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By Gene Geiger, Geiger
Anyone who has worked in this industry for more than a week understands how painfully costly, time-consuming and error-prone it is to walk an order from the quote through payment stages. We drown in the paperwork and phone calls it takes to coax most orders to on-time completion. Is there really a better way for an industry of small companies delivering custom solutions?
Having worked for more than three years on the challenge, it is clear that e-commerce is becoming a reality for the industry and for you. No, the paperwork and phone calls will never go away entirely, but we can automate the routine tasks - and enjoy significant savings in the process.
How Are We Getting There?
There are the three steps showing how we are getting there:
- Create an e-commerce standard.
Our industry could not afford to create an e-commerce standard from scratch. Instead, we adopted the RosettaNet system, currently being used by IT companies, such as Intel and Microsoft. We found the brilliantly designed RosettaNet works well for our industry with only minimal tweaking.
The goal of e-commerce and its benefits come from having the computer systems of suppliers and distributors talk directly to each other to exchange every-day information (transactions) with people only handling "exceptions." For this to work, an e-commerce standard requires three elements:
Business Process
Here we identify what gets sent, such as a PO or invoice. Instead of paper going via fax, we are set up to send electronic documents over the Internet using a computer language called XML (eXtensible Markup Language), which is ideal for communicating the structure and content of business documents.
Language
Not as smart as we are, computers require a well-defined business language; i.e., there must be only one set of terms used in the XML documents. For example, there can only be one way to express how to ship UPS Ground or Net 30-day payment terms or today’s date. If one computer is expecting "year-month-day" but actually gets "day-month-year," everything grinds to a halt.
Transport
This defines how the XML documents move through the Internet to a destination and is analogous to how UPS handles physical packages. So, we must specify how the electronic documents are to be packaged, labeled, moved and tracked.
- Create a community of trading partners.
The ePromoStandards Alliance, or ePSA, has led the effort to adopt RosettaNet’s standards and has built a capability with its staff and a Testing Lab to help its community of visionary members put them to use.
Month by month, the community of implementers has grown as the business reasons for doing so become increasingly clear. At this point, approximately 100 firms (some large, some small) are engaged in learning about and implementing the standards in their businesses and with their trading partners.
- Implement the process - "Just Do It."
We are an industry of small sales-oriented companies, and most of us are not known for our IT capabilities. How can we make this work so all companies, including small firms, can take advantage of the opportunity? There are three paths:
The Service Provider Connection
For many, it makes great sense to use a "service provider" to simplify and speed the effort. The service provider has the infrastructure, supplies the technical expertise and takes on the job of linking up with the trading partners. The documents flow through this "third party," which makes sure everything comes and goes seamlessly.
The Direct Connection
With this approach, a company buys ePSA compliant communications software, manages its own firewalls and trades directly via the Internet. Trading partners using a direct connect will see significant advantages when they start implementing the more complex transactions.
The Hybrid: Service Provider Plus Direct Connection
A combination of the first two, this model allows trading partners to use the direct route to those players capable of managing a direct connection and go via service providers to access to the much larger community using Path 1.
Getting Implementation Help
In the end we will see companies trading both directly and indirectly. To make that happen, we need a low-cost "transport system" for those trading direct. Equally important are the service providers to help the majority get on board - and to help the direct traders reach those who will not trade direct.
Transport Tool
TAG Business Tools has developed a product called the TAG Transaction Switch™. This simple, cost-effective software seamlessly carries business transactions securely between trading partners across the Internet. There are no intermediaries and no transaction fees. It’s one of the industry’s best-kept secrets.
Once a company hooks into one player, it is automatically connected to every other player using ePSA compliant software or services. This is because the ePSA standard connects everyone through a business registry, also known as the UDDI directory, which contains the Internet addresses of every company that is part of the trading network. Think of it like e-mail with a centralized address book.
Service Provider Support
While the TAG Transaction Switch will be a boon to some firms, others will turn to a service provider. Here are some ways this will be done:
Document Translation And Routing
Trendec, a Dallas-based IT firm, has built its Any2Any service to address the needs of most industry firms - firms with limited technical and financial resources that want to trade electronically using ePSA compliant standards. Through this "gateway," any company’s electronic information (files) can be translated into ePSA compliant documents that can be sent to and read by any other firm.
Online Order Management
DistributorCentral of Gardner, Kansas, has built Web tools that allow suppliers to place and control their product information online. On the distributor side, salespersons and buyers can search that product information and create purchase orders online.
Purchase orders and information about those orders are then routed electronically to the distributor’s backend system using ePSA PIPs or QuickBooks downloads. A distributor may even choose to use DistributorCentral for its entire order management. In such a case, DC will submit electronic POs directly to suppliers on the distributor’s behalf. Beyond that, suppliers will be able to submit order status PIPs to DistributorCentral to enable distributors to view the status of their orders from their own Web sites.
Software Integrators
In other cases, software makers or third parties are looking to build "gateways" into the software packages industry firms use. For example, it won’t be long before users of QuickBooks will be able to send and receive ePSA compliant information as an add-on feature of that program. Similarly, other industry software will have the same capabilities built in.
Internal Versus External Processes
When you consider getting involved, understand that this movement can only address moving information back and forth between trading partners. Getting information out of and back into your own computer systems is up to you.You may want to get help from your software firm (see software integrators above) or from a consultant, such as Trendec or the Mesa Group, the firm that Geiger and Gill Studios have used.
Value
Will all this be worth spending your time and money? Well, when you consider how expensive the current system is, we must find a better way. Across other industries, e-commerce is taking root.
In our company, we figure it costs us some $2.50 per order just to follow up by phone and fax on the order status and shipping. The other day, I learned we have saved ½ hour per day now as the result of just one supplier sending us order status electronically. As we move forward, there will be significant gains from the confirmation of purchase order detail, the receipt of electronic invoices, etc.
The payback will not come overnight. Rather, the gains will be step-by-step. Smart businesses maintain their competitive advantage single by single, not by swinging for the fences every time up.
Learn Once - Do It For All
In three short years, ePSA has adopted a simple and workable, yet sophisticated, e-commerce standard. To give life to the standard, ePSA created an implementation strategy that has, in turn, encouraged service providers and software developers to offer support to anyone wanting to get on board. We have gotten over the crest of the hill and the momentum we now have is unstoppable.
Some 50,000 transactions are now being processed each month, and the volume is growing exponentially. Companies large and small are jumping in and finding that getting on board is amazingly straightforward.
Changing business processes is not easy. Doing so certainly presents challenges, but most can be overcome with some effort and help from others in the community. A representative from a supplier company told me, "We have run into roadblocks, but most of them happen because accounting systems are way out of line. The ePSA standard has exposed our weaknesses to ourselves and taught us a valuable lesson in how to manage information technology. We’ll have our problems fixed shortly, and then, we’ll be able to handle the sort of e-commerce transactions required by our first trading partner. Once we satisfy that distributor, we’ll automatically be able to satisfy every other distributor."
And that’s the whole idea. Once you figure out how to do it for one, it works for all. PPB
Gene Geiger is president and CEO of Geiger (UPIC: Geiger), a fourth generation family-owned and -operated distributorship based in Lewiston, Maine. Geiger, who completed his term as member and chair of the PPAI Technology, Terminology & Standards Committee in 2002, currently serves as chair of the ePromoStandards Alliance (ePSA). PPAI recognized Geiger for his years of volunteering on PPAI committees and serving on the PPAI Board of Directors, class of 1986, with the 2002 PPAI Distinguished Service Award.
Reprinted with permission. Promotional Products Business November 2003
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