Despite Reservations, Internet EDI is Inevitable

Internet-based EDI continues to move forward, particularly with the help of CommerceNet (Palo Alto, Calif.), an Internet commerce industry consortium that recently announced the successful completion of its second round of Secure EDI interoperability testing.

The goal of CommerceNet’s testing program is to accelerate the development of secure, interoperable Internet-enabled EDI products. The testing is based on the EDI-INT standard formulated by CommerceNet.

Of the six EDI vendors who participated in the testing, two – Harbinger Corp. and Sterling Commerce Inc. – develop a number of products and services for the AS/400 market. Harbinger (Atlanta) tested its TrustedLink Templar (V4.0), while Sterling Commerce (Columbus, Ohio) tested its ASAMM 1.0 Communications Module for Commerce:Exchange. Other vendors included Compaq’s Tandem Division, Cyclone Software, Netscape and SAA Consultants.

Will Internet-enabled EDI eventually replace or surpass the more established value-added network (VAN) approach to exchanging documents? Many industry experts and users remain cautious about the potential of this application. "VAN charges are only too expensive when everything is going well," remarks the EDI manager for a West Coast manufacturer that has had an AS/400-based EDI network in place for several years. "When things start going wrong, the VANs really start earning their money with the backups and procedures they have in place. If we lose a customer’s order, we can go back to the VAN without embarrassing ourselves in front of the customer."

Even vendors at the forefront of Internet EDI testing acknowledge there are still kinks that need to be ironed out of Internet EDI. "The VAN infrastructure still has a lot of value, especially for building, managing and serving commerce communities," says David Winkler, director of product management for Sterling Commerce. "The Internet itself is not reliable. There are problems in transmitting critical data. The biggest issue in Internet EDI isn’t security – it’s reliability and throughput."

Winkler does see a role for Web-based EDI in reaching smaller companies, and even a blending of traditional EDI networks with the Internet. Internet EDI offers a means by which smaller companies can quickly and affordably link up with larger customers. A report from Forrester Research (Cambridge, Mass.) finds 57 percent of Fortune 500 companies have already implemented Internet EDI capabilities.

Wal-Mart Stores Inc. (Bentonville, Ark.) recently implemented Harbinger’s TrustedLink Express software to provide links to smaller vendors that do not have EDI translation software. "We have several thousand suppliers who are not EDI capable, usually because they are smaller companies or do not conduct a large volume of business with us," says Randy Salley, director of application development for Wal-Mart. The retailer is making copies of TrustedLink client software available to vendors at no cost, enabling them to receive purchase orders and send back invoices via the Internet.

Extol Inc., a Franklin Lakes, N.J.-based developer of EDI integration solutions, sees a mix of VANs, dial-up access and Internet EDI among its customers. Security is a concern, notes Dennis Bonagura, VP of marketing, but "as long as you have the right tools in place, you can adequately work within the Internet’s confines."

The major roadblock to Internet EDI at this time is concern about sending sensitive data over the Internet, says David C. Darnell, president of SysTrends, Inc. (Chandler, Ariz.). "The success of EC/EDI on the Internet will depend on security and encryption technologies," he says. A solution that combines the best of both the Internet and VAN worlds are virtual private networks (VPN), which use both Internet and security technologies.

Indeed, EDI over the Internet will only grow, particularly since "there’s now a tremendous focus on supply chain management," says Andrew Whinston, director of the Center for Research in Electronic Commerce at the University of Texas at Austin. "EDI in its traditional form plays a role in automating, creating electronic documents that are sent over a private network. People now want to do a whole series of things – negotiation, vendor-managed inventory, real-time information exchange, as well as traditional EDI."

Harbinger sees "a growing number of midrange customers with requirements for secure Internet document exchange," says Jim Travers, president and general manager of Harbinger’s Software Solutions Division. Driving this demand is "the CommerceNet-backed EDI-INT standard, which addresses the interoperability issues that may have limited Internet EDI growth in the past." Many companies are "becoming more comfortable with business-to-business Internet applications that use strong encryption to protect their data."

At this point, many VAN EDI suppliers have integrated the Internet into their operations and services anyway, Whinston says. "Traditional networks are just too expensive compared to Internet prices. They’d rather use cryptographic protection. The idea of very special formatting of EDI documents is going to fall by the wayside. EDI is history."