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XML Gets Businesses Talking

BizTalk and OASIS are standardizing data formats and network specifications with XML to improve business information exchange.
by David Wall, XML Magazines

Invoices are a pain. If you're a contract programmer, you know it's a struggle to deal with them. Should you mail a signed paper copy, e-mail a spreadsheet, log on to a proprietary Web interface, bug the accounting department on the phone, or what? You've known there must be a better way. There is, and
BizTalk and OASIS are figuring it out-and using XML to hammer out the details.

That better way involves standardizing electronic business practices to identify and keep track of all that important data. BizTalk, backed by Microsoft, and the Organization for the Advancement of Structured Information Standards (OASIS), a nonprofit international consortium, rank among the best-known groups that have sprung up to fill the need to simplify business information exchange. Both groups operate public registries of standard Document Type Definitions (DTDs) and schemas, and both aim to provide a way for customers, vendors, and service providers to standardize their ways of encoding information.

But are BizTalk and OASIS really in competition?

"People are choosing to see a battle there," said David Connelly, president and chief technology officer of the Open Applications Group (OAG), of which Microsoft is a member. "People see a Machiavellian struggle just because Microsoft is Microsoft." Connelly and the OAG have been involved in hammering out the BizTalk technologies with Microsoft.

The head of OASIS agrees that there's not a particularly defining conflict. "No, not at all," said OASIS Executive Director Laura Walker. "We're not competing."

BizTalk and OASIS are attacking different pieces of the information-exchange model. Both see XML as an important part of the overall solution. Indeed, they're using it in much the same way. OASIS, however, generally sticks to standards for defining data documents that are exchanged among businesses. BizTalk does that too, but emphasizes interapplication data exchange. From BizTalk's point of view, standardization of XML data descriptions is just one piece of a large system that's under development.

Standardization of Business Terms: Not a New Problem
The discussion over standard computer data formats to exchange business information openly among individuals, applications, and businesses derives from the fact that the language of business is fairly standardized already. Businesses consider different quantities important in making management decisions. These differences are particularly pronounced in the various accounting standards among countries and regions, though many terms are universal. For example, if I ask you what your product costs, you know that I am referring to the amount of money you want from me before parting with it. If I ask you how much gross profit Coca-Cola Corporation made last year, you know that I am interested in the company's revenues minus their expenses. I have just asked you for information using business terms with broadly understood definitions. A formal education in business (especially in accounting and finance) consists largely of learning the taxonomy of values and the names assigned to them, as well as some standard ways of manipulating those values with mathematics. In major economies, all public companies must file and publish standardized financial documents. These same standards apply to coal mining companies as well as to investment trusts; indeed, any trained financial analyst could extract meaning from the financial statements of either company. Similarly, all companies in a given country must file standard tax documents that the country's tax authority can accept and understand.

It doesn't take a genius to see the value of applying XML to a universe that's based upon standardized terminology. In order to exchange information among organizations, we need standardized schemas for surrounding the broadly understood values with XML tags. If "gross profit" is a generally understood concept, we need XML tags with which to surround gross profit values. If it's known that a product's cost consists of the sum of the costs of its parts, the labor invested in assembling those parts, and some share of overhead, then we need a "cost of goods sold" entity that can contain "parts cost," "labor cost," and "amortized overhead" elements.

It is generally accepted that with a properly designed and universally agreed-upon DTD, data transfer among various entities (individuals, businesses, and software applications) should be a breeze. For example, there could be universally understood DTDs and schemas for universal presentations of data, such as Securities and Exchange Commission (SEC) filings and tax documents.

There also could be more narrowly defined DTDs and schemas, such as those relevant only in a particular industry. For instance, a consortium of custom plastic parts manufacturers might develop an inventory DTD that includes specific elements for resin and hardener, while a farmers' group might develop XML materials that reflect the particular characteristics of a business based on weather, land, livestock, and crops. Individual business owners might develop and publish XML specifications that reflect their specific products, locations, and job descriptions.

In addition to DTDs oriented vertically toward industries and businesses, there could be DTDs for such generic horizontal business processes as invoicing or generating a paper purchase order. Other horizontal DTDs could serve to notify suppliers that an assembly line's stock of parts is running low or inform employees of their insurance benefits.

A (Back)Bone to Pick with Applications Integrators The case for XML-based exchange standards for business information gets a boost from the current sorry state of affairs in cross-application (in)compatibility. What exists now is a rat's nest of interfaces, preprocessors, translators, adapters, and converters in a typical large enterprise. If you have 10 pieces of accounting and management software in your organization and each program must talk to each of the others, there are 90 connections to be made. In many cases, building those connections is a manual job-the sort of thing you have to pay a consultant or in-house programmer a lot of money to accomplish. Heaven forbid you should ever decide to swap out one piece of software for a new one. This is why legacy software sticks around for so long.

The technology and effort involved in dealing with software interoperability make up a huge industry. Not only do organizational (and contract) programmers spend too many hours building interfaces, but the entire Enterprise Application Integration (EAI) software industry-consisting of CrossWorlds (www.crossworlds.com), Bluestone (www.bluestone.com/main.html), Extricity (www.extricity.com), and others-is based on the fact that getting big management applications to talk to one another is hard. OAG's Connelly notes that managers would dearly love to save the vast sums of money they spend on integrating various applications' input and output.

The OAG promotes a "common backbone" solution to this problem. It works like a bulletin board in a small-town grocery store. You can post information on the bulletin board or extract information from it. If you post something, you know to write legibly, concisely (and in the local language), and to include a way for someone to contact you. If you read a notice, you extract what you need from the bulletin based on its formatting. The common backbone that OAG promotes isn't a bulletin board in the traditional computer sense of the term, but rather a set of rules for publishing and accessing information in some kind of forum.

If we had a way to standardize the way business values are marked with XML, we'd be able to exchange data among applications. If an inventory-tracking program had a standard way to describe the items it tracks and a program that issues purchase orders could access and read those item descriptions,
you'd be on your way to having an Enterprise Resource Planning (ERP) system. You wouldn't have to invest in an all-encompassing solution from a single provider.

But there's more to building a common information-exchange backbone than just standardizing XML specifications. Building a system of networked applications (and links among multiple such systems, each owned by a different organization) requires taking network design into account. You have to be able to package XML-encoded data into packets that can be transmitted across the network, as well as route them to the proper recipients and keep them secure from spies along the way. As the specifications governing the next generation of business information exchange get ironed out, the network data paths over which the information travels have to be considered. This is one of the areas in which OASIS and BizTalk diverge.

XML from the OASIS Perspective
OASIS is a consortium of companies and individuals that have paid a membership fee. Although Microsoft is a member of OASIS, Walker said they haven't taken an active part in the activities of its technical committees or other groups. Mostly, it exists for the purpose of collecting and publishing XML specifications, including DTDs and schemas. The group also aims to standardize the way in which such specifications are formatted and published, further increasing the ease with which they can be exchanged.

OASIS is best known for its www.xml.org Web site. There you'll find a collection of DTDs and schemas that technical people in various industries have established as standards for their way of doing business. There's a subject tree and a search engine that make it straightforward to dig up the specifications documents you need.

OASIS wants to be a well-known repository of XML DTDs, schemas, and other specifications. Organizations (such as the technical committees of industry groups) may devise XML specifications on their own and submit them to OASIS, which will then index them and make it easy for users to locate.

Walker said that the indexing scheme, still in development, will be rather detailed. Take a software company that employs freelance developers as an example. Suppose the company developed a DTD that describes how it would like its invoices to be formatted. It would then notify OASIS of the invoice DTD and the manner in which the DTD should be used. The company's freelancers would visit the OASIS site (xml.org or whatever) and search for the company's published DTDs. They'd find documentation explaining which DTD should be used for invoices and then download it. They'd have to use it in order to be paid.

Walker pointed out that the OASIS server will actually hold many indexed DTDs, while linking to others on the sites of companies and industry groups. OASIS plans to make its indexing scheme an open standard so that industry groups and other organizations can establish their own XML standards repositories. These OASIS-compliant repositories would have a familiar look to the individuals browsing them, and would be universally navigable by software designed to locate DTDs and schemas on the network.

XML According to BizTalk
Like the xml.org site that OASIS maintains, BizTalk provides a Web repository of XML DTDs, schemas, and other data-formatting specifications at www.biztalk.org. But BizTalk does more than provide XML DTDs and schemas. It's more oriented toward the way data moves over networks.

The problem with XML by itself is that it deals with data only. XML documents are very handy for encapsulating subsets of database content in a platform-neutral way because, after all, XML documents are just a special kind of text file. But XML documents don't exist independently. In order to be useful, XML documents must be accessible over a network in a variety of ways.

BizTalk aims to define the network infrastructure on which XML files can be published, accessed, requested, subscribed to, and pushed. Microsoft's term for this is the BizTalk Framework, and it's expected to be incorporated into a Microsoft product tentatively called BizTalk Server. BizTalk Server is supposed to come out during the second quarter of 2000 and may become part of the BackOffice suite.

Does this mean that Microsoft is co-opting XML? Is their "embrace, extend, extinguish" strategy coming into play here, the way it did with HTML? Maybe, said Connelly, but probably not.

More likely, he said, Microsoft will find that it's in its best interest to have a standard protocol for exchanging XML-formatted data, and then build tools which take advantage of that standard. It's natural to think of the emerging BizTalk Framework-or some other set of inter-application standards that dictate XML's behavior on a network-as analogous to the TCP/IP protocol suite. After all, TCP/IP is an open, published standard that enables all kinds of companies to make products that work together on the TCP/IP level. The TCP/IP suite enables consumers to assemble solutions for their networking problems that employ a series of best-of-breed products. For instance, you might use one company's bridges, another's routers, still another's dedicated communications line service, and so on.

That's a term you hear a lot in connection with BizTalk-"best-of-breed." Because it's largely designed as an application-to-application framework, you could combine one company's BizTalk-compliant point-of-sale system with another company's inventory-management software. You could repeat the selection process for the other elements of an ERP system and in the end expect to have a smoothly functioning information system with no programming time invested in building interfaces. That's the idea anyway.

Presumably, Microsoft will do its best to provide good products for the various niches that make up the demand for ERP systems. Possibly its products will somehow work better with each other than with other vendors' products. "They may still decide to make it their own," Connelly said.

This is the sort of model that we see in the FrontPage extensions, which are encapsulated in a Web server plug-in that extends the basic functionality of the server software. Though FrontPage extensions can be attached to a variety of server-side software from Microsoft and others, their benefits are apparent only to surfers who use Microsoft Internet Explorer. Thus Microsoft's customer base has expanded as a result of this particular way in which it embraced an open standard.

BizTalk also aims to explain how information contained in particular kinds of XML documents should be used. Called "rules," these statements detail what information is needed, when, and with what supporting data. The specification for writing XML DTDs does this to some degree; however, BizTalk wants to make the rules more explicit. Without rules, Connelly said, "what you have is content without context. It has whatever meaning you wish to assume it does." Rules, he said, would allow an order-taking program to accept a Universal Product Code (UPC) number, or a manufacturer name and manufacturer part number, or a customer name and customer part number, as equally acceptable definitions of what product was being requested.

Opportunities to Serve Small Organizations
The problem with OASIS's specifications-and particularly with the BizTalk Framework-is that they aren't particularly well-tuned to the needs of small to mid-sized organizations. Companies whose management information systems consist of an accounting package like Intuit's QuickBooks and a series of Corel Quattro Pro spreadsheets aren't going to install BizTalk Server-nor will they have the time to learn enough about XML. They can have all the access to specification repositories they want, but they won't have the programming skills to do anything with them.

Instead, they're going to rely on the XML support that's built into the applications they already use, if such integration comes along fast enough. For example, an XML-aware version of Peachtree Accounting or QuickBooks would know enough to search one of the repositories for specification data relevant to the user's industry and use DTDs found there to store and exchange data.

Alternatively, small companies might rely on a new version of an old professional: the accountant. Business operators want to benefit from the ease of connectivity that XML can provide, but they need to be insulated from the mechanics of that connectivity. They need people who understand the data-interchange standards. Todd Boyle, a Certified Public Accountant, sees XML and its related technologies bringing about real opportunity for his profession.

Boyle runs General Ledger Dialtone, an accounting company with a Web site full of discussions on the future of the accounting profession. He champions the idea of the "Accounting Service Provider" (which he abbreviates as ASP), which would use Internet connectivity-including data-exchange standards like XML-to provide accounting and management information services to small and mid-sized companies.

"What I see happening is a much longer term, [more] far-reaching transition from the maintaining of accounting systems locally, towards hosts on the Net," Boyle said. "ASPs can implement new Internet commerce technologies more effectively than most companies [can do] themselves."

Under Boyle's system, a small business would contract with an ASP in much the same way it contracts with accountants and bookkeepers today. The difference is that the ASP would focus as much on exchanging information as on distilling transactions and values into reports. It would do that by developing and maintaining expertise in data-transfer standards based on XML, BizTalk Framework, and other technologies. With its connectivity expertise, the ASP would be able to provide billing, collection, inventory-management, and personnel services for the small business. It also could provide data warehousing services by storing business data (both raw and refined) in a network-accessible database. The small business under contract with the ASP could then make management decisions with the help of software that referred to the ASP's database.

At present, we're seeing corporations and industry groups work out the standards that will govern the online exchange of accounting and transaction information. Decisions are being made about what information will be included in the digital business documents of coming years. In part, this process has to do with standardizing ways of encoding business values with XML. These standards will apply both to universally understood business processes like invoicing and to industry- and company-specific exchanges, such as a refinery ordering bulk chemicals from its suppliers.

OASIS fits into this system as a central registry of specifications for encoding information. You or your software will be able to go to an OASIS repository and locate XML specifications that you can use to communicate with your suppliers, customers, and internal business units. OASIS as an organization will both maintain its own repositories and publish standards information with which other groups can design their own repositories.

BizTalk proposes to be a repository of XML specifications, too, but it also aims to become a standard for transmitting XML-encoded information over networks, on Microsoft products, and on those of other companies. The BizTalk Framework proposes to govern the manner in which XML-encoded data fits into network packets. It also specifies how those packets find their way from generator to consumer quickly and securely, with a minimum of load on the network.

Standards seem to be developing with large companies in mind-the sorts of places that would like to supplement portions of their SAP and PeopleSoft ERP software with other components. Although this leaves small and middle-sized organizations out of the loop, that may spell an opportunity for "old-fashioned" accountants and other information professionals. XML standards for the exchange of business information may be a big part of an accountant's job in the near future. Until that day, OASIS, BizTalk, and other organizations continue to fill that niche. Someday invoices will actually be fun to deal with.

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