Monday, June 7, 2010

EDI, Transactional Content Management and Social Networking

Several recent events in the business world are rapidly changing the way businesses communicate and exchange electronic data.

  1. SAP (a large ERP vendor) announced it will offer its own "business ready network" entitled SAP Information Interchange by Crossgate, which will support EDI and other B2B e-commerce exchanges for SAP users.
  2. GXS (the world's largest EDI provider) announced its intent to acquire Inovis (another of the world's largest - top five EDI providers).
  3. IBM announced its intent to acquire Sterling Commerce (the world's second largest EDI provider).
Why are all these events happening now?  I have some thoughts.

GXS, Inovis and Sterling Commerce are all EDI companies that are rapidly innovating and setting up business networks. They recognize the impact that the social media revolution is having on businesses. They realize the power of social networks and can see that it will change the way traditional businesses have operated and communicated.

Business networks are EDI/B2B e-commerce hubs that enable companies to efficiently exchange business documents. Business networks are similar in some ways to LinkedIn and Facebook. Companies can join and set up a profile and then search for their customers, suppliers and service providers and easily connect with them and begin exchanging messages using electronic data interchanges. How is this different than in the past?

In the past, if company A wanted to exchange EDI messages with company B, it would have to call company B and negotiate data requirements and data formats. It was often a complex and time consuming effort each time you wanted to connect with a new partner. Business networks let you join the network and simply ask permission to connect. The data formats and data requirements are all handled by the business network (hub).

What do business networks have to do with transactional content management (TCM)?  First let's understand TCM.  TCM refers to business documents (paper or electronic) that are moved through a business process.  An invoice that comes into a company and is scanned, validated and routed through an automated approval process is a good example.  BancTec has two solutions for this purpose.  One is CenterVision for operating digital mailrooms and the other is AP Master for managing invoices.

EDI and B2B data exchanges are part of the transactional content management's chain of custody. Data can originate at a customer or supplier and travel through the business network (via the EDI hub) into a company's internal transactional content management system. Invoices are an example of a business document that originates at a supplier and must be received, processed, approved and paid. The efficient flow of external business data between businesses, and then internally using transactional content management solutions enables near real-time processing and end-to-end visibility of transactional data. In these environments many areas of latency are removed from the business process.

The impact of business networks and social media on large enterprises is just starting to be understood. The implications are enormous and will be interesting to watch.

Author: Kevin Benedict CEO/Founder Netcentric Strategies LLC
SAP Mentor, SAP Top Contributor
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

1 comment:

  1. Intersting article. Covers some great points on b2b data management and maintenance.