What Would Dr. Johnson Say? EDI, Supplier Networks, Business Networks, Oh My! Jason Busch - May 31, 2013 6:28 AM | Categories: Commentary | Tags: EDI, Friday Rant, Incendiary Tidbits, L1, Supplier Networks I’ve probably sat in on fifty different presentations this past year (and given a fair number myself) about the concept of supplier or business networks. You know, those things that connect buyers and suppliers in the post-EDI world. But wait, don’t tell anyone (especially Wall Street) that new and old EDI providers (Sterling/IBM, GXS, etc.) dwarf supplier networks (Ariba/SAP, Hubwoo, IBX, OB10, Tradeshift, Perfect, etc.) in volume, based almost entirely on their focus on direct spend, despite the fact that both types of services, from a connectivity standpoint, largely do the same thing (more on this in a minute). cXML vs. proprietary standards and direct vs. indirect spend bifurcations notwithstanding (yes, we acknowledge the different types of documents and signals that go back and forth in manufacturing environments over EDI vs. generic indirect supplier networks), just about anyone involved in the physical flow of goods in the manufacturing world knows about EDI is. That’s about 500 million people in the world at least. Just Google the term EDI and you get 60,300,000 pages in response. Most searchers (clearly) know what they’re looking for. EDI, or electronic data interchange, is exactly what it is: the acronym speaks for itself. If you want more detail, here’s the Wikipedia definition: “EDI is a method for transferring data between different computer systems or computer networks. It is commonly used by big companies for e-commerce purposes, such as sending orders to warehouses or tracking their order. It is more than mere e-mail; for instance, organizations might replace bills of lading and even cheques with appropriate EDI messages.” Further: “EDI provides a technical basis for commercial "conversations" between two entities, either internal or external. Note the perception that "EDI" constitutes the entire electronic data interchange paradigm, including the transmission, message flow, document format, and software used to interpret the documents. EDI standards describe the rigorous format of electronic documents.” A clean, crisp definition. But how is a supplier network really that much different, based on how Wikpedia defines it? Hint: it’s not. Yet Google the phrase “supplier network” and you get only 602,000 results, which isn’t exactly impressive given the marketing push that many vendors have put behind the phrase. “Business network” fares better on Google, but the great majority of search results have nothing to do with connecting buyers and suppliers in the post-EDI open standards apocalypse. I smell a disconnect. Pundits like us and solution providers use the phrase supplier network (or business network, if you must). But procurement, A/P and manufacturing organizations do not, unless they’ve been brainwashed by vendors, consultants, or analysts – at least generally speaking. Many haven’t a clue what a supplier network is, nor do they care. They have a set of problems and they want them solved – by whatever means necessary. So here’s a heady thought for Friday: why don’t we just call a network spade a spade and describe these services as something like “EDI networks” or the “new EDI” rather than attempt to hide behind some fancy lingo that few actually care about and even fewer know the meaning of? You know, the folks who actually consume supplier on-boarding, connectivity, e-invoicing and related solutions through an EDI network – I mean supplier network, no I mean business network – environment. For much more detail on the topic without the literary references – but 10X the research and analysis – check our Spend Matters PRO briefs (subscription required): Network Fees and Innovation: Are You Considering Supplier Opinions? Supplier Networks and E-Invoicing: Selection Strategies Emerging In 2013 10 Negotiating Tactics To Reduce Supplier Network Fees (Part 2) 10 Negotiating Tactics To Reduce Supplier Network Fees (Part 1) Ariba, SAP, OB10, IBX, Hubwoo and Basware: Are Supplier Networks Addressing Supplier Risk, Performance and Compliance? The Future of the Ariba Network with SAP (Part 3) The Future of the Ariba Network with SAP (Part 2) The Future of the Ariba Network with SAP (Part 1) What happens when you increase a supplier’s costs? Ariba and SAP…Exploring the Network Elephant in the Cloudy Room I suppose the more folks who invest the time to investigate the topic, the more they'll come to the same conclusion we have: let's label a supplier network what it really is, and make Dr. Johnson proud. Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.