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EDI to E-commerce: Two Generations of Spending
December 15, 1998

The Pervasiveness of EDI The advent of RFC 1767 expanded EDI's reach to include those companies already comfortable with the Internet. However, these systems did not directly include the purchasing officials, and thus left an opening for the growth of HTTP-based e-commerce systems. The HTTP approach could support direct, personal interaction with the stock database and the shipping system, so EDI, which is essentially a commerce messaging system, was deemed superfluous by the newly enfranchised buyers and sellers. Now, in the e-commerce universe, we have two opposing camps, and that's both unnecessary and bad for business.

For the most part, the media only focuses attention on flashy applications--the tip of the iceberg. New catalog systems for consumer and corporate purchasing agents are coming online daily. Each one is slightly different, and the effort required to make purchases seems to be increasing; the complexity appears to be moving from the seller to the buyer. An actual reduction in purchasing costs doesn't seem apparent yet, either.

For corporate buyers there are some activities afoot that could have a significant impact in the next year. Most notably, the AIAG (Automotive Industry Action Group) is entering the testing phase of its "Guidelines for Electronic Commerce Message Routing on TCP/IP Network" (www.aiag.org/pub, follow the EDI link and see document E5), which uses a multipart MIME containing the 1767 EDI part. Systems participating in the test are not only large mainframes but NT-based EDI systems that small businesses can afford to operate.

There is more to this than a simple move of EDI from private networks to IP networks. EDI is coming into mainstream purchasing practices. Consider the concept of the "regular customer": If a purchaser establishes a business relationship, the seller can set up a trading partner "profile," detailing the sort of products the supplier might provide. Once this is done, and the customer has a purchasing requirement, the customer can either send EDI RFQs (request for quotes) to the appropriate suppliers, or send a request for an EDI parts/price list for local perusal. Such a purchaser-business model can apply to buying copier paper and pencils for the office, stocking the house with Kleenex, or finding a new DVD drive for the home computer.

Perhaps e-commerce is ready to come of age. But we must remember old lessons learned and move as much commerce activity below the waterline as possible. The purchaser should not get involved with the transfer of commerce data. And ad hoc purchasing is the exception, not the rule. Everyone wants repeat business--it's more cost-effective for the seller and consumes less energy for the buyer. Who knows? We may actually achieve truly effective e-commerce before the new millennium begins.

Robert Moskowitz is a senior technical director at the International Computer Security Association; he is also a member of the Internet Architecture Board. Send your comments on this column to him at rgm@htt-consult.com.


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