Wednesday, September 30, 2009

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.

Author Kevin Benedict
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 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.

Author Kevin Benedict
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.

Tuesday, September 29, 2009

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.

Author Kevin Benedict
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.

Friday, September 25, 2009

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.

Author Kevin Benedict
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.

Thursday, September 24, 2009

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.

Author Kevin Benedict
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.

Tuesday, September 22, 2009

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.

Author Kevin Benedict

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:

Author Kevin Benedict

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.

Author Kevin Benedict  

Monday, September 14, 2009

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 -

• SAP EDI Changes -

• SAP Invests in Crossgate -

• SAP’s New Approach to EDI-

• SAP-centric EDI -  

• SAP NetWeaver PI Approach to EDI -

• EDI & B2B Managed Services -

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

Author Kevin Benedict  

Friday, September 11, 2009

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.

Author Kevin Benedict 

Wednesday, September 9, 2009

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.

Author Kevin Benedict

Tuesday, September 8, 2009

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.

Author Kevin Benedict

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.
Author Kevin Benedict

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.

Wednesday, September 2, 2009

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.