Microsoft's framework, called BizTalk, is based on Extensible Markup Language (XML) standards--a document format created for the Web that's more flexible than HTML--which is intended to simplify the receipt and processing of electronic documents. Microsoft is betting XML will become the trade standard for all types of Internet commerce. If the standard is embraced by the user and server communities, the Internet will allow companies in all kinds of industries to communicate electronically, regardless of their computer systems' compatibility. Other heavy hitters in the computer industry, including IBM, Netscape Communications and Sun Microsystems, are also jumping on the XML bandwagon.
If XML becomes the standard--and usually Microsoft gets its way in setting standards--a small business using BizTalk-enabled products, including Microsoft's Internet Commerce Server, would be able to generate a purchase order on its computer system and have it appear immediately in a supplier's computer system via a real-time Internet connection. To avoid the prohibitive cost of setting up an EDI system, small companies today usually forego this luxury; instead, they generate purchase orders, print them out and fax them to suppliers. The order may sit untouched for half a day before it's processed, which then requires suppliers to re-key the information into a computer.
Some small companies are forced to speed up these procedures by purchasing EDI-enabling software because their larger suppliers insist on it. To get around establishing a full system, they use cheaper translation software that converts a standard EDI document into a form that's acceptable to the other company's back-end system.
One company working this way is Coastal Tool and Supply, a retailer in Hartford, Connecticut, that sells about 5,000 types of hand and power tools. The 18-year-old company, which launched a Web site in 1995, generally communicates with its 400 suppliers by faxing and phoning in purchase orders, invoices and stock status reports, but it employs EDI in some instances.
For its EDI processes, the company uses translation software called Qualedi from Eventra Software (http://www.eventra.com) and a dial-up connection. This allows Coastal to piggyback on its manufacturers' expensive EDI systems. While this is somewhat efficient, it's not based on any Internet standard, so the information is not transmitted in real time. As a result, Coastal has no idea when its supplier is going to dial up and read its mail.
"I have to check constantly to see if [a supplier has] received my purchase order or my invoice, and then send a response," says Todd Mogren, MIS manager at Coastal. "We really don't want to have to check our EDI box more than once a day."
BizTalk and its XML-based Internet backbone is expected to eliminate those hassles because the information will be handled completely electronically. "[With BizTalk,] we'll be able to send purchase orders, and the responses will be in real time," says Mogren. "This is important because we'll be able to know immediately if and when they got the P.O., what's shipping and what's not, and when products are going to be shipped."
"Right now, we're doing everything the old-fashioned way," says Rob Ludgin, Coastal's owner and founder. "What we're looking for is to work our way into the easiest and possibly the least expensive way to do our ordering."