BUSINESS-TO-BUSINESS INTEGRATION:
THE INTERNET'S NEXT BIG STEP
How XML and E-services are Radically Changing
The Way Businesses Use The Internet
In the highly connected world of e-business, corporate success will hinge on how well businesses are able to collaborate with other businesses. Market pressures—including time to market, market efficiencies, and rapidly emerging new business models—will reward those companies that are able to create, and automate, tightly integrated business processes. The Internet is the key to effecting these inter-business application collaborations.
Over the past five years, the Internet has quickly evolved from a browser-based information tool to a business-to-consumer (B2C) e-commerce enabler. Now the Internet is entering its third and most important wave, business-to-business integration (B2Bi). This wave offers significant potential that can be realized only when organizations achieve deep integration across firewalls, seamlessly integrating supply chain processes deep inside one company with those inside another.
As businesses move into the third wave of the Internet (B2Bi), the World Wide Web begins to look more and more like an old technology whose day has come and gone. The new age of the Internet is all about integrating businesses electronically, rather than about HTML and browsers. In this wave, as in earlier waves, companies are faced with the opportunity of distinguishing themselves as leaders in the industry, and with the threat of falling quickly behind their competition. Companies that move decisively into the B2Bi era will, in all likelihood, be paving their way to long-term survival and success.
Forrester Research, a leading information industry analyst organization, predicts that business-to-business (B2B) electronic commerce via the Internet will soar in volume more than tenfold, rocketing from $109 million in 1999 to $1.3 trillion in 2003, far
The Challenge of True Inter-Business Process Automation
Organizations today have a substantial investment in their information systems and packaged applications, such as inventory control and sales force automation. The landscape is one of disconnected and disparate information technology infrastructures—residing on different hardware platforms, and utilizing a variety of data methods and communications formats—that were never intended or designed to communicate externally with systems of other companies. To enable the emerging B2Bi business model, isolated systems and applications must be integrated not only within an enterprise, but also externally with strategic partners and customers.
One example of how this challenge is playing out can be seen in organizations that are integrating their inventory and order management systems with external purchasing systems, thereby automating an inter-business purchasing process. This form of collaboration, often referred to as a multi-merchant exchange, can be accomplished by a hybrid of custom system integration and manual-and/or document-based integration. But to achieve maximum efficiency the entire inter-business process needs to be automated.
Furthermore, the process automation must be dynamic and responsive to changing business needs. Imagine the problems involved in just getting two companies' systems to integrate seamlessly. It might be difficult to see how this could be accomplished when multiple companies are involved, and when collaborations must be sufficiently fluid to accommodate changing market demands.
What is needed is a way for companies to make their business processes and information available for collaborations in a totally neutral way. For instance, a company that has implemented a package shipping system on a mainframe computer, using CICS and DB/2, would be able to "publish" these transactions as business process objects. Then, any of their partners that needed to incorporate these transaction services into a new inter-business process could do so—even though the new Internet-centered business process was implemented in Java or any other application environment. If the mechanism that allowed this to happen could ensure that the transaction services (or processes, or data, or any electronically accessible corporate assets) were usable regardless of the application environment of the new inter-business process, the first barrier to true Inter-Business Application Integration would be significantly lowered. If it didn't matter what kind of system the information was stored in, or that all the potential partners had different IT infrastructures, the door to tightly integrated B2B collaboration would swing open. At the same time, such a solution requires an evolutionary leap in how we look at business process automation.
The Challenge of Internet-Based Inter-Business Interoperability
Traditional approaches to B2Bi have been unable to adequately address the challenges of integrating multiple customers, suppliers, and other strategic partners. These approaches include in-house custom development software solutions and electronic data interchange (EDI) software. In-house solutions are frequently point-to-point integration solutions based on closed or proprietary standards. They generally lack the flexibility and scalability that are necessary in today's dynamic B2B environment. These custom solutions also often require extremely long development lead times and are very difficult to replicate and update. As a result, development and maintenance of in-house integration solutions require large, expensive information technology staffs.
EDI, on the other hand, represented the first approach to achieving B2B integration without incurring many of the issues associated with developing and maintaining customized, in-house solutions. Unfortunately, the benefits of EDI have been limited to large organizations because of the costs involved. More importantly, because EDI is based on point-to-point integration and pre-defined, fixed data formats, it frequently lacks real-time data exchange, the ability to quickly respond to business changes, and scalability to large numbers of users.
Business-to-business solutions now require flexibility that is unachievable via custom development. They require open interoperability between widely disparate systems, which is unavailable via EDI. And they require extensible data exchange, which is not supported under either EDI or custom constraints.
Inter-Business Data Exchange
When collaboration between businesses is constrained to a limited number of parties or when all the parties' collaborations are within a specific domain or vertical industry—for example, automotive manufacturing—the issue of how to agree on data semantics (i.e., what an "invoice" means) can be fairly easily resolved. In fact, EDI did just that, to some degree. When the number of parties grows significantly and starts to cross domain boundaries, data exchange at a business semantic level becomes very problematic.
XML (eXtensible Markup Language) has emerged as a way to simplify this problem. XML offers a way to "self-describe" data, so that information providers can readily specify the semantics of the encapsulated data in a form that the receiver of the data can easily interpret. This doesn't preclude the work of building translation or mapping between data specifications, but at least a common approach can be adopted by anyone wishing to exchange data.
Business-to-business solutions for the Internet, therefore, should implement a strong XML framework for business data exchange. Many vertical-industry trade associations are now developing XML and business vocabularies to help standardize the way companies represent information. As standardization advances, the business-to-business architecture chosen should incorporate these standards as a way of making B2Bi feasible without the massive capital expenditures and limitations of in-house custom integration and EDI.
Inter-Business Infrastructure
Encapsulation and open translation of business data address a part of the B2Bi problem, but in itself, XML translation will only deliver a part of the potential value that can be derived from tight business-to-business integration. If XML is coupled with business process or transaction abstraction that allows companies to freely integrate disparate business systems across the Internet, then true business-to-business collaboration can be enabled without the requirement that a business make any changes to existing systems.
What would this look like? If your company identified a number of business transactions (implemented, let us say, as CORBA objects) as candidates to participate in an inter-business process, and if these processes could be published in a neutral way, and if other partners in the business collaboration could integrate these business processes with their business transactions (even though their transactions were implemented in DCOM, rather than CORBA) without either party knowing how their respective transactions were implemented, then open, flexible inter-business process design and automation could be accomplished very rapidly. The issue of how to describe these distinct and obviously very different processes to one another could be readily handled by the use of XML and the interfaces (how the business processes are to be invoked, the parameters and result sets). Further, tying together the XML-based description of the data with the XML-based description of the process that utilizes that same data creates a complete business-to-business integration solution.
Creating an environment that can support this degree of business-to-business integration requires an infrastructure approach that would free the inter-business process designer from concern with how respective business process elements were constructed. Additionally, the infrastructure would need to provide a robust, scalable, secure transaction and data integrity layer if inter-business solutions are to be reliable, flexible, and manageable.
Third-Phase B2Bi Solutions and Benefits
The technology has now been developed to provide that secure, scalable transaction layer, and to make deep integration a practical reality for all companies. Today's technologies provide a significantly more advanced solution for the problem of integrating systems than in-house or EDI approaches, greatly reducing the time required to implement a B2Bi solution.
B2Bi solutions today are made up of the latest in Internet technology, including XML, portal technology, Internet communications standards, firewall tunneling software, and advanced security systems. These advanced technologies allow implementations of B2Bi solutions that are secure, scalable, and able to exchange information not just between internal systems but, more importantly, between businesses.
The technology has now advanced to the point at which most organizations can immediately implement comprehensive and cost-effective B2Bi solutions that enable real-time communications among customers, suppliers, and other partners. The means are available to facilitate the transition to Internet-based business models, allowing businesses to pursue new revenue opportunities and realize significant cost savings. Software solutions have been developed to provide the flexibility and scalability to adjust to dynamic business needs and allow organizations to offer to their customers and business partners the ability to exchange information and conduct real-time transactions, regardless of their installed technology infrastructure.
Each business will have choices of becoming a provider or consumer of services. Corporations will have opportunities to generate new revenue streams and new business models by using existing software assets and integrating them with other businesses. Valuable efficiency gains are waiting for those corporations that realize that deep business process integration with their partners and customers is not only possible, but will also confer a significant competitive advantage.
Without significant new investments, companies can now execute procurement strategies that focus on close collaboration with preferred suppliers. For example, deep integration can improve supply chain management by integrating the procurement, order processing, inventory management, shipping and fulfillment systems, and enterprise resource planning (ERP) systems of companies doing business together. Inventory can be automatically replenished, orders can be processed faster and more accurately, components can be shipped sooner, and customer queries can be addressed more rapidly. Results include shortened cycle times, lower inventories, and reduced error rates.
Further, corporations that adopt B2Bi software gain independence from suppliers who distribute services because B2Bi software allows service providers to be quickly removed or interchanged, enabling a business to switch to a different preferred supplier more swiftly and smoothly than has ever been possible, without disrupting processes or requiring retraining. As a result, B2Bi software increases the overall efficiency of entire markets by providing a two-edged sword: (1) compelling benefits for both suppliers and customers as long as competitive quality, service and cost are maintained, and (2) the ability to create new, process-integrated supplier/customer relationships literally overnight if competitive quality, service, and cost are not maintained.
Here, in a nutshell, is how Internet-based B2B integration has advanced:
Old Web Technology
New B2Bi Technology
Static content
Dynamic, service-based content
HTML links
XML & Services
Browser/Text clients
Full electronic access
Consumer-oriented
Business-oriented
Poorly integrated
Highly integrated
Single business-oriented
Multi-business oriented
OpenBusiness Solutions
The mission of ObjectSpace is to deliver a comprehensive solution that provides you with the flexibility and scalability to adjust to dynamic business needs, and that allows you to offer to your customers and business partners the ability to exchange information and to conduct real-time transactions, regardless of their installed technology infrastructure.
Our OpenBusiness™ software products free trading participants from the need to deploy and maintain extensive B2Bi software infrastructures. OpenBusiness abstracts major portions of B2Bi infrastructure and functionality to the Internet, where information and processes can be transparently and securely shared by all participants.
The next phase of the Internet is here, and ObjectSpace OpenBusiness B2B solutions are designed to enable you to reap the benefits.
ObjectSpace, Inc.
14850 Quorum Drive, Suite 500
Dallas, Texas 75240 USA
Phone: 972.726.4100
Toll Free:1.800.OBJECT.1
Fax: 972.726.4200
