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Traditional EDI/B2B strategies, methodologies and systems are quickly on their way out for SAP users in 2009. Why? A huge amount of the complexity that traditional EDI environments required will be removed by SAP. SAP users will be able to re-think and reallocate many of the resources and budgets that have been assigned to supporting EDI and B2B related integration projects in the past. What is making this revolution possible? A maturing group of standards that are being brought together in SAP’s Netweaver PI and the Enterprise Services Repository and Registry to hide and eliminate the traditional complexity involved in the implementation of B2B/EDI and integration projects. Here is a list of a few of the standards involved:

  • UDDI
  • WSDL
  • Web Services
  • Enterprise Services Repositories and Registries
  • Executable Business Processes (BPEL)
  • Global Data Types (GDTs)
  • Service Oriented Architecture (SOA)

For decades SAP has been focused on developing business solutions that work together to form one large homogeneous ERP solution. Much of this goal has been accomplished and they now seem to be focusing significant amounts of attention on the next frontier – making one large homogeneous “business network.” This involves making it easier for their solutions to speak to the world. SAP solutions are fueled by business data. SAP solutions both produce and consume business data. The data required is not all self-generated. Much of the business data is produced by external business network participants (trading partners) in the form of Purchase Orders and Invoices (These are just two examples of thousands of different business documents that are exchanged between business network participants).

Over the last decade we have all witnessed the transformation of SAP solutions from many disparate components, to an integrated system based upon a defined set of standards and technologies (e.g. SOA). The process of transforming a trading partner community into a homogeneous business network will follow a similar path. Utilize a defined set of standards and technologies and organize them in a manner that can be cost effectively implemented in a reliable and seamless manner.

The obstacle to a homogeneous business network in the past was a lack of defined standards, strategies and methodologies for bringing it all together – chaos reigned! The Enterprise Application Integration (EAI) market thrived for many years on chaos. The lack of standardized integration strategies and technologies provided an opportunity for third party EAI software vendors to introduce different integration standards and strategies into IT environments that lacked them. This is very similar to the EDI translator software industry. They thrive on chaos, but won’t survive, in their present form, if companies like SAP bring order to the chaos. SAP appears to be investing significant resources to bringing order to EDI/B2B in 2009.

EDI traditionally involved the following:

  • Understand what business data needs to be exchanged with a particular business partner
  • Determine how it can be sent and received
  • Find an EDI standard that is a close match
  • Document the EDI standard and subset of the standard that will be used
  • Find out where the data is stored (business application database)
  • Develop a strategy for exporting and importing the data from the database
  • Decide on a communication protocol for sending and receiving
  • Automate the process
  • Test, Test, Test
  • Start over again with the next business partner and business document exchange

This is about as inefficient as one could possibly make it. From SAP’s central and influential position, they can pre-define and standardize most of these steps and greatly simplify implementations. It will be fascinating to watch this evolve in the Enterprise Services Repository and Netweaver PI environments. Once EDI messages and processes are pre-defined as services, they can be available without big and expensive integration efforts and multi-year EDI implementations.

If most EDI and B2B processes become pre-defined services in SAP, the workload for traditional EDI departments and IT developers involved in integration projects will be significantly reduced. EDI departments will no longer be spending significant amounts of time on integration projects, but rather on supporting the data format needs of external business partners. This is not a core strength or competitive advantage kind of effort. It is simply matching and supporting data formats and their semantics and syntaxes. I expect companies will look to outsource this remaining work to specialized managed services companies that focus on aligning data formats for entire business networks where economies of scale and efficiencies can be achieved.

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2 Comments

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  1. Former Member
    Kevin,
    While it is a welcome development to see the direction being taken by SAP (as far as communication with the external-world is concerned), there still exists a business space for a player who specializes in Managed-communication services, to offer these  organizations using SAP.

    The EDI standards are closely mapped to the business definitions (or schemas) that require frequent updates due to evolving business or security-compliance needs. This is widely applicable in the travel-n-logistics industry where I come from.

    One should be looking at this space from a domain business perspective and not a technical-interface challenge.

    -Ashish

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  2. Former Member Post author
    I agree.  Companies should be able to focus on business process automation and optimization, and not have to spend large amounts of resources working out the EDI/B2B maps, custom formats and communication protocols for hundreds or thousands of partners.  The real competitive value and ROI is in the business process automation and optimization.
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