SAP Discusses 5 Year Plan - Social Networking, EDI, Cloud Computing and More

SAP executives at their annual Influencer Summit in Boston on Tuesday laid out a broad outline of the company's five-year product and technology vision. They emphasized integrated business analytics, software packages, and on-demand, cloud-based extensions to applications, to enable customers to avoid difficult upgrades while tapping new capabilities.

For those involved in EDI and B2B integrations and data exchanges this is interesting information. It pulls back the veil on their investment into Crossgate, the cloud computing based EDI exchange, last year. SAP does not want EDI and B2B data communications to be a hindrance to solution roll-outs. They want an on-demand model that can simply be switched on.

EAIs (enterprise application integration) solutions grew out of the need to have a more "orderly" and standardized methodology for connecting multiple applications together and for sharing data across the enterprise's IT ecosystem. This exact same requirement is needed externally among large trading partner communities. They need a method for quickly sharing real-time business data across multi-member and extended supply chains. This is best achieved by using a centralized EDI/B2B exchange that manages the data formats of all participating members and creates a repository of partners and formats that can be switched on - in an on-demand model.

An on-demand, cloud computing model for EDI/B2B, removes the limitations of IT budgets, IT staffing, EDI expertise and EDI systems from the equation. It is a pay-as-you-need-it model. It abstracts the system from the business and makes it a simple choice to connect, not an IT project.

SAP users want to be able to use social networking sites such as Facebook to collaborate, said SAP executive board member Jim Hagemann Snabe. "Companies want to take advantage of these technologies without disrupting business," he said. Much of SAP's innovation focus will revolve around flexible extensions to core applications and processes, which can be developed and deployed quickly, via an on-demand or on-premise model, said Hegemann Snabe.

This is a very intriguing concept. The buzz word Enterprise 2.0 is often being used to describe social networking for businesses. I believe this is what Mr. Hegemann Snabe is describing. It is also the model that EDI and B2B Exchanges are rapidly adopting.

Rob Guerriere writes that the EDI industry is investing a lot of time and money addressing SOCIAL supply chain issues right now. He also states that he believes this is the battleground that will determine the winners and losers over the next 5 years.

Social supply chain issues has to do with being able to find, connect and collaborate with your business partners, vendors and customers in an efficient means and often referred to as Web 2.0 (or Enterprise 2.0 in the business context). At a recent GXS conference (GXS is a leading EDI company that recently announced they are merging with Inovis) they announced the launch of two new tools that addresses social supply chain networks. The functionality includes user groups, threaded discussions with support personal and other customers, as well as the ability to chat and post support tickets.

Social Business Networks (SBNs) is one of the hottest areas, and major corporations and government agency CIOs are looking into today. One of the first and best places for organizations to implement this strategy is in the EDI and B2B integration space. It is the purpose of EDI and B2B systems to connect an enterprise with their network, or community of trading partners. The ability to quickly find customers, suppliers, banks and other trading partners and easily connect with them is a perfect use case. I still believe SAP's investment last year in Linkedin and Crossgate (the EDI exchange) reflects some behind the scenes Enterprise 2.0 strategies.

This week IT research and advisory firm Gartner announced their latest 2009 report “Magic Quadrant for Integration Service Providers”. The EDI exchange that SAP co-owns is now positioned in the Leaders Quadrant. This EDI exchange runs in a cloud computing environment using a SaaS or IaaS (integration as a service) model. Gartner's positioning of this EDI exchange highlights the importance of its global repository of re-usable B2B mappings. Customers can connect once to this EDI exchange and access more than 40,000 pre-integrated business partner profiles, regardless of transaction type or volume. Instead of providing only generic data standards and toolsets, this exchange includes partner-specific mappings, communications, and processes aligned with ERP application installations and upgrades. This is an Enterprise 2.0 model or social networking for businesses.

I invite your thoughts and comments.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Wal-Mart and Supply Chain Financing Require EDI

In Saturday's Edition of the Wall Street Journal (November 14, 2009) there was an article called Wal-Mart Program Will Aid Suppliers by Vanessa O'Connell. The article described how Wal-Mart, in partnership with Wells Fargo & Co and Citigroup, have created a new Supplier Alliance Program designed to provide supply chain financing to their suppliers.

I have been involved with similar supply chain financing programs in my role as an SAP EDI consultant. These programs most often require EDI and B2B connectivity to work well. Why? Let me first explain the process. It is all about the supplier getting paid faster. That means instead of waiting 60-120 days for payment from the retailer, the supplier delivers the products and then factors the invoice amount through a participating bank and receives payment within 10-15 days. In this case the interest rate and fees charged by the banks are less because of Wal-Marts participation.

The key to getting paid faster is being able to navigate the retailer's invoice and approval processes faster. EDI and B2B connectivity removes the postal service delay, data entry delay and paper processing components of the process. With EDI the electronic invoice is directly integrated with the retailers' automated accounts payable workflow process.

EDI between the supplier and retailer makes the invoice process go faster. EDI between the retailer, supplier and the bank make the factoring process faster. In order for supply chain financing to work well, it requires a good EDI integration between all parties.

If EDI is not possible with a segment of suppliers, then there are companies like BancTec that retailers can contract with that provide outsourced or insourced services to scan/OCR all inbound paper invoices and to process them so they are entered into the SAP or other ERP system quickly.

SAP users can work with SAP Partners OpenText and Crossgate (SAP co-owns this EDI exchange) to automate and optimize their accounts payable processes nicely. Crossgate provides the EDI/B2B integration and OpenText through their Vendor Invoice Management system can automate the invoice approval processes.

If you would like to discuss these in more detail email me.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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EDI, SOA, SAP NetWeaver and Cloud Computing

If you are using custom integration scripts to move data back and forth from your EDI system to your ERP or other database applications, then you are in trouble. The clock is ticking. Business and IT environments change much too quickly these days for any company to be using custom integration scripts.

When I was the EDI Manager of a computer manufacturer I remember studying the spider web of custom integration scripts to see how EDI data got from point A to point B. I remember asking for documentation on the scripts and hearing nothing but laughter. I remember asking what systems would be impacted if a business process was moved from one application to another vendor's application and no one could answer the question.

Custom integration scripts will ultimately damage the business. Why? They are way too expensive to maintain, edit and support. They can not be easily changed and over the years companies can accumulate thousands of them (for a related article click here). Businesses must be able to rapidly change, add and support integrations today.

SOA (Service Oriented Architectures) models for integrating EDI with SAP and other database applications must be implemented. SAP NetWeaver PI is a good platform to implement the eSOA approach to EDI integration. Integrations between the SAP ERP and your EDI system can become services that are stored in the Enterprise Services Repository and available for reuse and editing.

This approach avoids many of the problems caused by most custom integration scripts for EDI. It gives the enterprise the ability to quickly find, edit and use pre-existing services.

Starting in late 2008 SAP has been developing and promoting a new concept for EDI. A network-centric approach to EDI that calls for the use of an EDI Exchange that utilizes SAP NetWeaver in a cloud computing model. All SAP users can subscribe to it and access it using a NetWeaver-to-NetWeaver connection. New Enhancement Packages (SAP updates) will come with pre-developed EDI integration services in the Enterprise Services Repository. It is a very interesting concept that is pointing us to the future.

Here is the biggest problem. Management does not want to hear about fixing something they think works. They don't want to reserve budget to fix what works today even if it is a ticking time bomb. Good Luck!

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Who Wants Cloud Computing Other Than SAP for EDI?

In this article by Gartner's Thomas Bittman, he answers the question on which industries are most interested in cloud computing. He answers the question by listing the industries that have asked Gartner the most questions about cloud computing.

I am interested in this question as well since SAP has been strongly pushing their co-owned EDI exchange called Crossgate that operates in a cloud computing model.

Here is the list from Mr. Bittman:

1. Financial services (12%)
2. Manufacturing (10%)
3. Business and management services (10%)
4. Telecommunications and equipment (9%)
5. Government (7%)
6. Insurance (6%)
7. Oil, gas and electric (5%)
8. Professional/specialized services (5%)
9. Schools and education services (4%)
10. Food (4%)
11. Retail (4%)
12. Healthcare (4%)
13. Media (3%)
14. Chemical and pharmaceutical (3%)
15. Military and National Security (3%)
16. Freight services (2%)
17. Energy management (2%)
18. Membership organizations (2%)
19. Commercial physical research (1%)
20. Other (4%)

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP EDI, Inovis and Cloud Computing

SAP and Crossgate (the EDI Exchange that SAP co-owns), are not the only companies talking about EDI in a cloud computing environment. Inovis' chief technology officer was recently quoted saying the following, "Our customers are dealing with a perfect storm of rising partner transactions, governance mandates and reduced staff and budgets. Our B2B cloud integration platform has gotten great feedback as a flexible way to solve these challenges, both for today and tomorrow," said Erik Huddleston, Inovis chief technology officer.


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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Crossgate Rises to the Top Category of EDI Service Providers

In this blog article by Rob Guerriere on the recent Forrester report called B2B Service Providers 2009 he talks about the fact that several German EDI companies have quickly risen to the top. Crossgate, a company co-owned by SAP, is one of them listed.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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SAP EDI is a Community Effort

EDI is all about communicating with a community of business partners, service providers and customers. It is not about internal operations and IT infrastructure, but external. It is about your ability to externally communicate business information in the easiest and most cost effective manner to conduct more efficient business.

Traditionally, SAP EDI in large companies with many customers, service providers and suppliers required many internal IT resources, computer servers, security processes, EDI consultants, EDI software systems and hundreds of internal meetings to set-up. This was all before any EDI data was being transmitted. Once all of the internal EDI infrastructure was installed and ready, long and expensive multi-year trading partners implementations could begin.

The challenge with the traditional methodology is that business processes and trading partners change faster than you can implement EDI transactions with them. Just when you finish getting your largest suppliers connected, you acquire a new company and must start over with a new implementation effort. It is very rare that a company can implement EDI with more than 20% of their trading partners. That means 80% of trading partners continue to conduct business using slow paper based processes.

If each SAP customer continues to attempt to implement all of their EDI themselves, it will never succeed at replacing paper systems. Business changes faster than EDI transactions can be implemented.

What is the answer? The community of SAP users must all work together. Like farmers joining together to gather a harvest before the rains.

If each SAP customer could benefit from the EDI implementations that other SAP users have already completed, then the community could provide huge benefits. What would this look like?

1. There would need to be a central hub or exchange where all of the connections from trading partners to SAP customers could be registered and stored.
2. This list of registered trading partners, business processes and supported data formats would need to be available for querying by all members.
3. The registered connections would need to be reusable by other SAP users. This requires that all trading partners' supported data formats and standards be translated into a canonical data model.
4. SAP users would be able to create 1 connection per business process into the hub and then take advantage of the canonical data model to send and receive data from all of the SAP communities' trading partners.
5. To reduce costs, EDI experts at the hub could manage all of the IT infrastructure, operations and support.
6. SAP users would simply connect into this SAP community hub in a cloud computing environment using IDocs, NetWeaver PI, tRFC or web services once per business process.

If 1,000 SAP users registered and connected 10 trading partners per month on the SAP Community hub, you would have 10,000 connected trading partners in 4 weeks, and 120,000 in one year. This phenomena is called the network effect. It is a network-centric approach to EDI and the one that has the best chance of maximizing the value of EDI and B2B data exchanges and reducing the largest amount of paper from the system. It is the green method and the lowest cost method.

In the network-centric method of supporting EDI, SAP customers could eliminate internal EDI infrastructure, hardware, software and headcount. Simple NetWeaver PI connections to the community hub is all that is required for conduct EDI and B2B.

This evolution of EDI from internal departments and expensive infrastructure to low cost external services is similar to the evolution of electricity. In the early days of manufacturing when electricity was first used, each company needed to invest in and operate their own private power generation plant to supply electricity. This investment and effort stopped once communities formed electrical co-ops and utilities that could supply services to the entire community. EDI has reached this mile post.

Last year, SAP began this move by investing in an EDI Exchange for SAP users.

For a related article see: SAP and the Big Switch

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
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Too Big to Manage? Complexity, Cloud Computing and EDI

This week I read an article called Too Big to Manage?, in the Wall Street Journal, The Journal Report, Monday, October 26, 2009. The subtitle is Some companies are simply too complex to be run efficiently. The focus of the article was complexity, and how complexity can overwhelm management. I have been there. I have been an executive that was completely overwhelmed by the complexity of managing all the various components and competing interests in a fast growing high tech company. This article resonated with me. In hindsight I recognized that much of the complexity was unnecessary and not core to the success of my company.

One of the solutions, listed in the article, that helps companies reduce complexity is to, "Outsource or spin off nonstrategic services. Many companies have taken entire business processes off of their books, such as IT, finance, logistics and human resources, thus simplifying their internal operations dramatically."

In my experience, R&D, product delivery (software development and professional services), marketing, sales and customer service were core, but just about everything else should have been outsourced.

In this article I identify the large number of people and departments that get involved in even a simple EDI implementations. Traditional EDI is complex and resource intensive. Many large companies have directly contacted me this year to ask my advice on outsourcing EDI as a nonstrategic service. It is required, but not as an internal effort. Many companies are better served by simply connecting their SAP ERP to an SAP-centric EDI Exchange and letting all the complexity be managed in an external cloud computing environment.

Focus your IT brain power on something that will actually produce additional value for the company. Traditional EDI and B2B are no longer considered competitive differentiators. All large companies have these capabilities. Therefore, the advantages are now found only in making it less expensive, simpler and more widely used, all of which are accomplished by outsourcing to a quality EDI service provider.

SAP has recently invested in and become a co-owner of an EDI Exchange for SAP users. Why? The same reasons - the believe they can create an EDI Exchange in a cloud computing environment that can provide EDI services faster, simpler and for less money than SAP users could do in-house.

I look forward to your thoughts and comments.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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SAP Event Management, EDI and Cloud Computing

SAP Event Management (SAP EM) is a powerful solution that I believe will be increasingly popular as companies continue the trend of globalization and employing extended multi-enterprise supply chains and contract manufacturers. Here is a brief description of SAP EM that comes from SAP's wiki:

With the SAP® Event Management application your company can monitor and manage events across your distributed processes involving partners, inventories and assets. It captures events from your system and your partners' systems, analyzes them against it's predefined plan and alerts or workflows a response to the required people to react when deviations are found. It comes integrated with SAP® NetWeaver BI and SAP® Auto-Id Infrastructure (RFID enabled scenarios).

RFID and auto-id solutions using both static systems and mobile handheld computers collect data that are used to report on the shipping status and assembly line progress of various components. This data is fed into SAP EM via EDI or B2B data exchanges.

Multi-enterprise supply chains are inherently risky as you add more variables that can go wrong. Each participant in a multi-enterprise supply chain has its own supply chain and priorities that can become a dependency to your project's success. Include cultural issues, different languages, geo-political uncertainties, taxes, currency exchange rates, laws and regulations to the mix and you have a recipe for excitement and drama.

The management of an extended and multi-enterprise supply chain requires a much higher and advanced level of automation, visibility and management than ever before. SAP EM is a solution well positioned for this role.

I see extended multi-enterprise supply chains as nearly an entity in itself. It is a shared community effort, an organism with many different living parts, a process that requires cooperation from all parties to be successful. In many cases, I think it would be better if SAP EM were a hosted solution in a cloud computing environment that supported the extended multi-enterprise supply chain community, rather than being owned by one particular participant in the process.

Let's now discuss for a moment the role EDI and B2B messages plays in the SAP EM environment. All participants in this extended multi-enterprise supply chain need to be sharing data that informs the other participants as to the progress, schedules and status of their segment of the supply chain process. They need to receive orders, acknowledge the order, order parts, receive parts, manufacture products, ship products, provide advanced shipping notices, invoice etc. This is where EDI and B2B messages come in.

EDI is structured data that is documented in a standardized manner and shared between trading partners. This structured data can be called EDI or B2B (business-to-business) data exchanges. I will use the term EDI to cover both areas. This EDI data is what the participants of the extended multi-enterprise supply chain (I will make up an acronym - EMESC) send to the SAP EM to communicate status and other business data necessary for the supply chain's success.

In the same manner as SAP EM seems to be best suited for a SaaS model in a cloud computing environment because it is a shared process by a community of members, I think the EDI/B2B data exchanges should also be an extension of the EMESC. It does not seem to make sense to have one of the many participants be responsible for the integration, development, operations and support of all participant's EDI exchanges. This responsibility should be owned by the same SaaS provider that supports the hosted SAP EM in a cloud computing environment.

I find the entire concept of SAP Event Management as a solution for tracking the entire supply chain fascinating. It has the same capability to alter the landscape of traditional supply chain management as does Business Network Transformation or SAP EDI in a cloud.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Switching from Traditional EDI and Going Green

It appears I am not the only one talking about how EDI helps companies go green. Several weeks back I wrote the article called Going Green with SAP EDI and e-Invoicing, and today I read this announcement, Moving towards a Green Future - SANYO Switches to EDI On-Demand.

SANYO Component Europe GmbH, the leading supplier of industrial batteries for hybrid vehicles and other electronic automotive components, is switching its EDI communications with business partners to an on-demand EDI service (using a cloud computing model) that is "powered by SAP" which is fully in line with its green "Think GAIA" corporate vision.

It appears that SANYO sees switching from a traditional EDI model to an in the cloud computing model as helping them achieve their goals of accelerating the introduction of innovative and ecologically friendly technologies, and to become a leading supplier of industrial batteries for the automobiles of the future. The previous solution, an in-house EDI middleware solution, was too expensive to maintain and to continue adding new trading partners and complex EDI requirements.

Let's attempt to interpret this announcement. SANYO likely has a new supply chain, new customers and new logistics partners for these products. That means several new EDI implementation projects and EDI/B2B on-boarding initiatives. That translates into lots of expensive work and a long term commitment to the traditional in-house model of EDI if done internally. Many companies pause before starting these kinds of costly initiatives and ask themselves if the traditional approach of running an EDI system and staffing their own internal EDI department is the best strategy for EDI and B2B support in the long term. Obviously SANYO decided that it was a good time to switch to the cloud computing model for EDI/B2B promoted by SAP.

For related articles read:

• SAP's New Strategy for EDI
• SAP Centric EDI

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Upfront SAP EDI Costs - Or Pay as You Go

Sometimes I don't write very well. In this article from NPR's Jon Hamilton dated October 16, 2009 he reports that it take only about 1/2 second to transform a thought into words. Sometimes it only takes 3/4 of a second for my thoughts to end up on a blog. I apologize. An article I recently wrote called EDI - $500,000 Invested and it Still Doesn't Work generated quite a few comments that focused on issues related to poor project management. Since that was not a focus of my article, I must conclude I wrote poorly and did not make my point. As I am not one to give up easily, I will try again.

In traditional EDI, in a medium to large size enterprise, one must spend considerable money up front simply to purchase the EDI translator and set-up all the associated hardware, software and integration processes to support it. A company must also invest considerable amounts of money into staffing an EDI team, or hiring consultants, and creating a project plan. EDI standards must be considered, trading partner's surveyed, data formats reviewed, ERP integration strategies determined and communication protocols selected. All of this work is done before there is an ROI. That was the point readers of my original article did not get. So again, all of the infrastructure, licenses, staffing and meeting after meetings must be done in advance of any ROI in the traditional way of running an internal EDI/B2B department.

The new alternative, is to Pay-as-You-Go for EDI and B2B integrations and support it in a cloud computing environment so you can immediately begin receiving a ROI. As I have mentioned earlier, many IT departments are being told to demonstrate a 90 day ROI on any IT investments or don't bother submitting the request. You cannot show a 90 day ROI if you choose to implement a traditional in-house EDI system and department. The ROI is a multi-year effort in most cases. Therefore, IT and business units must either not implement new EDI in the traditional mode, or find an alternative manner of implementing EDI that shows a much quicker ROI.

SAP understands this point They invested in an EDI and e-Invoicing Exchange for SAP users that functions in a cloud computing environment with a subscription business model. All of the EDI systems, global e-Invoicing processes, EDI standards, communication protocols, help desks and EDI expertise is already set-up and available in a monthly subscription model. You only start paying a set-up and service fee when you implement a new EDI or B2B trading partner's processes. You don't need any hardware, software or EDI staff investment upfront.

This model enables you to immediately start showing an ROI. It is the new method and strategy that changing economic times demands from IT vendors.

If you would like to discuss this topic in more detail please contact me.

For related articles please read:

• Going Green with SAP EDI and Electronic Invoicing
• Breakdown of e-Invoicing Benefits
• Converting Paper Invoices to Electronic Invoices is Required for Global E-Commerce
• The Benefits of e-Invoicing

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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The True Costs of EDI

In this article the true costs of implementing EDI are discussed. The costs go way beyond that which is usually reflected on the IT budget spreadsheet. Why? The business unit must be involved as are people involved up and down the supply chain and other impacted departments. For a true ROI on EDI it is important to consider the points made in this article.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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EDI - $500,000 Invested and it Still Doesn't Work

It is very important these days for IT and business departments to get a fast return on their investment. I have heard business managers mandate 90 day ROIs or the IT project will not be approved. This is a big challenge for EDI vendors. Why? Let me share some experiences.

Many EDI translators are expensive. When you add up the license costs, the various servers, development, testing and production, consulting, implementation, training, hardware, communications, mappers, EDI standards, ERP adaptors, integration development etc, it is not unusual for all of this to add up to over $500,000. Here is the big problem - it still doesn't provide an ROI after all of that investment. The $500,000 is just to get you prepared.

Prepared, that is, for the start of your expensive and long multi-year trading partner implementation project. This could be more expensive than the original investment. The ROI will only start once data is moving in production through the EDI and integration system between you and your trading partner. Everything that you spend money on that does not move production data between you and your trading partner can not provide an ROI.

Here is an alternative to consider. Skip all of the software, hardware, integration code development, consultants, etc, and simply use a managed EDI service. Only pay for actual implementations and production services. That way every penny that you spend is for an ROI, not to prepare you for an eventual ROI.

SAP co-owns their own EDI managed service for SAP users that runs in a cloud computing environment so you have no hardware or software to purchase and maintain. You only pay for connecting to your trading partners and supporting a production environment. Something to consider.

If you would like to discuss this topic in more detail please email me.

For related articles please see:

Implementing EDI

Staffing for an internal EDI department

EDI Business Network Transformation

EDI and B2B Challenges

EDI data, mappings and other intellectual assets

Considerations for outsourcing EDI

SAP's New Strategy for EDI

The Real Purpose of EDI

More on EDI Staffing

Documenting EDI data requirements

Creating an EDI Implementation Guide

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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How EDI and B2B Connections Can Destroy Your Company

I realize the title of this article may be a bit dramatic, but it is true.  I have seen companies that desparately needed to change their business model, upgrade their SAP ERP systems and implement new business processes, suddenly halt this effort due to the unexpected and unanticipated requirements to replace all of their existing EDI and B2B integrations. 

Think of it this way, have you ever needed to move the entertainment system in your house?  The mass of dust covered cords, wires and cables hidden behind it can be daunting.  You may hesitate to even move the entertainment system out of fear that something will become disconnected and not work.  It is the same process multiplied by 100,000 with your trading partners and their integration scripts.

Let's say you have 1,000 suppliers.  If you are going to upgrade, change or alter the data model of your ERP, it is highly likely you are going to quickly start breaking mission critical EDI data exchanges between you and your suppliers.  This tends to enrage just about everyone in your company and at your suppliers. 

OK, there is a challenge here, but there is also a very desparate need to upgrade or change the ERP so you can take advantage of all kinds of new business processes, technologies and application features.  The problem is the ERP folks and the business managers didn't talk to the EDI department when they purchased the new upgrade.  Now the ERP is suppose to be functioning and in production in 5 months, but the EDI department is already buried under just routine operations and support.

At this point things get really crazy.  The business managers start blaming the EDI department for obstructing progress, innovation and business transformation.  The EDI team just looks up from their terminals and says, "huh?" 

Now the CIO is in hot water.  She calls the EDI Manager to her office and asks, "How come you are stopping the company from meeting their quarterly and yearly goals?"  The EDI Manager says, "Not our fault.  There is 20 years worth of custom and undocumented integration code that an upgrade to the ERP will break.  Has nothing to do with us.  The ERP folks are breaking what already works."

The story gets darker.  The CIO walks the green mile to the CEO's office and says there is 20 years worth of EDI integration code and scripts that need to be replaced, and it will take 2 years worth of unbudgeted development to re-integrate and test all of these EDI integrations.  The CEO steps around his desk and quietly shuts the door of his office.

When the CEO's door reopens 3 hours later, the CIO has been tasked with re-introducing manual spreadsheets, phone calls, emails and faxes to the suppliers.  This step 15 years back in time is needed to keep the ERP upgrade on schedule without EDI interference. 

What the 3 hour meeting in the CEO's office did not fully acknowledge or plan for is how much the supply chain, logistics department and customers would be effected by this return to manual systems.  The downward spiral begins.

I have seen this process unveiled before my very own eyes.  How can it be avoided?  There needs to be a plan in advance to create a layer of separation between your ERP and your EDI translators and trading partners.  This layer is a change management insurance policy.  Custom EDI integration scripts need to be replaced with one integration per business process.  This single integration needs to support all varieties of Purchase Orders, Invoices and other EDI messages.  You cannot have a new integration to your ERP for every trading partner's custom data file.  The EDI integration needs to be a standardized process that connects to a canonical data model associated with the EDI translator.  This is usually only possible if you are using a manage service from a large EDI/B2B hub.  The alternative, is the situation documented above.

This is one of those things that no one likes to plan for, but the business depends on it.

If you would like to discuss this topic in more detail please email me.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict  
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Mobile and Location Based Services and EDI Integration

Location based services are not usually associated with EDI or B2B integrations, however, I am considering a scenario where that might change.  By location based services we generally think of mobile phones, Smart Phones and handheld computers.  We think of various marketing and informational programs that can target the phones of people within a specific distant of a business.  For example, you want Pizza so you open Safari on your iPhone and type in the word pizza.  It immediately shows you on a map the location of businesses that serve pizza.  By tapping on the screen up pops their address, phone number and website.  How does EDI fit into that?

Many large companies have central ERPs (enterprise resource planning) software that manages their business.  ERPs manage just about everything from new employee hires, transportation, shipping and manufacturing.  Sometimes the information you need in a "location based services" application is kept on one or more ERPs. This may involve real-time A2A (application-to-application) or EDI integration to access this information. 

In this article there is an interesting example of LBSs from Subway (the sandwich folks) and a scenario with a grocery store chain.

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Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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Implementing, Organizing and Managing SAP EDI

For any company that is considering a new EDI implementation and is struggling to understand EDI and what it takes to develop an EDI department, the links I have provided below should prove useful. 

The first question a company will want to ask themselves is why support EDI or other B2B data exchanges at all?  What is the purpose and business value?  EDI and B2B systems, integrations and support are expensive and time consuming.  What is the expected ROI?  Often customers demand EDI support, and the business will quickly see the value in implementing EDI (electronic data interchange) with their suppliers and logistics partners  The reason you want to document the purposes is that it helps focus support and encourage perserverance during challenging implementations.

If your company can identify why supporting EDI is important, then the second question is should EDI be supported internally or can it be subscribed to as a service (SaaS or IaaS models)?  EDI systems, staffing, development, integrations, implementations, operations and support are very expensive.  The company really must understand the business value upfront, and then decide if this huge multi-year investment is worthwhile to support internally.  Not only is it expensive, but it will require your best IT developers and brains to get everything working.  Is this the best use of your best brains this year?  If not, can you simply subscribe to an external EDI service provider that will take care of everything for a small set-up fee and a monthly service fee?

For those new to the world of EDI, or just want a refresher, the following links identify many of the tasks, challenges and issues that need to be considered and understood.

Implementing EDI

Staffing for an internal EDI department

EDI Business Network Transformation

EDI and B2B Challenges

EDI data, mappings and other intellectual assets

Considerations for outsourcing EDI

SAP's New Strategy for EDI

The Real Purpose of EDI

More on EDI Staffing

Documenting EDI data requirements

Creating an EDI Implementation Guide

If you would like to discuss any of these topics in more detail, or schedule a training class for your business please contact me.

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Author Kevin Benedict
EDI, B2B and Mobile Computing Evangelist and Consultant
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://mobileenterprisestrategies.blogspot.com/

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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EDI Audits and ROIs for Supply Chain Management

EDI and B2B systems are expensive and time consuming to setup. A positive ROI (Return on Investment) is realized only after economies of scale are reached. This may come after the successful implementation of 10 high volume trading partners or 1000 low volume. The exact ROI figure depends on the initial investment and the expected returns from each successful implementation. What is known is that the faster, and simpler the implementation the less expensive it will be. Also, the more that the initial implementation work can be reused and leveraged, the more cost effective it will be and the sooner the ROI will be recognized.

In order to maximize the ROI, it is necessary that we prioritize our tasks and efforts. Which trading partners do we implement with first, high volume or high value? Where is the greatest potential savings or returns? One of the first steps to implementing our strategy is to audit our internal business processes, and then to audit our external business processes that touch our trading partners.

The following list contains questions that should be resolved before and during EDI and B2B system implementations:

1. What information is exchanged between business partners? This includes formal documents such as purchase orders, invoices, etc., as well as informal documents and communications such as messages, memos, phone calls and faxes. All methods of communication have costs associated with them.
2. How and where is the information initiated; manual input, screen entry, or computer generated?
3. Where can time be saved?
4. How much labor savings could be recognized?
5. What is the internal flow of information?
6. Currently - How many copies are produced, and in what format?
7. Who receives copies and why?
8. Are these copies stored and for how long?
9. What control and reporting measures are used—status reporting, audit trails, security safeguards?
10. Who needs to be involved in the work flow? Who approves the business documents or transactions and how?
11. What specific information is needed for current application programs—form of data, data flow between applications, entry of data?
12. What information is available from application programs?
13. What results are produced?
14. What is the format and structure of the data output?
15. How does the speed of processing documents effect the business? Some are time sensitive, others not so much.

Once internal and external business processes have been documented, it is necessary to evaluate the changes required to your internal systems to accommodate the EDI / B2B standards that both you and your partners require.

Additional Issues:

1. The addition of new data to the database to meet standards requirements.
2. The use of tables to cross-reference part numbers with trading partners.
3. A change in review or approval processes.
4. The development of a data link between the application program and the translation package.
5. Electronic linkages to the database for departments that formerly received manual reports.
6. The need to bridge between applications if multiple departments use the same information.

If you would like to discuss this topic in more detail please contact me.

Airlines, EDI, RFID, Bar Code Scanning and Mobile Computing

In today's edition of the Wall Street Journal in the Technology section is an article written by Daniel Michaels called Airline Industry Gets Smarter with Bags - Carriers, Airports Use Scanners, Radio Tags and Software to Improve Tracking of Luggage.   This article details some of the steps that airports and airlines are taking to use bar codes, bar code scanners and RFID tags to improve the tracking of bags.  Why?  Each bag that they lose costs them on average of $100 to return to the angry owner.

At some airports in 2006 over 3.9% of the bags were mishandled.  Now days the number is closer to 1.6%.  OK, that represents savings, but the number is still VERY bad.  Why is there still such a problem?  The article says many of the airport and airline software applications still don't communicate with each other.  When they say communicate, they mean exchange EDI messages with each other.

Traditional EDI has been around for 30 years or more.  Why can't these systems exchange EDI today?  The answer is likely the fact that EDI is complex and difficult to implement and many EDI departments can only get the top 10-20% of their trading partner's implemented before they get bogged down in operations, support and maintenance issues.  This leaves the majority of their trading partners without electronic data interchanges.  As a result you have companies spending millions on the latest bar code and RFID technologies, but without even basic electronic B2B communications between systems.  It is not useful to have sexy data collection technology (RFID, bar code scanners with pistol grips) on the frontlines, if the data cannot be effectively shared (via EDI/B2B) and used for actionable decision making on the backend.

Many of these problems can now be resolved by using on-demand EDI managed services in cloud computing environments.  SAP recently invested in and became a co-owner in Crossgate for the purpose of simplifying EDI implementations and support for SAP users.  Supporting EDI should no longer be a challenge when it is available as an "object" that can be called and activated by your SAP system.

If you would like to discuss this topic in more detail please contact me.

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Author Kevin Benedict
http://b2b-bpo.blogspot.com/
I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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SAP and the Big Switch

In Nicolas Carr's bestseller, The Big Switch, he speaks of past, present and future trends in the evolution of technology.  He makes some very good observations and predictions that I can see happening today at SAP.  Here is an excerpt from The Big Switch:

A hundred years ago, companies stopped generating their own power with steam engines and dynamos and plugged into the newly built electric grid. The cheap power pumped out by electric utilities didn’t just change how businesses operate. It set off a chain reaction of economic and social transformations that brought the modern world into existence. Today, a similar revolution is under way. Hooked up to the Internet’s global computing grid, massive information-processing plants have begun pumping data and software code into our homes and businesses. This time, it’s computing that’s turning into a utility.

Thirty years ago, companies started building their own expensive internal EDI software and hardware infrastructures, staffing these departments and beginning long multi-year integration and implementation projects.  That was the only way to implement EDI at the time.  Today, there is a new Network-centric model that is revolutionizing SAP EDI.  SAP has invested and become a co-owner in a global EDI and B2B exchange that is hooked up to the Internet's global computing grid, with massive information-processing plants and provides SAP users with EDI and B2B connectivity as a utility.  This new utility paradigm, will result in many of the same revolutionary changes Mr. Carr sees in other industries and a permanent change to the world of EDI.

Providing EDI and B2B connectivity in a SAP-centric utility model is the next logical step.  Voice and data communications are all supported by utility services with monthly service fees - B2B and EDI data communications is a natural next step.

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Author Kevin Benedict
http://b2b-bpo.blogspot.com
I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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SAP EDI and SAP Mobile Computing - The Common Thread

Have you ever considered how similar mobile computing and traditional EDI and B2B e-commerce are to each other? I have expertise in both areas so have found myself pondering it more than once. Let’s start with a high level view of mobile computing.

1. The mobile device must communicate with a back-office server

2. There must be an understanding between the mobile device and the back-office server on what files are to be sent and received

3. There must be a secure method of transmitting data in place

4. The back-office server must recognize and validate the mobile sender

5. The back-office server must recognize the data format

6. The back-office server must understand and be able to consume the structured data file

7. The mobile data must be integrated with the business application that consumes the data.

That is just about the same process involved in traditional EDI and B2B. I believe that is why you see SAP’s NetWeaver supporting both EDI and the NetWeaver Mobile framework.

For more information on SAP Mobility click here.


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Author Kevin Benedict
http://b2b-bpo.blogspot.com
I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
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SAP and The Big Switch

I highly recommend the Nicolas Carr book called The Big Switch.  I wrote an article recently on this book and the implications of Carr's predictions on both EDI and SAP.


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Author Kevin Benedict
http://b2b-bpo.blogspot.com
I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.
************************************************

SAP EDI and Linkedin

One year ago SAP's Venture Capital arm made an investment in Linkedin.  Linkedin is described as a  business-oriented social networking site founded in December 2002 and used mainly for professional networking.  About a year ago, SAP AG also announced an investment in another collaboration company in the EDI and B2B industry called Crossgate.  Let’s first talk about Linkedin.

Linkedin enables a person to create an online profile (much like a resume or CV) and then connect to other people’s profiles that are known through personal and/or professional relations. The result is the user ends up with millions of professional connections through relationships that have relationships that have relationships. You connect only once, but then you have access to millions of other professionals that are in Linkedin’s collaborative network. Each user that joins Linkedin brings with them a network of professional contacts and relationships, which are added to and become part of the collaborative network. The ability to easily connect to other users on the network is already built into the system. It is a simple button click to expand one’s collaborative network.

People do not have to program custom html code to add their resume/CV to Linkedin.  There is a standard interface.  You access Linkedin through your browser, fill in the online data fields, upload graphics and documents.  The user does not have to create custom programming code to connect to their professional network.  Linkedin has already created standardized processes and database connections. 

SAP through their recent investment and co-ownership of Crossgate, is now rolling out a similar network-centric infrastructure for companies worldwide that require EDI and B2B connectivity and collaborative neworks.  SAP CEO Leo Apotheker recently stated, “SAP will be focusing future development of its business suite of products and Netweaver integration middleware at meeting business needs to develop and maintain collaborative networks.”

Why would a company choose to self fund a huge investment into building and supporting a large custom internal EDI and B2B system that has no reusability outside of the 4 walls of their IT department?  There are no economies of scale in this traditional model.  This is like everyone building their own point-to-point personal internet rather than participating in the global internet.  The business value comes through the size of your collaboration network.  You can either choose to implement each trading partner's EDI messages one at a time, or you can plug into the vast global network consisting of tens of thousands of pre-connected trading partners. 

Linkedin would never grow if each time you added a professional relationship, it required custom programming.  It expanded so rapidly and efficiently because finding and connecting to other professionals was so very easy.  EDI and B2B, although much more complex, can also benefit from this network-centric approach that reduces the cost for every participant and makes connecting to your trading partners a simple standardized process that can be reused globally.

If you would like to discuss this topic in more detail please contact me.


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Author Kevin Benedict
http://b2b-bpo.blogspot.com/
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I am a loose canon.  These are my comments, no matter who else I want to blame, they are mine alone.  These comments are not approved by my employer, but if they had the time to read them, I am sure they would come around.

SAP Steps Into the Growing B2B Services Market Via Crossgate

For those of you that like to ponder EDI and B2B marketplace and industry strategies this article from Gartner is an interesting read.  Here are some excerpts:

"SAP has formalized (by becoming a co-owner) and strengthened its alliance with Crossgate as it makes a decisive move into the business-to-business (EDI) infrastructure market...The declared objective of this transaction is to keep the strategies of the two companies aligned. However, the main effects will be for SAP to have an out-of-the-box B2B services connectivity solution, and for Crossgate to expand further into SAP's customer base."

View SAP CEO Léo Apotheker's comments on the Crossgate investment on YouTube.

"SAP customers will be able to connect immediately to all other companies subscribing to Crossgate’s B2B 360° Services, and add any trading partners that are not already there..."

"Access to Crossgate EDI and B2B services will ship as a built-in service within a SAP enhancement package, which minimizes the need for application integration."

"SAP will likely drive much of Crossgate’s strategy in the future."

If you would like to discuss this topic in more detail please contact me.

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Author Kevin Benedict
http://b2b-bpo.blogspot.com/
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SAP ERP Implementations Go Bad without Effective EDI and B2B Planning and Strategies

Poor planning around EDI and B2B implementations can cause major delays and unanticipated costs for ERP implementations.  A large percentage of the data that is used by ERP's like SAP come into the system from their trading partners.  If this data, via EDI or other B2B messages, is not moving then the system does not work.  This can mean a multi-million dollar implemenation can ground to a halt if the EDI implementations were not aligned with the ERP project.

Most SAP or other ERP upgrades, consolidations, customizations or the adoption of new business processes will break or change the existing EDI and B2B integration scripts.  Often the IT and Business Managers do not understand how significant these changes, and how wide spread the impact of these changes will be for the B2B processes.  The time and resources needed for this effort are often over looked and unplanned.  Once the impact is realized, it translates into delayed implementations and higher project costs.  For more information on these implementation costs and risks read here.

As companies increasingly become integrated into business networks (communities of customers, suppliers, logistics partners,etc) not unlike people and social networks, the dependency on modern, efficient EDI and B2B communications also increases.  Without the data, the business process stops.

Effective planning as to the impact of ERP upgrades on the EDI and B2B processes is needed in advance.  The purpose of many ERP upgrades and implementation projects is to reduce costs and simplify IT environments as described here, but costs savings and ROIs can disappear quick if the project scope is unknown, the effort unplanned and the costs not covered in the budget.

If you would like to discuss this subject in more detail please contact me, or attend the upcoming webinar called Top 3 Reasons to Outsource EDI with SAP.

Related Articles:

• http://b2b-bpo.blogspot.com/2008/12/sap-outside-four-walls-supply-chains.html
• http://b2b-bpo.blogspot.com/2009/03/what-does-it-mean-to-have-sap-centric.html
• http://b2b-bpo.blogspot.com/2008/12/who-in-company-needs-edi-and-b2b.html

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Author Kevin Benedict
http://b2b-bpo.blogspot.com
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Top 3 Reasons to Outsource EDI with SAP

In this webinar, learn how outsourcing EDI and B2B can:

1. Reduce ongoing infrastructure costs by 30% or more 
2. Reduce the amount of staff required to perform daily tasks
3. Most importantly, create organizational agility.

One area often overlooked by IT managers is EDI and B2B integration. Not only do most organizations have a large amount of waste within their global integration landscape, there is also a far-reaching effect on the entire supply chain. On average, in-house EDI teams have less than 20% of a company’s business network automated, and change management is time-consuming and costly. For example, it can take up to 37 days to automate a partner and up to $15,000 to integrate one partner process (i.e., a customer sales order).

Speaker Bio(s): Steve Sprague, VP Product Strategy, Crossgate, Inc.

Steve Sprague has been working in the business network enablement and middleware integration space for over 13 years. As VP, Product Strategy for Crossgate, Steve manages global messaging, product strategy, and field enablement for the SAP relationship in North America. Prior to joining Crossgate, Steve spent 6 years as EVP, Marketing & Product Strategy with SEEBURGER. In that role, his main responsibility was Product Strategy.

Title: eSeminar - Top 3 Reasons to Outsource EDI with SAP

Register Here

Date: Thursday, September 24, 2009
Time: 12:00 AM - 1:00 AM EDT
After registering you will receive a confirmation email containing information about joining the Webinar.


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Author Kevin Benedict
http://b2b-bpo.blogspot.com/  
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SAP, EDI, SOA, Integration and Cloud Computing

I read an article today called SOA, Cloud computing and SaaS models and how they work together.  This subject is relevant as companies like SAP are starting to promote SaaS business models such as the EDI and B2B exchange they recently invested in.  The article points out that integration between applications running in cloud computing environments and back office ERPs are major challenges.  I agree in most cases, but SAP has resolved that issue in the EDI space (with their co-owned EDI/B2B exchange) by ensuring their EDI and B2B exchange operates on the same NetWeaver platform as ERP.  This enables relatively simple NetWeaver-to-NetWeaver integrations that span the divide between the enterprise and the cloud.

For related articles read:
• SAP Users and EDI – A New Paradigm - http://b2b-bpo.blogspot.com/2009/08/sap-users-and-edi-new-paradigm.html


• SAP EDI Changes - http://b2b-bpo.blogspot.com/2009/09/sap-edi-and-b2b-changes-and-using.html

• SAP Invests in Crossgate - http://b2b-bpo.blogspot.com/2009/03/sap-fires-shot-across-bow-of-edi-and.html

• SAP’s New Approach to EDI- http://b2b-bpo.blogspot.com/2009/08/crossgate-is-saps-answer-to-edi-and-b2b.html

• SAP-centric EDI - http://b2b-bpo.blogspot.com/2009/03/what-does-it-mean-to-have-sap-centric.html  

• SAP NetWeaver PI Approach to EDI - http://b2b-bpo.blogspot.com/2009/04/new-edi-approach-for-sap-netweaver.html

• EDI & B2B Managed Services - http://b2b-bpo.blogspot.com/2008/10/why-do-companies-use-b2bedi-exchanges.html

If you would like to discuss any of these topics in more detail please contact me.

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Author Kevin Benedict
http://b2b-bpo.blogspot.com/  
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SAP - Why Do They Care About EDI and B2B?

SAP has hundreds of software applications, services and solutions.  Why do they seem to be spending significant efforts on a strategy for EDI and B2B communications and support now days?  In the past they left this market up to third party EDI translator vendors and VANs - companies like Sterling Commerce, Inovis, GXS or SPS Commerce.  I can't speak for SAP, but a look at some of their new solutions may shed light on this question.

• SAP SNC (Supplier Network Collaboration)  - Through SNC, customers and suppliers can simultaneously eliminate inefficiencies in their supply chains by synchronizing the flow of information between them. SNC offers a 360 degree view on supply chain collaboration, offering a company ways to effectively collaborate with its customers, suppliers, 3 rd party logistics providers and outsourced manufacturing partners.
• SAP TM (Transportation Management) - With the SAP Transportation Management application, you can share information and combine orders directly with carriers and forwarders over the Internet, so you can integrate business partners into your company's processes and maintain control of plans.

Both of these SAP solutions are dependent on EDI and B2B communications and messages to work.  The solutions offer little value without.  Therefore, you can understand their desire to actively manage and ensure quick, cost effective and reusable EDI and B2B implementations and support for their customers.

As more and more companies are spread across wide geographical areas and utilize contract manufacturers from all regions of the world, the need for EDI and B2B increases dramatically.  I believe SAP no longer wants to remain vulnerable to the quality of third party EDI translator and VAN companies.  They want to ensure their customers have an SAP-centric EDI and B2B solution that supports the requirements of SAP applications.

Late last year SAP invested in and became a co-owner of Crossgate, an SAP-centric EDI and B2B exchange that utilizes SAP NetWeaver technology.  This managed service exchange is now available globally for all SAP users.

If you would like to discuss this topic in more detail please email me.

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Author Kevin Benedict
http://b2b-bpo.blogspot.com/ 
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SAP's Network-Centric EDI, Part 2

This is Part 2 of this discussion. To read part one click here.

How does a network-centric EDI and B2B strategy work? What is required at the central Exchange that will provide value to the entire network of users? Let's discuss:

1. A canonical data model - a design pattern used to communicate between different data formats. Instead of writing translators between each and every format, it is sufficient just to write a translation between each format and the canonical format.
2. If the backend database application is a known entity, such as SAP ERP, then one ERP "profile" can be developed between the canonical format and SAP for each business process or message type. These are stored for reuse by other SAP users.
3. Since one "Invoice" ERP file can be used to connect to hundreds or thousands of trading partners through the Exchange, any change to the backoffice environment only impacts the Invoice ERP Profile, not your trading partner community. This is a big benefit for change management.
4. A repository of participating network members and their supported business processes and data formats need to be stored and available for query.
5. Sophisticated analytical software applications need to be used to quickly analyze large numbers of complex data formats to identify the commonalities and differences between formats. Entire supplier or customer communities can be analyzed at one time for the purpose of identifying and documenting one "ERP profile" that will produce or consume all the data required to support your communities' business processes. For example, 100 customers want you to send EDI invoices. They all want different data formats for the EDI invoice. You will want to analyze all 100 data formats and create one IDoc or web service that supports the data requirements of all.
6. Develop monitoring software applications that enable users to view and monitor all EDI and B2B transactions going through the system.
7. Develop and operate a secure and world class data center that meets the requirements of IT departments worldwide
8. Include managed services and SLAs that meet the needs of the largest and most sophisticated class of EDI users
9. Develop this service using SAP technologies and SAP NetWeaver PI integrations in a cloud computing environment.
10. Pre-integrate this network-centric EDI exchange with SAP's business processes
11. Jointly develop EDI and B2B support with SAP for upcoming Enhancement packages

These applications, network strategies, SLAs, processes and methodologies enable SAP customers to take advantage of very powerful and sophisticated EDI and B2B solutions that leverage the connections of all members of the network. This new paradigm has the potential to change the economics of EDI and greatly improve the ROI.

If you would like to discuss this subject in more detail please email me.

For part 1 of this discussion click here.

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Author Kevin Benedict
http://b2b-bpo.blogspot.com/
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Network-Centric SAP EDI, Part 1

How is a network-centric approach to EDI different from traditional EDI systems and methodologies? A network-centric approach looks at a group of companies that share something in common and then seeks ways to improve EDI and B2B processes for all participating members. Commonalities may be business processes, industries or a common technology platform that tie this group together into a network. An example of a network could be a community of SAP users.

Since late in 2008, SAP has taken a network-centric approach to EDI and B2B for their network of users. As the author of the SAP applications, technologies and supported business processes, they know what electronic data can be both produced and consumed by the various supported business processes. They also understand the best methodologies for integrating EDI and B2B message data into their systems.

Traditionally all SAP users were required to independently purchase, development, operate and support their own third party EDI environments, even if they were all using the same business processes and sharing many of the same suppliers and customers. This resulted in work redundancies, high costs and inefficiencies in the network. Let me provide a scenario:

• 50 companies are all SAP customers
• 50 companies write and send out RFPs for EDI translators and implementations
• 50 companies purchase 4 new servers (development, testing, production and failover)
• 50 companies hire EDI consultants
• 50 companies hire SAP IDoc and integration developers
• 50 companies hire EDI specialists
• 50 companies write EDI implementation guides for each process that describe their EDI specifications
• 50 companies negotiate with their suppliers, banks and customers about what electronic message formats will be used
• 50 companies begin development and testing cycles with each trading partner and each electronic EDI message

All of those listed tasks and expenses were repeated for each of the 50 companies. That represents a huge level of redundant work and expense. SAP has taken a look at this real-life scenario and developed a network-centric strategy for SAP customers. SAP invested in and became a co-owner of an SAP-centric EDI/B2B exchange called Crossgate that was developed using SAP technology, that centralizes these tasks, stores the content in a central repository and is designed for reuse by other SAP customers. Crossgate is a global EDI and B2B managed services exchange that focuses on bringing efficiencies and reusability to SAP users.
SAP users often share a common technology platform. They share common business processes. They may use NetWeaver PI, they may even connect with many of the same transportation carriers, customers and suppliers. Under this new network-centric approach, all of these connections, mappings, testings, etc, can be reused again and again by other members. Only one central SAP-centric hub is required to support the entire global community of SAP users. The costs are shared, the work is reused, and the efficiencies are recognized by all connected members.

Now that this network-centric approach to EDI and B2B support is available for SAP customers, it will be interesting to understand why a company would want to invest in reinventing - what is already available today to the entire global SAP user base.

If you would like to discuss these subjects in more detail please email me.

Part 2 of this article can be found here.

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Author Kevin Benedict
http://b2b-bpo.blogspot.com/
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SAP EDI Strategies Blog

SAP has announced a series of new EDI and B2B strategies in 2009. SAP calls this new strategy Business Network Transformation and has identified a series of investments, joint development projects and new enterprise services to support this strategy. The blog site called EDI, B2B, SAP and Cloud Computing is focused on these developments and contains over 80 articles related to this subject.

• SAP Netweaver Approach to EDI
• SAP Transportation Mangement

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Author Kevin Benedict
http://b2b-bpo.blogspot.com
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SAP Blog

This blog focuses on EDI and B2B issues as they relate to SAP. Most SAP users require EDI and B2B connectivity with their large customers and suppliers. The SAP applications utilizes EDI data in the following areas:

1. Supply Chain (SAP SNC, SRM, etc)
2. Transportation Management (TM and Inbound and outbound Logistics)
3. Procurement
4. Inventory and Warehouse Management
5. Production Planning
6. Manufacturing Execution
7. Sales Order Management
8. HR Benefits (insurance, 401k, etc.)
9. Global Trade Services
10. Financial Supply Chain
11. Treasury (electronic funds transfers, etc)

SAP is dedicating significant resources this year (2009) to improve the way EDI and B2B is implemented and supported in the SAP Ecosystem. Late last year SAP invested in an EDI/B2B exchange that utilizes SAP technology and is focused on providing managed EDI and B2B services to SAP customers.

If you would like more information on this subject please email me.
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http://b2b-bpo.blogspot.com/
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SAP EDI and B2B Changes and Using NetWeaver PI

There are many rapid changes occurring these days in SAP EDI and B2B support. This article provides a view on the traditional approach and how this is quickly changing.

If you are an SAP customer, the traditional approach to implementing EDI looked as follows:

1. Source and purchase a third party EDI system
2. Purchase and install servers (development, testing and production servers)
3. Hire EDI experts
4. Purchase libraries of EDI standards
5. Select and write your preferred EDI Implementation Guides (requires EDI standards expert)
6. Train EDI staff on EDI system
7. Identify priority customers and suppliers for on-boarding
8. Contact all trading partners to understand and document the EDI or B2B files they are willing to support
9. Scope the on-boarding project
10. Design, develop and deploy integration scripts between SAP and your EDI system
11. Now map all of these business processes from the EDI system to hundreds of different combinations of data formats and communication protocols that your trading partners demand
12. Set-up EDI and IT Custom Service helpdesk
13. Kick-off multi-year on-boarding project
14. Set-up internal processes to monitor and maintain EDI system and operations 24x7x365

The traditional EDI implementation scenario is represented in these 14 steps. It is also typical, that as soon as one department begins to implement EDI or B2B data exchanges, then 11 other departments suddenly MUST have it. EDI is often required in the following areas:

• Supply Chain (SAP SNC, SRM, etc)
• Transportation Management (TM and Inbound and outbound Logistics)
• Procurement
• Inventory and Warehouse Management
• Production Planning
• Manufacturing Execution
• Sales Order Management
• HR Benefits (insurance, 401k, etc.)
• Global Trade Services
• Financial Supply Chain
• Treasury (electronic funds transfers, etc)
• Much, much more...

Each of these departments have their own high priority trading partners and business deliverables that are suddenly reliant on the EDI department to on-board all of their key trading partners immediately.
An additional challenge, many departments are asking for support of different EDI and B2B standards. Treasury wants electronic banking messages, the supply chain wants XML B2B standards, customers want traditional EDI, small customers can only send flat files, etc.

The EDI department now has a "combinatorial explosion" to manage. The traditional approach to this problem is to throw more IT budget, software, hardware, contractors and FTEs at the problem, but that doesn't always go over well with the CFO these days.

SAP is uniquely positioned to be able to solve many of these traditional and expensive EDI challenges for their entire SAP customer base. They have studied where efficiencies, cost savings and economies of scale could be gained, and after much work and research they announced they had invested in and become a co-owner of an EDI and B2B exchange called Crossgate. This exchange operates on the SAP NetWeaver platform and utilizes SAP technologies to simplify EDI and B2B for SAP users. It does not require the large investment of time and money represented by the 14 steps above. It requires a simple plug-in using SAP-to-SAP connectivity to an SAP-centric exchange.

Crossgate's use of canonical data models at the hub, powerful software tools that enable rapid alignment of complex data formats across thousands of trading partners provide efficiencies never possible before. All companies connected to the exchange can now reuse the maps and connections to over 40,000 other companies (this number grows daily).

With SAP's recent investment, there are now multiple joint development projects between SAP and Crossgate to continue on this path towards Business Network Transformation, a phrase used often by SAP CEO Leo Apotheker. This phrase describes the concept of taking a macro-view of all SAP users, and looking for efficiencies that SAP can introduce across their entire customer base. This can also be called a network view. A network view looks at services that can be performed that add value to the entire network or customer base. Often these network-centric services (e.g. EDI/B2B) can be provided in a cloud computing environment, on SAP technology, and integrated with all SAP users through pre-defined enterprise services. A method of extending eSOA outside the four walls of the enterprise.

If you would like to discuss any of these ideas, concepts or solutions in more detail please email me.

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http://b2b-bpo.blogspot.com/
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