Isn’t the Internet Supposed to Simplify Business?

By David G. Echelbarger, CPA

"Why can’t we exchange data with this business over the Internet?" was the question a client asked as we discussed the costs associated with traditional Electronic Data Interchange (EDI). EDI is the method businesses use to electronically exchange business documents, such as orders, purchase orders and order confirmations. "Isn’t that one of the benefits of the Internet?" he asked.

The answer is yes. The real challenge is the pace at which new standards are developed and accepted by the market.

In June of this year, Universal Description, Discover and Integration (UDDI.org) unveiled version 2.0 of its specification for enhancing the way companies communicate electronically over the Internet. UDDI is a registry that allows businesses to do three things:

1. Discover each other
2. Define how they interact
3. Share this information in an open, global registry

The public registries are now operational and backed by more that 280 companies. Microsoft, IBM and Hewlett Packard are running the databases. (After what we hear from the media about their rivalry, it is interesting to note that IBM and Microsoft are working on this project together).

UDDI accepts and organizes three types of internet-based information:

1. White Pages for address, contact and known identifiers
2. Yellow Pages for industrial categorizations based on standard taxonomies
3. Green Pages for the technical information about the services offered by the business, including references and interfaces to the services a company can deliver

UDDI supports communication through eXtensible Markup Language (XML) and Simple Object Access Protocol (SOAP). XML is the basis for the "language" of business internet communication and allows data contained within documents, such as a parts catalog or pricing data to be extracted and used in other applications. For example, a seller posts his catalog on the Internet; the buyer issues a purchase order and the order will automatically be placed in the seller’s system for acceptance. After shipping, the seller can electronically invoice the buyer. This takes little manual effort by either party when their systems are communicating.

SOAP allows processes to be executed from remote locations. To continue the above example, instead of having the purchase order wait in a data file for acceptance, it could be executed by automatically checking the customer status and credit terms. If the order was from a new customer, the order could be emailed to the credit department for evaluation and approval.

The services database takes time to build. For example, to register with UDDI, a company must map their commerce services, then look to the UDDI specifications for help in describing each business process or behavior. These specifications are known as T-Models. If the T-Model does not exist for the service to be offered, a new one must be created, which requires manual effort. The advantages of UDDI will become more readily available when software developers design software that automatically creates the information needed by UDDI.

Several mid-market software developers have incorporated eXtensible Business Reporting Language (XBRL) into their applications. XBRL is designed to standardize the preparation, publication, extraction and exchange of financial data.

Examples of how XBRL will be used to simplify business and save time include:

• Issuing financial reports to the bank or filling out credit applications
• Providing a standard by which investors and board members can analyze financial statements
• Consolidating financial statements from different companies or divisions within a company
• XBRL may even become a standard for completing tax forms

Most eyes are now on Microsoft Great Plains Business Solutions and its Great Plains and Solomon product lines. Recently, Microsoft Great Plains released an object-based version of Solomon which simplifies the integration with other applications such as UDDI.

Microsoft Great Plains Business Solutions next generation of applications will be built on a new foundation known as .NET. The core of the .NET model is what Microsoft calls "Web Services". The very heart of .NET’s architecture is the support of XML and SOAP.

SOAP and XML are platform and device independent which make the combination powerful. Consider handheld devices such as a Personal Data Assistant (PDA) or a cell phone used to communicate with a sales order system to place an order from a customer’s site.

The Internet has not changed the way business is conducted overnight, but significant progress is being made to simplify and standardize the communication for businesses over the Internet. As software developers continue to enhance applications, and acceptance of industry standards is increased, exchanging data over the Internet with companies will become easier and more cost effective.

David G. Echelbarger, CPA is the Director of Egroup, the Technology Solutions Division of Echelbarger, Himebaugh, Tamm & Co., P.C. (EHTC). He may be reached at 616.575.3482 or davide@ehtc.com