E-Business Technology Has a History

As we noted at the beginning of this introduction, e-business became a household word during the late 1990s, but many companies have exchanged standard electronic business documents for as long as two decades. Over this time, most of the larger manufacturing, financial services, retailing , and transportation companies have used electronic data interchange ( EDI ) for quotations, orders, ship notices, and invoices, with varying degrees of success.Those using EDI successfully could reduce inventories dramatically with substantial savings, as well as tighten supply chains and improve cash flow.

But not all companies could use EDI with this kind of success. In fact, most companies, especially smaller enterprises , found EDI too expensive, complex, and just not worth the investment. Unless forced to use EDI by their larger customers, most small and medium- sized companies ignored EDI and e-business in general until the web came along. Nonetheless, the experience with EDI provides some valuable lessons ”both pro and con ”for a new web-based specification.

Along with development of the web in the late 1990s came a new high- powered web language called Extensible Markup Language ( XML ). The web pages loaded on common Netscape or Internet Explorer browsers display text and images and (with some effort) can capture data in web-based forms. XML makes it possible to send structured data ”like the extensive data found in company databases ”across the web, using many of the same basic tools.With XML, the idea of exchanging business data became much more of a prospect for many more companies than with EDI.

While this potential of XML for business data exchange became apparent to EDI proponents, the first applications of XML were for electronic publishing, particularly for electronic documentation. Even as a publishing tool, XML had some early business uses. For example, National Semiconductor, a manufacturer of electronic components , put its extensive parts catalogs into XML, distributing the data in an XML syndication protocol called Information and Content Exchange ( ICE ). With ICE, National Semiconductor subscribed its many specialized distributors to customized versions of its catalogs, managed through profiles stored in XML. ICE enabled National's distributors to get only the parts data they needed and ensured that they always had the latest updated information, without National having to devote extensive resources.[8]

The key to XML's potential was its extensibility (the X in XML) that made it possible to define a common set of terms on which companies could agree for their business messages. On this point XML became a little too promising . By late 2000, hundreds of individual XML-based vocabularies emerged, representing different industries and individual business functions that cut across industry boundaries. It became clear that any hope for achieving interoperability across these different vocabularies required a solid universal specification that would enable companies in different industries to exchange business data.