CarpEDIem

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Ranked #10,833 in Business, #173,417 overall

B2B e-Commerce - Critical Technology Infrastructure for the Global Economy

B2B e-Commerce is one the technologies that powers the infrastructure of our modern world. Forrester Research stated in a July 2007 report that EDI (B2B) transactions represent more than 1/3 of US Gross Domestic Product. Retailers depend upon e-Commerce to purchase merchandise from their suppliers. Automakers rely on B2B to operate their manufacturing plants. Computer OEMs use e-Commerce to manage their supply chains. Hospitals depend upon B2B for running lab tests and ordering supplies. Banks rely on B2B to transfer funds, make payments and trade stocks. Without B2B e-Commerce the modern economy would be significantly less efficient than it is today.

Carp EDI em 

What's in the name

According to Wikipedia is:

Carpe diem is a phrase from a Latin poem by Horace. It is popularly translated as "seize the day". The general definition of carpe is "pick, pluck, pluck off, gather" as in plucking, although Horace uses the word in the sense of "enjoy, make use of, seize."

Is it a coincidence that the center of this word spells "EDI," the world's most popular B2B e-Commerce standard? I think not. B2B is one of the most powerful technologies ever invented. And B2B is a technology that can enable businesses to seize the day no matter what their ambitions are.

And, yes, I know that the URL for this lens is spelled incorrectly, but someone had already grabbed the URL with the correct spelling.

Seize the Day 

My Mission

B2B technologies have been in existence since the 1970s and are widely deployed throughout vertical industries on six different continents. But we only begun to capitalize upon the potential that B2B e-Commerce can provide. Only 50% of the transactions that could be automated with e-Commerce are using the technology today. As a result, businesses must contend with parallel business processes - half paper-based and half digital. This is not only bad for the manufacturers, retailers, banks and hospitals who have not been able to fully optimize their business processes, but it is bad for all of us consumers who purchase goods and services from these companies. When automation can occur to maximize efficiency not only do costs decline, but customer service improves and product innovation accelerates.

My mission in this lens is to promote the broader use of B2B e-Commerce amongst businesses worldwide. I am hoping you will join me in this quest.

Six Degrees to B2B Integration 

How B2B Affects the Activities in your Everyday Life

Every activity in your life is no more than six degrees away from a process that is supported by B2B integration. For example, I flew on an airplane recently from Chicago to Washington DC, which was secured in part by the use of EDI transmissions from the airliner to TSA. The laptop I am typing on was assembled by Lenovo who ordered the hard drive, memory, microprocessor and other components using B2B e-Commerce. The Diet Pepsi I am drinking was purchased by a merchandising manager responsible for replenishing the Costco stores in Northern Virginia. The electricity and broadband connections I am using to power my laptop are provided by utility and telecommunications companies that use B2B technologies to operate their networks.
B2B and Your Last Doctor's Appointment
Have you been to the doctor lately? If so, then chances are high that you were fewer than six degrees of separation from B2B e-Commerce.
B2B and Your New Car Purchase
Have you purchased a new car recently? If so then chances are high that you were fewer than six degrees of separation from B2B e-Commerce technologies.
B2B and Your Personal Finances
Do you get direct deposit at work? Do you own mutual funds in an investment account? Have you purchased a stock lately? Is your home or car insured? If so, then chances are high that you were fewer than six degrees of separation from B2B e-Commerce.
B2B helps keep you Safe
Have you flown on an airplane, used prescription drugs or made a purchase with a credit card recently? If so, then chances are high that you were fewer than six degrees of separation from B2B e-Commerce technologies which helped protect your safety, health or identify.
B2B and Your Trip to the Store - Part 1
Have you purchased office supplies, clothing, furniture or electronics from a retail store? If so, then chances are high that you were fewer than six degrees of separation from B2B e-Commerce. The first link explains how B2B enables the sourcing, purchasing, financing and insuring processes in the retail supply chain.
B2B and Your Trip to the Store - Part 2
The explanation of how B2B e-Commerce empowers the retail industry is continued with a focus on the shipping, export/import, invoicing and payment processes.
B2B and Your Latest Airplane Trip
Have you flown on an airplane lately? If so, then chances are high that you were fewer than six degrees of separation from B2B e-Commerce technologies.

B2B e-Commerce in the Automotive Industry 

Six Degrees of Separation

Automotive vehicle manufacturers, parts suppliers, dealers, aftermarket retailers, financial institutions, property & casualty insurers and government agencies all depend upon B2B e-Commerce technologies to support their every day activities.

How to the Economic Recession is Impacting B2B 

Trending Transaction Volumes against Major Events

As the economy grows more digital there is a close correlation between macroeconomic events and B2B e-Commerce. Examples of how B2B has been impacted by the collapse of the financial markets and by changes in the supply chain are illustrated below.
Financial Markets during 2008
In SWIFT's annual report published in May 2009, they providing a chart linking activity on SWIFTnet with the major macroeconomic events occurring around the world. The SWIFT network carries a variety of transaction types related to foreign exchange, trade finance, securities and payments. There are a number of interesting correlations between B2B transaction volumes and the collapse of major financial institutions such as Lehman Brothers and government intervention into accounts such as Merrill Lynch.
Supply Chains during 2008
I performed my own analysis relating B2B transaction volumes in the retail and industrial supply chains. I charted EDI and XML messages against recent macroeconomic events such as rising oil prices, swine flu outbreak, food safety scandals and automaker bankruptcies. I also identified correlations between the Christmas holiday season, Beijing Olympics and US presidential election and B2B.

B2B Transactions and the Supply Chain 

June 2008 - May 2009

Here is a diagram of how B2B transaction volumes varied as major events of the economic recession unfolded between June 2008 and May 2009.

How B2B E-Commerce can help with Current Events? 

From Pandemics to Government Bailouts

Expanded use of B2B e-Commerce technologies could play a role in long-term challenges such as homeland security, environmental policy and health care costs. B2B can also help with more recent issues such as flu pandemics, food contamination and the financial crisis.
B2B could help with Pandemics such as the H1N1 Swine Flu
State laws require providers and laboratories to report cases of certain diseases to local and state public health departments. Nationally "notifiable" diseases are forwarded by the state agencies onto the Centers for Disease Control and Prevention (CDC). Connections between the states and the CDC are electronic and highly automated. However, the first mile between the providers and the local and state agencies is highly manual.
B2B helps with Airline Safety and Homeland Security
In January of this year, the TSA began the first phase of implementation for its Secure Flight program. Secure Flight is one of the many homeland security recommendations put forth by the 9/11 Commission. The program calls for airline operators to transfer responsibility for watch list monitoring and passenger screening to the US Federal government, specifically TSA. The process starts by airline operators submitting a file for each scheduled flight that includes the names of all passengers as well as their date of birth, gender and full itinerary.
B2B could help accelerate Repayment of TARP Funds
Every major financial institution in the US has implemented B2B integration to improve the efficiency of processes such as securities trading, insurance distribution and corporate purchasing. However, many of these financial institutions have only achieved successful automation of a subset of their business processes and only with a minority of their business partners.
B2B and Contamination of the Food Supply Chain - Peanut Butter
Peanut Corporation of America (PCA), the now bankrupt salmonella source, offers an excellent illustration of how complex the food supply chain has become. To eradicate the threat of food contamination, manufacturers must identify all of the machinery in manufacturing plants and all of the packaged products delivered to grocery stores. However, the most challenging aspect might be locating the impacted products already in consumer households.

Should the US appoint a Cabinet Member for B2B e-Commerce? 

B2B could improve Environment, Manufacturing, Health Care and Homeland Security

B2B e-Commerce has become such a critical force in the global economy that in January 2009, I proposed that the new Obama-Biden administration should consider appointing a cabinet member to focus on B2B e-Commerce.
Introducing the Proposal
President Barack Obama's technology plan includes an ambitious list of projects to reform the patent registration system for entrepreneurs; upgrade computer systems in our schools and fund various R&D programs for innovation. There are a number of altruistic initiatives to promote further expanding broadband connections to inner cities, safeguarding personal privacy from corporate abuse and engaging citizens online during policy development. However, noticeably absent from the President's technology platform was a deliberate strategy to encourage further adoption of e-commerce.
B2B e-Commerce could save $75B in Health Care Costs annually
Details on how B2B e-Commerce could enable health care reform in four primary areas - 1) Electronic Health Records; 2) Electronic Prescrptions; 3) E-Pedigree and 4) Health Care Administration
Five Ways B2B e-Commerce could Reduce Industry's Carbon Footprint
1) Electronic marketplace for cap-and-trade system; 2) Curtailing commercial building energy use; 3) Green procurement and sourcing; 4) Eliminating excess consumer products inventory and 5) Removing paper from the supply chain.
B2B E-Commerce could help to Automate Homeland Security
Further adoption of B2B could help with government regulations for supply chain security such as 10+2, C-TPAT and the Advanced Manifest Rule.
B2B could help to improve the competitiveness of the US Economy
By enabling new business models such as demand driven supply chains and supply chain finance, B2B e-Commerce could improve the competitiveness of US manufacturers especially small businesses.
Help Wanted: Federal B2B e-Commerce Czar
Manufacturing Business Technology printed this story on the idea of a Federal EDI czar.
Will Sarah Palin be the next Federal E-Commerce Czar?
Did Sarah Palin resign her post as the Governor of Alaska to seek appointment as the Obama Administration's Federal E-Commerce Czar? Highly unlikely. Read my analysis of Palin's candidacy for the role.

B2B e-Commerce is Critical to US Health Care Reform 

Interoperability forms the critical foundation for Electronic Health Records and Reduced Administrative Costs

To lower the costs of health care and improve the quality of care, B2B e-Commerce technologies must be more fully embraced by private health insurers, Medicare, Medicaid, hospitals, physicians, pharmacies, group purchasing organizations, product distributors, pharmaceutical, medical devices and medical and surgical suppliers.

What is Your Opinion about a B2B e-Commerce Czar? 

Vote!

Would a B2B e-Commerce Czar lead to too much federal government intervention in private industry? Or is the right catalyst to accelerate adoption of B2B e-Commerce technologies that can improve the environment, health care and the supply chain?

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Yes, the US should appoint a B2B e-Commerce Czar

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No, this is a bad idea

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Maybe, if controlled properly it could work

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Obstacles Preventing Greater Adoption of B2B e-Commerce 

Conflicting Interests

With all the benefits that businesses stand to gain from using B2B e-Commerce, you may be wondering why more companies aren't using it. There are a number of obstacles that prevent greater adoption. Most of these have to do with the conflicting objectives of various different standards groups and market influencers. Read about the top issues in B2B e-Commerce below:
Too Many Standards!
In the early days of B2B e-Commerce there was only one standard, EDI. Today there are at least 50 different B2B standards in popular use. The result is that integration between companies is more complex than ever before. I coined the phrase "Long Tail of B2B e-Commerce Standards" to describe the growing proliferation of industry-specific XML formats.
Does the Green Coffee Bean industry really need its own B2B standard?
An excellent example of the Long Tail of B2B e-Commerce Standards is Green Coffee XML. The importers and exporters of Green Coffee have developed their own standards to support the unique business processes associated with the product specifications, contract terms and invoicing processes in their industry. Read about the pros and cons of such an approach.
Portals Create Information Latency
Many large buying organizations have introduced supplier portals which allow for electronic information sharing. These portals provide a low-cost, easy-to-use alternative to EDI and XML for small businesses. However, many buying organizations are forcing all suppliers, large and small, to use their portals. Consequently, large suppliers are being asked to move backwards from fully automated EDI transactions to manual keying of data.
Legacy Communications Standards Create Information Latency
One of the challenges B2B practitioners face in optimizing their e-Commerce initiatives is the widespread use of legacy dial-up and telco standards still in use today. Private industry has been trying to encourage users of these outdated protocols to upgrade for years without success. Is government regulation the answer?
Inexperienced Technology Vendors Confuse the B2B Marketplace
A number of new vendors have emerged in the B2B market in recent years with offerings they refer to as "Supplier Networks." While they are these vendors have become the darlings of analysts in short order, there is little distinguishing these companies from the 1980s VAN providers other than some clever marketing. These vendors are a negative influence on the market as they only support a short list of standards, offer few options for small businesses and refuse to provide interoperability with other networks.
New Standards such as AS3 Fail to Achieve Market Adoption
AS2 was arguably the most disruptive technology the B2B e-Commerce market has witnessed throughout its lifecycle. The follow up standard to AS2, called AS3, has been an abyssmal failure receiving almost no adoption. Did the creators misjudge the market opportunity or was this a conspiracy by software vendors to protect revenue streams from proprietary file transfer protocols?

Long Tail of B2B Standards 

The Proliferation of Standards Complicates B2B Integration

A few e-Commerce standards such as EDI and SWIFT FIN represent the majority of use (the short head). However, there are countless other standards designed for specific industries, business processes and geographic regions which represent the long tail.

EDInomics 

The Study of how B2B e-Commerce Technologies are impacting the World

EDInomics, which is a newly invented term I create for the study of how B2B e-Commerce technologies are impacting the world.

EDInomics - E D I nom ics [e-di-nom-iks] - Noun

1. A study of how Electronic Data Interchange (EDI) and related Business-to-Business (B2B) e-commerce technologies can be used to improve business performance by reducing administrative costs and accelerating revenue growth.

2. A study of the market dynamics of vendors, technologies and regulations in the business-to-business electronic commerce market

3. A study of how everyday life activities are enabled by B2B e-commerce technologies.

EDInomics - The Blog 

Recent Posts from my Blog

As you probably determined by clicking on the links above, I manage a blog entitled EDInomics, which discusses news and trends in the world of B2B e-Commerce. This is one of the many tools I use to evangelize the impact that B2B is having on the economy and the world.

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See the Latest B2B e-Commerce Standards I have Discovered 

Long Tail of B2B Standards

Clinical Data Interchange Standards Consortium (CDISC)
AIF
MDDL
PCATS
Office Open XML
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by stevekeifer

I am a marketing professional in the IT services industry. I currently work for GXS, a B2B e-Commerce provider, as the Vice President of Industry and... (more)

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