site, liked the idea of standard product definitions.
"It would be nice to have a standard so the architecture of our Web site does not have to be redone every time we have a new partner," said Chase Bailey, principal technologist at Cisco, in San Jose, Calif. "The cost savings would be enormous if people implemented standards."
So far, four RosettaNet projects have been completed: Catalog Information, which defines the data fields for general product information; Software Technical Specification, which defines the technical attributes of software and licensing agreements; the Memory Technical Specification, which defines memory products and their technical attributes; and the Laptop Specification, which defines the attributes of a laptop.
There's still a long way to go, however. About a dozen other RosettaNet projects are scheduled to be finished by the end of the year.
Convincing competitors to agree upon specifications has proved to be the most difficult task. Some high-profile vendors are noticeably absent from RosettaNet. Dell and Gateway already have thriving e-commerce sites and are not working on the project. York said the PC makers, however, have not rebuffed RosettaNet's concept and still could be involved by the end of the year.
The entire RosettaNet project is expected to be handed over to an established standards body, such as CommerceNet, by the middle of 2000, where definitions for new technologies can be added as needed.
Still, Dave Baltaxe, an analyst at Current Analysis Inc., in Sterling, Va., is impressed by the industry heavyweights that have thrown their support behind RosettaNet.
"There's a lot of momentum behind these kinds of groups right now, particularly behind RosettaNet," Baltaxe said. "I really think they are going to be able to pull it off."
It's going to take time, however. But then, learning a new language always does.
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RosettaNet projects (a sampling)
Content projects:
- Catalog - Product information, categories and part numbers
- Marketing - Product sales description, features and benefits
- Technical Specifications - Components of a product
- Product Distribution - Packaging specifications, size and weight
Supply chain reporting & rules:
- Sales Out, Sales In Format - Defines and records sales activity across a supply chain
- Forecasting Information - Specifies the content for supply chain forecasting applications
- Price Protection - Defines the rules and flows of price protection programs
- Promotion Rules - Defines guidelines for promotions to be accessed by an online catalog
Commodity processes:
- Manufacturer Authorization - Mechanism for manufacturers to record open access to catalogs
- Return Merchandise Authorization & Flow - Defines content and flow of RMA forms
- Credit Interface & Flow - Defines content and flow of credit forms
Project framework:
- Interchange Format - Adopts a single format for the exchange of data through XML
- Standards Notation - A system for noting completed standards within RosettaNet
- Content Transportation Mechanism - Recommends a way to transport content
Open querying & real-time search:
- Shipment Tracking Interface - Enables a user to track shipments across different suppliers
- Price Check Interface - Allows users to check on prices across different interfaces
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Group of IT vendors forging supply chain language
