Posts Tagged ‘internet’

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EDI Over Internet or Through VANs: Where Best to Do B2B eCommerce?

Thursday, February 25th, 2010

Many businesses wrestle with the question of where best to exchange electronic documents (purchase orders, invoices, status, etc.) with their suppliers and customers. There are a variety of options, but basically it comes down to either using a 3rd-party Value Added Network (VAN) or directly connecting to trading partners using the internet. Originally businesses conducted Business-to-Business (B2B) eCommerce through Value Added Networks (VAN) using some form of Electronic Data Exchange (EDI). VANs are still a viable option, but B2B eCommerce has now expanded to the internet where trading partners exchange electronic documents directly in a variety of formats to include EDI / EDIFACT.

Considerations for Exchanging Electronic Documents over the Internet or Through VANs.

There are many factors to evaluate when deciding to use a VAN or use EDI over the Internet. Below are some key considerations.

  • Costs. VANs usually cost more and charge by the transaction. The more volume you have the less cost per transaction, but the overall costs go up as your transaction volume increases. Doing EDI over the Internet does require technical expertise. This cost in technical expertise will increase depending on the number of trading partners and types of transactions. Transaction volumes are not usually a major cost factor when it comes to EDI over the internet.
  • Security. Every business that exchanges information with other businesses needs an on-going data security program. VANs have a lot of security expertise. The question is how much security do you need for your data, and how much outside security expertise do you need, if any.
  • Flexibility. VANs increasingly offer more and more value added services. These B2B eCommerce and supply chain information services can provide you a lot of flexibility and even a competitive edge. At the same time a long-term, fixed-cost contract with a VAN can become a severe constraint as lower cost alternatives over time become available for B2B eCommerce services.

Deciding Whether to Use a VAN or the Internet. There are no easy answers, but here are some rules of thumbs:

  • Small Company With Small Number of Trading Partners. Tough choices. Many times your large trading partners will have several B2B eCommerce options for you and even assist you with getting setup for free. Just ask. A third-party consultant, a VAN, buying EDI software or, if you have a programmer on staff, may be an option. Need to evaluate the startup costs and on-going costs. Again, ask your largest trading partners for advice. Many times, large companies have a whole web site dedicated to helping trading partners get setup to exchange electronic documents.
  • Medium-Size Company A third party consultant or software as a service (SAAS) vendor that caters to your industry and your major trading partners may be the best answer. Medium-size companies should look for every opportunity to exchange electronic documents over the internet. VAN charges for small and medium companies can be expensive. If you have an IT staff, it is also time to start building up your expertise to exchange EDI, XML, or proprietary-formatted documents over the internet. As the number of your trading partners grow, you should look for every cost-effective opportunity to setup trading partner relationships directly in order to exchange electronic documents over the internet.
  • Large Companies With Hundreds of Suppliers. Invest in IT staff and software to exchange business documents over the internet. Software includes EDI translation software and managed file transfer software. Maintain relationships with one or more VANs. As a minimum, use VANs for connectivity with suppliers that are not cost effective to connect over the internet and with major trading partners that opt for a VAN / B2B eCommerce portal only solution. Additionally, VANs are offering more value added services such as supply chain information services and software, data synchronization, and matching services such as matching purchase orders and invoices. Some of these offerings may be cost effective or offer you a competitive advantage.


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Can We Have Both: Real-Time Data and Personal Data Privacy?

Sunday, January 10th, 2010

Increasingly a major challenge for businesses is how to balance the need for real-time data and still protect the privacy of personal data. With information becoming so mobile and real-time on the internet, there is a real danger of people losing their rights to privacy and even their freedoms. The question for businesses and society is how can people enjoy rich, real-time information, and not lose their freedoms?

The Personal Data Privacy Challenge. Ideally, data needed for an application is freely available. Free, accessible data is easy to move and transfer between computers in real-time. There are challenges when data is Personally Identifiable Information (PII). This is information that can be used to uniquely identify, contact, or locate a single person or can be used with other sources to uniquely identify a single individual. In these situations data is needed to be protected both at rest (storage) and in motion. This can be done through procedural methods such as password protection or the use of encryption. More and more businesses and application developers are balancing the need for the free movement of data versus the need for personal data privacy.

The Social Debate of Personal Privacy. Our society as a whole is still coming to terms with personal data privacy versus reaping the benefits of social networks and real-time data. An example of this is where Facebook made their privacy policy significantly less restrictive for their hundreds of millions of subscribers. See RWW’s posting Facebook’s Zuckerberg Says The Age of Privacy is Over, for more on Facebook’s privacy changes. My comments on this were as follows:

“Is Facebook’s privacy settings leading us into a new era of social openness or are they arrogantly deciding for us that we need no privacy? I do not like Facebook’s cavalier and drastic approach in changing their privacy policy, but the real question is whether their privacy policy is reflecting social norms, and as a society should we be giving a way our privacy for the benefits of social networking.

Privacy is so closely tied to freedom. If someone wants to control you and knows everything about you, they can control you and take your freedom away. If someone wants to control you and they have no information about you, it is difficult for them to control you.

In the decades before the internet, Americans had a lot of privacy. I would say that this was not always the norm. When the U.S. was first founded, your neighbor’s usually knew everything about you. If you committed adultery, you received a Scarlet Letter. Everyone knew it. It was not until our society started to become more mobile that we began to have a high degree of privacy.

Now with information becoming so mobile, we are losing our privacy again. How can we enjoy all this rich, real-time information, and not lose our freedoms?”

The benefits of real-time data versus the risk of losing personal data privacy is a thorny issue. Businesses will need to balance these issues in light of customer needs, Government guidance, and business service offerings.


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IT Innovation Using Real-Time Data – The End of Information Latency

Wednesday, December 30th, 2009

Since my military days, I have always had a passion for figuring out ways to shorten decision-making cycles. In most cases this has involved automating business processes and getting different systems and sensor devices to exchange data on a cyclic or on-demand basis. Now with the advent of the internet with faster and faster bandwidths, the possibility exists for businesses to about eliminate decision-making cycles.



Information Latency – A Prime Driver of Decision-Making Cycles. With the feasibility of businesses having real-time data, anywhere, any place, businesses need to re-think their decision-making cycles to eliminate information latency and harness real-time data. Instead of business operations having to wait on information, businesses can make decisions real-time. With real-time data, the possibility of “complete” information can be available in real-time, anytime. When you think about it, a lot of business decision cycles are based on waiting for reports or meetings to gain enough information to make a decision. With the potential of real-time data, anytime, anywhere, businesses have a real need to look at ways to innovate and transform their technology to harness real-time data and eliminate decision-making cycles driven by information latency.

Innovating Real-Time Decision-Making. With real-time data, USAF Col. John Boyd’s OODA decision-making loop becomes even more relevant to businesses. The OODA loop (for observe, orient, decide, and act) is a concept originally applied to military combat operations such as dogfights between fighter planes. The OODA loop has also been applied in the past to understand business operations. For businesses, shortening the OODA loop through information technology will always be a key innovation goal. With the advent of real-time data, IT innovation is even more key for businesses to make decisions faster and better in order to continue to offer superior products and services.


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