EDI eCommerce and Network Infrastructures An Overview Alan Howard August 2002

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EDIeCommerce and Network InfrastructuresAn
OverviewAlan HowardAugust 2002 
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EDI - Definitions

• Paperless Trading
• The transfer of structured data, by agreed
  message standards, from one computer system to
  another
• The Business to Business transfer of structured
  data, by agreed message standards, from one
  computer system to another

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BUSINESS INFORMATION FLOW
Customer
Government
Supplier
Individual
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EDI - Brief History

• Around in various forms for 30 years
• Prominence US and Europe in early eighties,
  Australia late eighties
• Early forms of EDI were often point to point
  using proprietary standards
• Very inefficient when trading partner
  relationships increased beyond a handful
• Development of standards - akin to a religion.
• Development of community networks
• Took off when large players saw a commercial
  advantage cost savings and efficiency

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Benefits of EDI

• Avoids re-keying of data (cost saving)
• Increases accuracy (cost saving) 
• Enables loosely coupled systems 
• Together with a VAN, Solves the point to
• point dilemma 
• Assists with the problem of many different
• proprietary systems communicating 
• Provides the basis for improved security
• JIT manufacturing (see supply chain)

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Hub and Spoke model

• Examples Retail, Automotive, TT 
• Examples GMH, Coles Myer, Big W,
• Health Industry, Customs, Etc
• Mandated versus Voluntary
•  Supply Chain

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COMMUNITY NETWORK MODEL
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Issues of Machine to Machine versus Human to
Machine EDI

• Traditional EDI - Machine to Machine (but also
  Person to machine)
• Internet/web - equated with Person to Machine
  (but easily adapted to M to M)
• Choice governed by where you get the most savings
  in the quickest time?
• Forms-based EDI
• The concept of 'Frictionless business
• The power of the computer network combination

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Standards development

• Various early standards (mainly European)
•  
• Converged to ANSI X.12 and EDIFACT 
• New era of XML, Web services, EbXML, BizTalk,
  cXML, Rosettanet and beyond.)

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Structured messages

• Not all beer and skittles have to do some work
• Headers/trailers/content
• UNB/UNZ, UNH/UNT, etc
• Compressed format

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UNA. UNBUNOB10605000001130206050000011302
000131132461 UNH6ENTRYD1 BEXNO RFF
TEST_at__at__at__at__at__at__at__at_ NADCNJOE BLOCKSSYDNEY NADLL
AFGH NADLIREUNION ISLAND NADLJ1A TR
DS CUXAUD DTM01101/02/00 UNSD LIT168041
000N1KGF0NR IMDMILLSTONES AND
GRINDSTONES FOR MILLING, GRINDING
O GINVB12121212NONE VALFO1AUD ALIBLX UNS
S GPD1CNT GPD1PKG GPD1BAT UNT206 UNZ
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Role of Value Added Network Providers

• VAN still alive and kicking..
• many to many solution 
• Trading Partner management 
• On Network translation (flat file to standard,
  standard to standard, etc) 
• Validation, Message tracking, Message re-sending 
• Differential billing 
• Negative and positive delivery notifications,
  error handling 
• Help Desk / Customer Care

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Community Network Example
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EDI Example - DOMESTIC TRANSPORT
Purchase Orders - Schedules
Dispatch Advice
R E C E I V E R
Instructions

S E N D E R
Transport Status
Advance Shipping Notice
TRANSPORT
Invoice
Remittance
Receiving Advice
Invoice
Remittance
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Acceptance of traditional EDI

• High volume - large organisations
• (20 of organisations 80 of volume)  
• Low volume
• (80 of organisations 20 of volume) 
• Difficult to expand into low vol organisations
  cost, effort, technical complexity
• New technologies (XML, Web Services, EbXML, etc)
  hailed as the answer
• It aint necessarily so..
• Web forms on the net a better short term bet for
  the 80
•  

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•  
• Will still need automated routing of different
  delivery options from hub to trading partners.
• EDI to Fax, EDI to Telex, FTP to SMTP, Legacy
  comms to IP, EDIFACT to ANSI, traditional EDI to
  XML, Different implementations of XML to each
  other, EDI to EBXML, even EDI to snail mail,
  etc.
•  
• Business process changes and integration still
  required to get the real benefits.
• Speed and cost of deployment still the major
  issue

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Business Process Changes required

• IT Strategy and Network Strategy (see part 2)
• E-commerce Strategy
• Quick wins
• De couple the solution
• Hybrids of new and old
• Dont get too hung up on choice of standards 
• Thoroughly understand Business Requirements 
• Implementation Plan

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Protocols

• Network 
• Legacy SNA, X.25, Bi Sync, async, OSI
• More recent TCP/IP
• File Transfer Protocols
• Legacy RJE, NJE, LU6.2, X.400, Kermit,
  XMODEM, etc, OSI 
• More recent FTP, SMTP (SMIME and AS2), UUCP,
  HTTP (HTTPS), MQ Series, etc,

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Further Promise of recent technologies

• Portals, Vortals and Chortles
• Web Brokers (automated)
•  Web Auctions
• Catalogs, Shopping malls
• Concepts of B2B, B2C, B2G, etc
• EDI or e-commerce it is always a business issue

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Enabling technologies

• GUI Transformation tools (drag and drop)
•  GUI Message Tracking
• Threaded documents
• Broadcast documents 
• Adapters to Database systems, ERP, etc 
• ODBC connectors

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Security Issues

• Security as part of the messaging standard (ie
  within EDIFACT, etc)  
• Security through add on software (PGP, PKI)
• Privacy and Non-repudiation
• Firewalls
• Security at the transport level (IPSEC) 
• Server based (SSL) 
• Network Authentication
• VPNs (see part 2)
• Sniffing, DOS attacks, etc

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Community Ramp up issues

• Business need identified and agreed through the
  community 
• Implications for internal Business practice,
  processes understood 
• Business Relationships bedded down 
• Decision on Message types and Message Standards 
• Message Mapping Guidelines generated 
• Integration into back-end systems

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Service Level requirements

• Mission Critical 
• High Availability 
• Response/ Throughput times 
• Guaranteed delivery (MQ Series, etc)

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The Supply Chain

• Flow of material, information, money, etc. from
  raw material suppliers through factories to
  customers

• done well, it demands integration of the business
  processes along the chain, planning, organising,
  control of many activities
• RFQ
• Quote
• Purchase Order
• Warehousing
• Packaging (barcode)
• Delivery Docket
• Invoice
• etc.

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components of the supply chain
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Supply Chain Components

• Upstream like placing orders
• Suppliers, their suppliers (several tiers)
• From raw material to the company
• Internal all internal processes that add value,
  conversion to find products
• Production scheduling
• Costing
• Inventory control

• Downstream all activities in distribution and
  delivery to end customers
• Sales
• Customer billing
• Delivery scheduling

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Typical Problems Alongthe Supply Chain

• Delays in production, distribution, etc.
• Expensive Inventories
• Uncertainties in deliveries
• Poor demand forecast
• Interference with production
• Each company may well be a member of several
  supply chains
• International barriers - tariffs, taxes, customs
  processes

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Supply Chain Management

• seeks to reduce uncertainty, risk, delays and
  costs along the chain
• Integration of the business processes. Planning,
  Organizing, control of many activities
  Purchasing, delivery, packaging, checking,
  warehousing, etc
• positively affect
• inventory levels
• cycle time
• processes
• customer service
• thereby increase
• profitability
• competitiveness

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where does e business fit in?

• E-b can solve (or at least ameliorate) some of
  the classic supply chain problems
• direct orders
• Just In Time manufacturing
• Reduced inventory
• Timely information flows
• accuracy
• internet tools (e.g. Web Forms) make electronic
  interaction easier (80/20)
• B2B hubs make EDI-like systems more accessible
• Electronic payments

• curiously, e-c can also introduce new problems in
  otherwise quite good supply chains
• competing / overlapping systems
• bolt-on online sales strategies
• unexpected order increases
• go direct might reveal weaknesses in processes
  and that channel partners were doing something
  useful, after all

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Software Support
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Web Services Standards

• SOAP, WSDL and UDDI
• SOAP
• SOAP Envelope
• SOAP header
• - SOAP header block
• - SOAP header block
• SOAP body
• Message body

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• SOAP messages have an envelope, an optional
  header and a mandatory body
• The header information on how the body is to be
  processed eg
• - routing and delivery settings
• - security settings
• - transaction contexts
• The body the XML message may have any XML
  compliant content
• There are two types of SOAP messaging RPC- style
  and document-style
• - Document Style purchase order, tax refunds
  etc
• - RPC Style has method parameters and returns
  values in the
• messages
• Document-style SOAP will become more important as
  SOAP is used in B2B solutions in the future

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Network StrategiesBuilding Your Communications
Infrastructure
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Models of Ownership and Management of Networks/IT
Infrastructure

• Privately owned and managed
• Outsourced ownership and Management
• Hybrids
• Advantages and Disadvantages
• Mitigation strategies

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Advantages of Outsourcing

• Can compare costs and quality of a range of
  providers
• Can define service levels and contract them
  with penalties
• Can limit staff involvement to specifying the
  business problem
• Can reduce staff and other overheads
• Can more easily keep up with the latest
  technology
• Can budget with more accuracy on costs

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Disadvantages of Outsourcing

• In house knowledge withers away
• Become dependent on supplier when changes
  required
• Need skills to refute/debate supplier
  explanations of outages
• Supplier can increase charges once client is
  locked in
• Supplier can gradually reduce quality

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Mitigation Strategies

• Retain and promote key staff
• Ensure tight detailed contracts
• Choose reputable supplier (someone big enough to
  sue)
• Be prepared to re tender if unsatisfied
• Ensure time frames are agreed in advance

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Outsource AgreementsMain Points to Look For

• Strong Change Control and upgrade/variation
  clauses
• Comprehensive termination clauses covering
  transition issues
• Service Level Agreements (SLAs)
• Penalty Clauses and dispute resolution
• Outage control and escalation procedures
• Reporting requirements

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Important Inclusions in the Service Level
Agreement

• Availability eg 99.97, 24 x 7
• Transaction response times eg 99.8 take 2
  seconds or less
• Bandwidth minimums eg CIR, MIR, etc
• Network ping times eg 70 milliseconds local,
  200 ms overseas
• Help desk call responses eg respond by X fix by y
• Outage times and notice

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Data Centre Requirements

• Telehousing facilities have advantages in
  network connectivity
• Equipment powered via UPS systems connected to
  Diesel Generators
• Equipment in a dedicated locked area
• High security personal access systems
• Regular backups to off site storage
• Disaster Recovery provisions
• Dual feed from power and telco grids

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Infrastructure BuildProcess Requirements

• Initial design, planning, ball park costing and
  peer review
• Initial Stakeholder review
• Detailed design, costings, deliverables and time
  frame
• Risk analysis (likelihood, severity, mitigations)
• Project plan (milestones, critical path,
  contingencies)
• Acceptance criteria, acceptance test plan
• Final Stakeholder review and signoff

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Network Types

• Local and Wide Area Networks (LANs and WANs)
• Private Networks
• Virtual Private Network (VPN)
• Dial Networks including Virtual Private dial
  Networks (VPDNs)
• Broadband Networks
• The concept of the Backbone network

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Technologies to Build these Networks

• Point to Point lines
• Frame Relay (FR)
• TCP/IP tunneling
• MPLS
• Asynchronous Transfer Mode (ATM)

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Point to Point NetworksThe concept of Tail
Circuit

• Digital Lines (DDS Fastway, DMS, DAR, etc)
• Integrated Service Digital Network (ISDN)
• Digital Subscriber Line (ADSL, HDSL, SDSL, etc
• Fibre (I thought that lit was what you were
  after a few good reds)
• Cable

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Frame Relay (FR)

• Lower cost than point to point
• Shared infrastructure
• Committed Information Rate (CIR) and Bursting
• Requires tails to connect to the backbone
• Reduces expense, particularly where traffic loads
• are uneven

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TCP/IP tunneling

• Lower cost than FR and Point to Point
• Routers and Filter Lists
• Over the Public Net or a Private Backbone
• Reliability and security issues
• IPSEC and Firewalls