Supplier Enablement

XML and EDI; or is that XML bye bye EDI?

EDI came first of that there is no dispute.

With the availability and increasing use of XML, is EDI threatened with obsolescence? NO.

Are businesses that use EDI also using XML. YES.

Are there businesses using EDI that plan to extend the use of EDI to all suppliers? Maybe (because we don't know), but doubtful. Let's assume NO.

So, we can be pretty certain the EDI and XML will co-exist. YES.

Also that XML will become dominant, as while EDI is well established it is not widespread in its use? This will provoke debate but XML is going to win out as the preferred way for most business (large and small) to exchange messages and documents electronically.

Consider that 99.3% of UK businesses employ less than 50 persons; how many do you suppose use EDI? We don't actually know the answer to that question because there is no data but it is fair to assume that it is a tiny tiny percentage and they will be mainly suppliers to major companies that have mandated the use of EDI such as major retailers and automotive industry.

The real growth will be XML as these businesses are introduced to electronic trading and the need to exchange electronic documents with their customers and suppliers.

Why XML not EDI?

The cost to implement XML is much smaller than the cost to implement EDI and this matters, particularly to the SME.

There are more businesses that can or will support XML than there are those that will support EDI and that we know from current projects that promote only the use of XML.

There is a telephone argument; if I buy this telephone how many people can I talk to? Only those people that have the same telephone as you - EDI. Everyone who has a telephone - XML. The choice is yours. This is a simplistic argument but also true.

In summary:

EDI is here to stay where it is already established.

Use of XML is growing rapidly.

The post, fax and use of e-mail to communicate messages and documents goes on but in many businesses is coming under review for eProcurement, eInvoicing and for the automation of Purchase to Pay.

The business issues that drive the debate:

COST, as businesses look for ways to reduce both the invoice price for bought goods and services and the cost to the business for 'procurement'.

COMPLIANCE, the new word casting a shadow over business and in our context it means tighter controls over what we spend and whom we spend it with.

CONTROLS, as a quick look at the non-pay expenditure of an organisation or the cost of goods in a P&L will reveal the extent of money spent with suppliers. All that has to be accounted for and in pursuit of saving money (reducing costs) so more controls are being implemented.

For more information on these issues click here

posted by FrankB @ Monday, July 17, 2006