It's not a matter of if XML will overtake EDI as the preferred data exchange medium for B2B transactions, but when.
Roger Frauman, who ran Unix International in this region in the early 1990s, was something of a zealot when it came to open systems. The common perception then was that open systems offered application portability and machine independence. Roger's view was that it would give users true ownership of their data and freedom from hardware and software vendor lock in.
At the time all most users wanted was cost-effective computing. In recent years the concept of data independence has become something of a Holy Grail. Effective e-business requires different applications in separate organisations to integrate for the exchange of data. This requires some mechanism that can identify the meaning of data regardless of the application in which it is based.
The great hope in this area is XML, an evolving standard that provides rules for defining data in Web documents. An XML document packages the data so it can be accessed by anything from a spreadsheet to an accounts receivable application. Nevertheless, the concept is still embryonic. Worldwide sales of XML products and services only accounted for $90 million in 1999.
EDI has been the preferred method businesses have utilised to exchange data. However, this has been fairly expensive and difficult to implement, requiring significant investments in hardware and hefty per-transaction fees. Perhaps not surprisingly a study by Zona Research in the US highlights a growing trend to convert EDI systems to XML. Of the 72 per cent of respondents using EDI seven out of eight plan to convert EDI to XML at some point in time.
The same research identified the primary reasons organisations planned to use XML. The dominant reason given was "search"; that is, XML allows a user to get to data that may previously have been out of bounds. Moreover, XML allows searches across structured data in databases and unstructured data that may be contained in documents. The next most important benefit CIOs saw in XML was that once converted into XML, data was readily accessible by other applications. The final benefit was that CIOs believed XML speeded up application development because it eliminates the coding required to handle complex data conversions. This is particularly important in the e-business arena where data might be gathered from multiple disparate applications.
These advantages are clearly attracting CIOs. Research by CIO (US) last year identified a significant uptake in XML usage. However the market is still very small, especially in this part of the world. It is clear that many organisations are reluctant to use a standard that is still being refined. The challenge seems to be that there are a mass of competing organisations, most with their own agendas, who are engaged in this refinement process for XML.
For those of us who remember the Unix debates between OSF and UI this does have an element of dA©jA vu. Still, I suspect XML, even if it is not the Holy Grail, will take us a good way towards true open systems envisaged by Roger all those years ago.
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