CHANNEL-WIDE EC ON THE NET DEVELOPMENTS
Setting up and maintaining e-catalogs affordably and doing "Electronic Commerce Over the Net" (ECON) in business-to-business channels canít happen until end-to-end web standards and processes are adopted. Thanks to the use of eXtensible Markup Language (XML) and the June 10, 1999 announcement of Rosettanetís pilot tests, the odds for ECON happening much sooner within all distribution channels just got much better. To see this wave and position ourselves to catch it, some quick paddling will be necessary.
Whatís XML? Itís a markup language for the Internet that allows for the tagging of electronic information with identification codes. It will allow for fantastic improvements in doing web searches as well as for the creation and use of industry business transaction standards called "schema." XML-enabled ECON is faster, easier, cheaper and more flexible than traditional EDI transactions. We need to get a basic understanding of this breakthrough language.
Whatís Rosettanet? It is an independent consortium founded by 34 huge information technology firms with an original focus around the PC distribution channel. This entity has been using XML to build standard "words, dictionaries, grammar and partner interface processes (PIPs)" for doing ECON. While announcing a number of pilot tests for different PIPs on June 10th, the consortium also stayed committed to launching full-blown, everyday ECON on Feb. 2, 2000, which they call "eConcert Day." The combined sales of the consortium members exceeds $700 billion, the identified supply chain cost savings for all the PIPs exceeds $25 billion and the upside possibilities are huge. What they are doing will be bottled and offered to all other channels quickly.
What are the strategic rules of engagement for creating, maintaining and improving new digital infrastructures for channels? The same rules that applied while creating winner-take-all networks and standards like our - national railroad gauge, long distance telephone networks and the Wintel PC platform. The opportunities, the rules and right questions have been beautifully summarized in the book "Information Rules"; put it on the top of your summer reading pile!
Who will provide the leadership for each channelís standards? It depends. New channel standards canít happen without a critical mass of participants supporting and using the new order, especially important downstream customers. Remember when we were forced over the years to get an 800#, a fax machine and an email address because they offered compelling benefits and many business partners demanded it? The creators of the underlying standards for these examples didnít come from our distribution channel(s). For channel ECON will traditional manufacturers, distributors and associations coalesce around a best, "open" standard that will be continuously sustained and improved by a responsible, third party monopolist? Or, will one powerful player in the channel or outside third parties like Microsoftís "biztalk" bandwagon, which includes many e-MRO solution providers, create the de facto standard(s) that we will use?
Just as the railroad, electrical and telephone networks enabled the industrial revolution, ECON standards will enable the digital networked economy to unfold. Distribution channels havenít faced this type of opportunity in 150 years, but the solution will be decided in the next 1 to 3 years. Who will be the new channel architects? Who will learn to innovate in this new economy first and best?
Merrifield Consulting Group, Inc. Article # 8.9