Don't gamble with your choice of standards

Sooner or later, virtually every company will find itself engaged in some form of e-commerce, and doing so will require adherence to one or more standards for passing data between business partners.

Many vendors—including suppliers of ERP, supply chain management, and other applications typically used by manufacturers and distributors—claim that documents or data generated in their applications already conform to e-business standards.

While most of those claims are true, users still must ensure their applications conform to the right standards for their particular business. Failure to confirm the appropriateness of a given e-business standard amounts to a major gamble that could take a considerable amount of time and money to recover from. It also could conceivably lead to the loss of customers.

"Companies are in effect playing what amounts to standards roulette," says Frank Lin, director of professional services for Drake Certivo, a Newport Beach, Calif.-based consulting firm that specializes in helping companies resolve e-business issues.

Selecting the proper standards has become a gamble partly because of the widespread belief that XML, or eXtensible markup language, is the primary standard for e-business communication. XML is, indeed, the most widely used e-business standard, but there are multiple versions of XML.

In general, the different versions of XML have been created by and for groups of companies in a particular industry. For instance, the RosettaNet standard is a form of XML used primarily by high-tech manufacturers. The chemical and petroleum industries have their own versions of XML, known as CIDX and PIDX, respectively. Even the human resources field has a version of the standard known as HRXML.

Lin says all this makes it important for companies to have a strategy for screening applications for their adherence to the proper standards. The strategy should include identifying the business reasons for moving to an e-business model and letting those reasons, not technology, drive the choice of both applications and standards.

At the same time, any specifications embedded in an application should, at the very least, conform to standards for your industry.

Lin also advises small and medium-size companies to learn what standards their larger customers, also known as the supply chain gorillas, are using. "In most cases," he says, "the gorillas are going to make the rules."

There is some good news for companies that may be confused by all this, Lin adds. For instance, recent mergers by standards bodies such as RosettaNet and the Uniform Code Council indicate that standards are beginning to converge, which could make the selection process easier for users.