XML poses no big threat to EDI

Vendors are pushing the Extensible Markup Language (XML) as a more flexible format for exchanging business data among trading partners. But many large user companies aren't ready to scrap their big investments in traditional electronic data interchange (EDI) systems for XML.

"If it ain't broke, don't fix it," was an oft-heard sentiment at the annual Data Interchange Standards Association (DISA) conference here earlier this month.

Another barrier is the lack of standard data tags in the new XML format. But attendees packed a conference session to learn more about XML, which some industry observers tout as an eventual replacement for EDI's X12 standard format.

Steven Bell, an analyst at Forrester Research in Cambridge, Massachusetts, predicted that during the next year companies will start using XML to exchange information they can't share using EDI. "I think X12 will morph into an XML-based standard," Bell predicted, but he said he doesn't see EDI becoming obsolete any time before 2003.

Backers say XML makes it easier to change, exchange and use data of any type, particularly because the tags can be written in English. Standard EDI -- intended for automated data exchange among business systems -- is more cryptic and includes strict limits on the number of characters and position of data in a document.

Even when they use the X12 standard, companies typically have to consult with their trading partners to adapt EDI documents to suit their needs.

Nelson Peck, e-commerce coordinator at Kodak Polychrome Graphics in Victor, New York, said he hopes XML will help him to reach smaller business partners that have resisted EDI because of the cost and complexity of setting up a system. But Peck said he wants to see standards for XML and EDI.

Right now, standard data tags are merely works-in-progress at a variety of different organizations and vendor-led consortia.

One of the more promising XML efforts is the high-tech industry's RosettaNet consortium, which is creating an XML-based supply chain that's expected to be ready next year.

Meanwhile, EDI users will stay tuned, because they must be prepared for the day when one of their major trading partners forces them to switch to XML.

"I don't want to get caught behind," said Tom Gustafson, EDI coordinator at Taylor, Michigan-based Coughlin Logistics, which engages in EDI transactions with the Big Three automakers.