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XML versus EDI

Literature Research Paper

September 2002
Dirk Vanderbist – LIRIS – K.U.Leuven – Belgium
LIRIS – K.U.Leuven
Naamsestraat 69 - 3000 Leuven

Table of contents
Table of contents ________________________________________________________________ 2
Preface__________________________________________________________________________ 4
1 Introduction _________________________________________________________________ 4
1.1 Evolution of the supply chain _____________________________________________ 4
1.2 Business process reengineering __________________________________________ 5
1.3 Current business evolutions ______________________________________________ 5
2 SGML _______________________________________________________________________ 6
2.1 SGML: What? ____________________________________________________________ 7
2.2 SGML: Why? ____________________________________________________________ 8
3 EDI _________________________________________________________________________ 9
3.1 EDI definition ____________________________________________________________ 9
3.2 EDI history and standards _______________________________________________ 10
3.3 EDI technology _________________________________________________________ 11
3.3.1 EDI messages _______________________________________________________ 11
3.3.2 EDI transactions _____________________________________________________ 11
3.3.3 EDI networks ________________________________________________________ 11
3.3.4 EDI security issues and related management issues ______________________ 12
3.4 Costs of EDI ____________________________________________________________ 12
3.5 EDI disadvantages and criticism _________________________________________ 13
4 XML________________________________________________________________________ 13
4.1 XML Definition __________________________________________________________ 13
4.2 XML vs. HTML and SGML ________________________________________________ 14
4.3 XML and metadata ______________________________________________________ 14
4.3.1 XML metadata: what? ________________________________________________ 14
4.3.2 XML metadata: an example! ___________________________________________ 15
4.3.3 XML metadata: advantages and associated technologies __________________ 15
4.4 XML scepticism and criticism ____________________________________________ 16
5 XML and/or EDI? ____________________________________________________________ 16
5.1 XML-EDI comparison ____________________________________________________ 16
5.2 Why is EDI still around? _________________________________________________ 17
5.3 Lessons learned from EDI _______________________________________________ 17
5.4 Hybrid and new XML standards __________________________________________ 17
6 Conclusions ________________________________________________________________ 18
Appendix I______________________________________________________________________ 19
Appendix II _____________________________________________________________________ 19
Appendix III ____________________________________________________________________ 19
Appendix IV ____________________________________________________________________ 20
Appendix V _____________________________________________________________________ 20

XML versus EDI - Literature Research Paper - D. Vanderbist


Appendix VI ____________________________________________________________________ 21
Appendix VII____________________________________________________________________ 21
EDI messages ________________________________________________________________ 21
EDI transactions ______________________________________________________________ 23
Appendix VIII ___________________________________________________________________ 23
Appendix IX ____________________________________________________________________ 23
Appendix X _____________________________________________________________________ 24
XML Metadata ________________________________________________________________ 24
XML metadata: advantages and associated technologies ________________________ 25
Appendix XI ____________________________________________________________________ 26
Appendix XII____________________________________________________________________ 26
XML/edi ____________________________________________________________________ 26
edi-new _____________________________________________________________________ 27
Web EDI ____________________________________________________________________ 27
ebXML _____________________________________________________________________ 27
References _____________________________________________________________________ 29

XML versus EDI - Literature Research Paper - D. Vanderbist


This paper compares Electronic Data Interchange (EDI) and eXtensible Markup Language
(XML). The introduction paragraph provides us with broad view on e-Business to enable us to
understand its current evolutions and allow us to see were EDI and XML fit in those
evolutions. In the second paragraph we will discuss SGML the predecessor of the markup
concepts used in EDI and XML. A detailed insight in EDI and XML is provided in respectively
the third and forth paragraph. Paragraph five presents us with an extensive comparison
between EDI and XML. In the last paragraph we give some arguments to support our thesis
of XML being very suitable for implementation in a paper based and mainframe database
driven company. Since a lot of interesting material did not fit the paper’s limited size that was
moved to the appendices to be at the service of the interested reader.

1 Introduction
In this introduction we give an overview of the ideas and issues behind e-Business to indicate
consequences for e-Business supporting technologies as EDI and XML. This paragraph is
quiet long as introduction but we find it necessary to indicate the boundaries and scope of EDI
and XML supported automation projects. There is nothing worse as implementing
technologies for the mere reason of the technology. There should be a good reasoning
behind every automation process. The following paragraph provides the key elements.

1.1 Evolution of the supply chain

The supply chain of a company is the loose agglomeration of independent but interdependent
companies cooperating to build products (E. Smith, 2000). In an attempt to cut costs
traditional companies moved from monolithic wholes, trying to span the production process
from raw materials to finished products, to supply chain focussed, with more responsibilities
for the suppliers and ending up with a more complex structured buy-side. Companies, warned
in the past about the strategic mistake of becoming to dependent on suppliers, are now
outsourcing more and more non-core functions or are demanding the internal supply chain to
operate and produce at competitive prices by that leaving the possibility open at all times to
outsource inefficient parts of the internal supply chain. It is still easier to drop an inefficient
supplier then to make a division more cost-effective.

This focus on costs leaded to a disintermediation effect with the objective of removing all the
non-value adding elements from the supply chain. Companies will try to buy from the
supplier’s supplier if the supplier does not add any value to the product it supplies. Dropping
the idea that one company should built a complete product has left the companies with a
reduction of production cost pushing responsibilities off to suppliers but also introducing a
new set of problems: coordination problems and the risk of incompetent suppliers. To be
profitable supply chain have to be organised efficiently.

At the other side, sell-side, we find more demanding customers that companies try to please
by means of continuously renewed product lines which are customer personalised leading to
shorter product lifecycles, a shorter time-to-market and shorter production times. Also a good
customer service, organised within the companies Customer Relationship Management
(CRM), has become as important as quality and price.

All this can only be achieved if all elements of the supply chain are geared to one another.
Business partners in the supply chain need to pass information about sales forecasts,
production and delivery. This is typically information found in Enterprise Resource Planning
systems (ERP) guiding the company’s production. The information makes it possible to adjust
delivery and production processes to each other, as described in Just In Time (JIT) delivery
systems where responsibility is put on suppliers, resulting in lower stock, faster delivery,
faster trading cycles and faster cash flows. All this is organised within the Supplier
Relationship Management (SRM).

XML versus EDI - Literature Research Paper - D. Vanderbist


To allow for the production to be in sequence with other supply chain partners there is the
need for tuning ERP systems of these partners by means of Supply Chain Management
(SCM) systems. This tuning of the ERP systems can take shape as simple passing paper
document as before, up to integrated intelligent ERP systems. To indicate the importance of
passed information between business partners, information is sometimes introduced (Van der
Vlist, 1994, p.17) as a fourth production factor besides natural resources, capital and

This need for information exchange can be resolved in several ways. Hofman (Hofman, 1989,
p.14) identified four stages in the automated information exchange between companies as
organised within SCM systems (see Appendix I). The final stage is the full integration
between the internal system of the company and external systems of the business partners
based on electronic communicated documents.

Systems in the latest stage can be subdivided in two categories. Firstly, those were human
intervention is needed, and the basis or initiative, for documents passed between the
systems. Secondly, the intelligent SCM systems were human decisions are replaced by
automated decision based on, within the system integrated, business rules, deduced from
business processes.

The reason why not every company is capable of making an integrated supply chain
profitable is the lack of technology to make the necessary coordination possible. Integrated
systems for flexible information interchange between business partners are not cheap and
Small and Medium Enterprises (SME-s) can not always afford these systems. The direct
integration of ERP system is out of the question because the systems are developed for inter-
company operations. It is very difficult to enable ERP systems to communicate directly. It
means that an interface for each business partner’s ERP system should be developed. This
problem is tackled by providing an interface to one standard information format and
exchanging messages in this format.

An important remark to make here is that companies focussing on their supply chain may
forget to look at non-core industry related suppliers. These are the suppliers of the indirect
materials, e.g. suppliers providing in office supplies, opposed to the direct materials. Also in
these ‘supply chains’ major savings can be achieved. These savings are more based on the
opportunities of an integrated system then the chain effect of tuning production processes as
in common supply chains. In the office supplies example it is done by implementing a system
for grouping office supply orders and avoiding every department searching its own suppliers
and placing ad hoc orders (Microsoft, 2002).

1.2 Business process reengineering

Every implementation of integrated system, SCM or other, to support the supply chain should
be considered as a business-process reengineering project. It basically boils down to this:
“Garbage in means garbage out!”. Trying to automate an inefficient business process results
in the optimisation of its inefficiencies. Only by having the business process checked and
reengineered we can enjoy the real benefits of integrated supply chain systems. Some
important question considering the business process should be answered before the
automation process takes place (see Appendix II).

When intelligent SCM systems are used there is a change in the company’s way of thinking.
Traditional decisions are taken top-down the hierarchical ladder and actions are approved
bottom-up. Now we are looking at computer systems thinking by themselves.

1.3 Current business evolutions

Nowadays every company claims to be following the e-Business track. Since the term e-
Business is very marketing related trying to cover every sale system with a computer system
involved it can be useful to show some definitions for the term.

XML versus EDI - Literature Research Paper - D. Vanderbist


“E-Commerce is the supply, demand and maintenance of services and goods, by means of
a up-to-date data and communication technology, integrating the communication with the
ultimate consumer and closing the products life-cycle circle.” (B. Dekeyser, 1999)

“E-Business is a secure, flexible and integrated approach to delivering differentiated business

value by combining the systems and processes that run core business operations with the
simplicity and reach made possible by Internet technology.” (IBM, 1997)

Summarising the previous definitions we could say it’s all about integrating business
processes based on SCM, ERP and CRM. It is important to notice there is nothing said about
standards or formalised ways of communication. These aspects are the sphere of activity of
EDI and XML as discussed later.

Currently three stages in electronic business can be distinguished going from e-Marketing to
e-Business (see Appendix III). Within e-Business a distinction is made between Business To
Consumer (B2C), retailing to consumers, and Business To Business (B2B), providing goods
and services in supply chains from one business to another.

E-business is the most suitable for B2B as it focuses on integration of systems dealing with
the business processes. E-business in the context of B2B in a formalized and standardized
way is sometimes called Enterprise To Enterprise (E2E) e-Business. It’s in E2E systems we
find EDI and XML. The main goal for all these system is the quest for interoperability:
exchange complex business information without extensive pre-alignment negotiation of
business semantics.

E2E systems for indirect materials are causing less problems to set up then for direct
materials. This because with indirect materials (office supplies) you know what you are going
to get in contrast with direct materials which are business critical goods and services (raw
material) where quality and timeliness is important. The latter aspects are difficult to
automate. There is also a difference in approach depending on the company is on the buy-
side or sell-side of the transaction. On the buy-side a company wants automatic procurement,
quality and timeliness that favours point-to-point communications systems because of the
complexity. The more clients the more expensive the system becomes here. On the sell-side
a company wants to sell to as many as companies as possible offering easy ordering, order
tracking facilities and automatic triggers based on inventory analysis. It is in these areas
companies expect answers form EDI or XML. Overcoming these differences between
suppliers and buyers is considered the task of e-Marketplaces where buyers and suppliers
are brought together based on mutual agreement about transaction properties.

In this paragraph we will discuss the Standard Generalised Markup Language (SGML). Since
SGML is the predecessor of the markup concepts used in EDI, Hyper Text Markup Language
(HTML) and XML (see Figure 1), it is logical to discuss SGML here after the introduction,
where EDI and XML standards were identified as drivers for business-process reengineering
project to realise new efficient supply chains, and before the following paragraphs, dealing
with EDI and XML. SGML drives the dichotomy between content and representation to the
maximum as expressed by the write-one-reuse-many-times concept explained below.

E-commerce is used here in the E-business sense.
e-Business based on human interaction is mostly organised from the marketing department
whereas in the situation of EDI and XML messages are formalised to minimise the human
involvement we see a shift of organisation to the information systems department. The latter
is a faceless technology running in the back and integrated within systems. The former is
more visible through web page front ends. This distinction often leads to the lack of strategy,
duplication of resources and lost economies of scale.

XML versus EDI - Literature Research Paper - D. Vanderbist


The use of markup concepts is less evident in EDI. EDI documents have an implicit structure
based on strict positioning and ordering of characters in the document where the semantic is
based on the position and order of the characters whereas in XML the markup concepts are
made explicit by tagging parts of the document. For SGML’s point of view a EDI document
could be considered as generated output document were tagged items are replaced and
formatted according to a style sheets as explained in Figure 2 of this paragraph.


Figure 1: The relations between different standards

2.1 SGML: What?

SGML, as defined in the 1986 ISO standard 8879, has taken descriptive markup to a level
beyond reach of any other markup language. SGML defines the role of each piece of text in a
formal model so each piece can be checked. The metadata provided by a formal model, a
Document Type Definition (DTD), allows for validation of the correctness, “Should that piece
of text be used here?”, and the completeness, “Are all the necessary pieces of text present?”,
of documents.

Metadata is introduced in document by means of tagging text parts this is adding uniquely
identifying leading and trailing characters to each text part. Once a document has been
defined in SGML the markup task is offloaded to the computer making integrated document
production systems possible. SGML follows the write-one-reuse-many-times concept. If the
markup of the document changes you should be able to change the markup without having to
rewrite the document. All the formatting of the document’s elements is separated into a
distinct structure organised by means of the Document Style Semantics and Specification
Language (DSSSL). The idea behind DSSSL style sheets is encapsulating all the information
needed to format the elements of a SGML document when they are to be processed for
output (see Figure 2).

SGML was not designed as a standardized way of coding text since it is impossible to devise
a single coding scheme that would suit all languages and all applications. SGML made it
possible to pass information from one document to another because it is able to describe the
document’s logical structure whether it is a form, memo, letter, book, …

The tagged text parts identify entities that are elements, objects or things. An entity can
contain or be contained in other entities and can be described by means of set of attributes. It
is important to notice that, in contradiction to HTML, not only the representation or
appearance of entities is tagged but all meaningful aspects of the document.

To allow the computer to do as much of the work as possible SGML requires users to provide
a model for the document being produced. The model, called a DTD, describes each element
of the document in form that the computer is capable of identifying and understanding. To
allow the computer to correctly identify where each part of document start and ends SMGL
requires a SGML Declaration wherein is declared what the tags look like. What characters or
codes have been used to delimit markup sequences. This meta-syntax of the document

The Arrows hold the meaning “is being influenced by”.

XML versus EDI - Literature Research Paper - D. Vanderbist


elements is what SGML is all about. SGML does not use a predefined set of tags or a
standardized template for particular types of documents.





Figure 2: Steps in generating an output document form a SGML document

For an example of a SGML documents take a look at Appendix IV

SGML-coded files are by nature ideal for storing in databases. These documents contain a
hierarchical as well as a object-oriented structure that can be mapped onto virtually any type
of database.

2.2 SGML: Why?

Because the way data is stored in SGML document they are interoperable allowing them to
be used in a wide range of hardware and software environments. Because of its logical
structure SGML document are capable to cope with changes.

If more detail is required some tags are added to the document’s model and add the needed
information to the model instance.

If a completely new style is required the document is linked to a new DSSSL structure. Not
one bit of the document’s content is changed in contrary to every What You See Is What You
Get (WYSIWYG) type of word processors.

These properties make SGML formatted documents a very good standard for business
related documents. To summarise: (M. Hoenicka, 2002)
§ SGML is platform independent:
SGML is hardware and software independent.
§ SGML is vendor independent:
SGML does not have a proprietary file format limiting the data to a single application.
Since it is metalanguage it is independent of any applications whatsoever.
§ SGML is extensible:
Allowing users to introduce new improved document format without risking
incompatibilities with previous versions. SGML has an extensible tag set which
makes it future proof.
§ SGML is ISO-standardised

Looking at all the advantages one may wonder why SGML is not being considered as
standard for business document over the World Wide Web. The answer is simple. In all the
effort to be independent and future proof SGML became rather complex and to heavy to built

Mind the subtle difference between SGML as standard for document processors vs. word
processor tools like MS Word. The conceptual meaning of groups of words is (often) lost
within word processor contrary to document processors.

XML versus EDI - Literature Research Paper - D. Vanderbist


into standard web browsers making it impossible to deploy business related document to end
users by means of SGML.

In this paragraph we give an overview of EDI to confront it, in the 5-th paragraph, with XML.
There we will try to answer the question: “EDI is old but is it still ok?”.

3.1 EDI definition

The EDI standard was developed around 1982 and is in use since 1985 as standard to
support doing business by means of passing electronic document between business partners.
EDI can be defined as:
“Computer to computer exchange of structured data. Formatted to allow automatic
processing without manual intervention.” (E-centre, 2002, Electronic Data Interchange),
or as:
“Electronic exchange of structured and normalized data between computer systems of
different partners” (F. Put, 1998).

These definitions point to the concepts behind EDI. Messages passed between parties are
compressed based on unambiguous identification and agreed representation of data. EDI is
not the same as e-Business as it tries to limit human involvement or interventions, whereas in
e-Business it is about doing human-involved business computerized with unstructured
messages. EDI messages are structured for communication between computer without any
human intervention as such they have a compressed non-human-readable format. The
advantage of EDI messages is that it overcomes the proliferation of bilateral agreements on
message syntax and semantics between trading partners. In the former we have one
agreement to exchange EDI message between n trading partners in the latter we haven n
agreements to use a specific message standard between n trading partners. With growing
numbers of trading partners, n, the latter is not a feasible solution.

The use of electronic document has some advantages to paper documents besides reducing
the paperwork. Because no data is re-keyed from document into a computer system no errors
can occur in the passed data between business partners. These inaccuracies in messages
passed between humans cause delays and additional costs incur if orders or requests are
executed wrong. With electronic documents these ambiguities disappear leading to more
certain supply chains, shorter lead times, lower stocks all resulting in a better service provided
to the customer. EDI systems can always be available contrary to the office ours with human
involved systems. EDI is said to make the business processes more streamlined driving
efficiencies across the company’s boundaries (for other advantages see Appendix V)

Company A Company B


Internal Business Internal Business

Applications Applications main point
of EDI
EDI EDI integration
Translator Translator

EDI Message EDI Message

Send Control Receipt Control

Communication Channel
Figure 3: EDI messages passed between companies (B. Dekeyser, 1999)

EDI is considered as part of the application layer of ISO’s OSI model (F. Put, 1998).

XML versus EDI - Literature Research Paper - D. Vanderbist


Implementations of EDI occur in situation of co-makership or co-shipership where partners

produce or transport products together. EDI implementation can be found in a wide range of
business areas (Appendix VI).

3.2 EDI history and standards6

Most documents about EDI trace its history back to 1948 to Berlin Airlift. They are considered
the first to coordinate airfreighted consignments of food and consumables by using a standard
manifest overcoming difficulties as languages differences, number of copies, …

In the USA we see in the 1960-s the first electronic transmission in transport industries with
lots of proprietary standards lead to the foundation in 1968 of the United States
Transportation Data Coordinating Committee (TDCC).

At the other side of the Atlantic the Department of Customs and Excise of the UK was also
developing a standard called Tradecoms. This standard was later extended by United Nations
Economic Commission for Europe (UN-ECE) into the General purpose Trade Data
Interchange Standards (GTDI).

With the 1970-s the general acceptance of EDI came. TDCC translated the available
proprietary standards into one, 1974-1975. The first implementations were realised in the
hospital supply and grocery industry. TDCC’s efforts provided the basis for the X12 standard
of ANSI realised in the period 1978-1988.

The use of EDI increased dramatically and implementations in automotive industry were
realised. The transatlantic differences were cleared in the United Nations Joint Electronic
Data Interchange Committee (UN-JEDI) revising the EDI data element dictionary, 1983-1984,
that lead to widespread EDI For Administration, Commerce and Transport (EDIFACT)
standard, 1985-1988. Also government bodies became increasingly intressed in EDI.

EDIFACT is considered one of the driving factors of the European unification.

Currently there are tree dominant EDI standards:
§ W. Europe: EDIFACT (sub-standarded in UK-TRADECOMS, EANCOM and Simpl-
§ North America: ANSI X.12
§ Australia and New Zeeland: United Nations Trade Data Interchange (UNTDI)

The idea behind most of the EDIFACT sub-standards is trying to simplify the original
EDIFACT standard. Simpl-ed is a good example of such simplified subset. It tries to simplify
EDI messages by moving redundant or stable information in those messages to master files
instead of passing this information with every message. Most of the master files can be
exchanged prior to real EDI communications and can be kept from that point synchronised
only transferring occasional changes of those master files.

Based on R. Clarke, 1998
EDI system vendors were against those international EDI standards because it breaks down
their monopoly as locking-in customers into non-standardised proprietary systems becomes
more difficult.

XML versus EDI - Literature Research Paper - D. Vanderbist


3.3 EDI technology

Before we can start using EDI some detailed agreements must be made. Firstly we should
select a message standard, a network provider and software to support EDI. Secondly a data
alignment process between the trading partners should take place in which they also decide
the EDI message type they will use. The introduction of EDI starts a complete business-
process reengineering project looking to the required development or adaptation of software
or hardware.

3.3.1 EDI messages

We will not present any EDI document as this would lead us to far. There are just to many
EDI message standards that it is futile trying to explain one. In Appendix VII an example can
be found.

3.3.2 EDI transactions

EDI transactions hold following properties:
§ Atomicity: the whole transactions is carried out or nothing is changes
§ Permanency: done is done, once carried out a transactions can not be undone
§ Consistency: the parties are information about a transaction progress is kept
§ Isolation: every transaction is an entity on its own

These properties are guaranteed by the EDI message protocols guiding the order and
meaning of messages sent in order to realise EDI transactions.

3.3.3 EDI networks

EDI can be used in combination of different type of networks. Actually any electronic medium
that is capable of storing messages can be used for EDI. For example magnetic tapes or
removable disks can be used when large amount of data have to be transferred from one
system to another in situation were transfer time is not an issue. The requirements of the
network depend on what type of EDI is being deployed: from off-line EDI to real-time EDI.

In the early days most EDI application used direct connections between business partners by
mean of modem lines ore leased lines. These point-to-point systems were fast and are very
reliable since only two partners are involved but needed the two partners to be on-line at the
same time. When more business partners are connected to the system the number of point-
to-point connections grows exponentially enforcing the switch to store-and-forward message
systems based on a EDI Value Added Network (VAN) provider. These networks are based on
connection companies to a shared communication channel of the VAN provider and setting
up EDI post boxes.

These VAN-s are costly compared to direct connections but VAN provide services as tracking
messages, providing access for different types of computers and allowing different types of
network protocols. There is no need anymore for two parties to connect directly. They only
need to be able to connect to the VAN and process EDI messages. VAN-s are slower as
connections are not direct anymore and the communication channel is shared but it solves to
problem of parties having to be on-line at the same time in order to exchange EDI messages.

… …
Figure 4: point-to-point (left: n-n) vs. EDI VAN (right: n-1)

XML versus EDI - Literature Research Paper - D. Vanderbist


8 9
VAN are not only used in store-and-forward systems but also in real-time EDI systems that
require immediate response communication e.g. JIT delivery systems or booking systems.
The EDI message may be the same but the required service of the VAN is different. The
quality of the VAN’s speed can be part of a Service Level Agreement (SLA). In the store-and-
forward situation it is possible that companies batch EDI messages of the latest 6 to 12 hours
and sent these in batch over the VAN. This is called Batch EDI. Internet EDI, as discussed
bellow, made it possible to realise EDI transaction in less then 6 minutes. To speed up
transmission a context is build up by removing redundant information (cf. supra the master
files concept).

To support EDI messages over e-Mail we need software and mailboxes capable of automatic
opening and processing EDI messages received. For this reason Multipurpose Internet Mail
Extensions (MIME) has been expanded with new headers to identify EDI messages.

Since the 1990-s the Internet was added as possibility for transporting EDI messages called
Internet EDI. The advantage of using the Internet is it has a very low access costs, it runs on
the widely adopted TCP/IP protocol and can be accessed from almost every place in the
world. Up to 1994 running EDI over the Internet was not considered possible because of lack
of security, slow transmission speed and unreliable network. Because of the low access costs
a shift in the use of EDI can be recognised here. EDI traditionally focuses on low value high
volume types of transactions. The low access cost to EDI networks allow companies to switch
to high value low volume types of transactions as in temporary projects. A company can
subscribe to an Internet EDI network and sign off on project completion.

3.3.4 EDI security issues and related management issues

EDI messages can be passed in a secure way to ensure confidentiality, refutability and
integrity of the message’s content. Integrity is about the message content integrity as well as
the transaction integrity. To ensure the message’s integrity a hashing algorithm is released on
the message’s content what is undone on receipt of the message by the other party. To
enforce transaction integrity messages are equipped with a sequence number and both
parties of the transaction are authenticated based on digital signatures. Transaction integrity
tries to overcome problems when EDI messages are lost, sent unwillingly or duplicated.
Confidentiality is realised by encrypting messages. To avoid refutability parties can require
every message, sent as part of a transaction, to be confirmed. All these security issues can
be part of the SLA with the VAN provider (more details in Appendix VIII).

3.4 Costs of EDI

First we will look at EDI over VAN. Latter in this section we will consider the effect of using
EDI over Internet.

The cost of implementing an EDI system can be divided into two parts. There is the initial
investment, that are sunk costs once spent, and there are annual returning costs.

The initial investment consists of the EDI software and adaptation of business application for

EDI software is expensive: (B. Dekeyser, 1999)

§ PC software: € 2500
§ UNIX/WinNT software: € 25 000
§ Mainframe software: € 500 000

These costs do not include any form of consultancy for adapting business application to
communicate with the software. The costs of the software is considered to be 20% of the total

Mostly implemented by means of the ISO X.400 protocol (e-Mail protocol).
Mostly implemented by means of the ISO X.25 protocol (Internet protocol)

XML versus EDI - Literature Research Paper - D. Vanderbist


cost to integrate EDI within the company’s business applications and making organisational
arrangement with business partners.

The annual costs cover the expenses for using a VAN. These recurring costs consists a
yearly fixed maintenance fee for the used network infrastructure and a variable cost for
passing message over the network. For the variable costs different tariff plans are used. Then
can be based on the amount of data sent, the “weight” of the messages, the amount of
messages sent, envelope costs. Some charges will be added depending on the SLA with the
VAN for conversion of EDI messages, authentication, interconnection with other VAN-s, …

If we look at this cost structure we see EDI introduces yearly recurring fixed and variable
costs while the profits depend on the variable volume of EDI messages (meaning trade). It is
obvious that with these results SME-s are not very happy to plunge into EDI. One of the
immediate benefits of EDI For SME-s is that they have access through EDI to transatlantic
capital enabling theme to compete with the big companies in the market.

The cost of Internet EDI is about one-forth of traditional VAN EDI (M. Meeker, 1997). The
price varies with the speed of the communication lines bus must ISP-s use a flat fee
independent of the amount of transferred bytes or messages and no ISP interconnections
costs are charged. The disadvantage is that an ISP only can guarantee the quality of the
access point and not the whole Internet. Internet is because of these costs a better feasible
solution for SME-s.

3.5 EDI disadvantages and criticism

In the following list we give a summary of the criticism on EDI (for the expanded list see
Appendix IX):
• EDI is costly to set up.
• Not every trading partner is willing to participate in the network.
• Social problems may occur when the company’s personal may fear EDI will make
their jobs superfluous.
• EDI itself will not make a business process more efficient. It will enhance the
performance of an efficient business process.
• EDI focuses on communications within the supply chain.
• EDI standards are to complex trying to integrate every existing business process or
• EDI messages are not human readable making EDI implementations harder to
• EDI is too rigid to follow dynamic changes.

In this paragraph we will describe XML and look at EDI-XML hybrid standards to conclude
with a comparison between XML and EDI. What do they have in common and what not.

4.1 XML Definition

XML provides a standardized and easily customisable way of describing structured data and
exchanging this data with business partners. XML is based on the SGML standard. XML as
sub-set of SGML tries to optimise SGML for delivery over the web. XML lacks document
creation capabilities not document delivery capabilities and as such will never replace SGML.
XML inherited a lot of the qualities of SGML.

Some remarks in that context are “Internet does not have a 0800 phone number as with
VAN-s” and “We outsourced the protocol trouble to our VAN provider” (B. Dekeyser, 1999)
B. Bos, 1999 and E-centre, 2002

XML versus EDI - Literature Research Paper - D. Vanderbist


XML adds meta-data to documents by means of tags enabling a focus on semantics and
syntax based on the validation of those tags. The tags used are not predefined. A user can
define any tags according to his need of identifying a certain element within the document. At
any moment in time the set of tags can be extended. This extensibility makes XML very
flexible in use. The way tags are used within XML enable documents to be platform and
software independent. The support of Unicode adds language independency to that list. XML
is said to provide truly integrated and portable systems (E-centre, 2002, XML Basics).
Because of the tag structuring XML does not affect the possibility for humans o read and
understand the XML formatted documents. XML documents are not using any form of
compressing based on implicit positions or data element order. No optimisations for speed
nor for space are used.

XML is not a programming language it is only a method for structuring, storing and sharing
data. XML itself does not prescribe how it should be used in business processes.

Is XML really a web-technology is a frequently asked question. The fact that any data can be
passed over a TCP/IP network made some critics say that XML is not more than a new
attempt of B2B system suppliers to oil there business after the failures of other technologies.

Because XML runs over a TCP/IP based protocol it can be used in every TCP/IP based
network. This means the Internet, many-to-many communication channel, but also private
one-to-one communication channels or private one-to-many broadcasting channels.

4.2 XML vs. HTML and SGML

Here we will look at the relation between XML, HTML and SGML (see also Figure 1) to
identify why XML was a necessity and HTML and SGML were not suitable.

“HTML is a simple presentation technology for documents and files through the Internet” (E-
centre, 2002, XML Basics). It has good formatting possibilities based on built-in styles and
allows for easy linking and programming. Also forms are no problem for HTML. It is quick and
easy but not suitable for business documents because of several reasons.

HTML it is based on a limited set of formatting tags. This set of tags cannot be extended and
mixes presentation and content semantics limiting the possibilities for reuse. This lack of
structures does limit interchange possibilities based on the fact there is nothing to identify
data elements within the document. Because of the limited set of tags support for automation
or guiding search engines in a narrowing down search are impossible. These limitations of
HTML should not be seen as bad design. The purpose of HTML, during the development in
1990, was to provide an easy and quick way for distribution documents placing the least
possible pressure and web browser’s resources however at the expense of some semantics.

A solution the semantics problems of HTML could be implementing support for SGML into
web browsers. Whereas HTML was to light to be usable SGML is to complex to be
implemented into a web browsers. SGML processors are large processors.

In 1998 XML was introduced as solution. It is a stripped down version of SGML small enough
to fit into a web browser but intelligent enough to cope with metadata used in the document’s
syntax and semantics.

4.3 XML and metadata

4.3.1 XML metadata: what?
The power of XML is the metadata passed along with the XML document. As with SGML,
XML uses a DTD or the recently introduced XML Schema for document validation. A DTD or
a XML Schema is not required. Documents are checked for correct syntax and for correct

XML versus EDI - Literature Research Paper - D. Vanderbist


semantics. In situations were informal, one-of-a-kind, documents are processed the only
requirement for the document is it should be well formed meaning it is conform XML syntax.

DTD-s are a legacy of SGML and are more and more replaced by XML Schema in which
some restricting aspects of DTD-s are resolved. A problem with DTD-s is that they have
their own syntax that needs to be processed separately opposite to XML Schema what
follows the XML format and does not need a separate processing mechanism besides the
one handling the XML document. XML Schema allows data types to be validated and
provides in name spaces. Name spaces are groups of XML data elements grouped together
because of a related purpose. It is possible to store namespaces in repositories and
organisations can provide them for special purpose documents.

4.3.2 XML metadata: an example!

An example of XML documents is provided in Appendix X.

4.3.3 XML metadata: advantages and associated technologies

The major advantage of metadata embedded in XML formatted documents is it enables data
from different sources to be shared. XML marks data solving interoperability problems
between computer systems, applications and databases. This makes XML perfectly suitable
to handle transaction related processes: receive some data, validate it and store it in a
database. XML means for distributed data what SOAP and CORBA means for distributed OO





Figure 5: Steps in generating an output document form a XML document

As we found DSSL in SGML to remove all document formatting issues from the document
itself we have eXtensible Style sheet Language (XSL) in XML. It will not come as a shock that
XSL is based DSSL. If you compare Figure 5 to Figure 2 you will find an exact mapping
between those two figures (Appendix X).

Well formed documents: (J.R. Borck, 2000)
§ the first line identifies the XML document type
§ documents contain at least one element
§ every tag is closed
§ tags may be nested do not overlap meaning the closing tag of a sub-element is
closed before the super-element closes
For example: DTD is very limited in describing data type of data elements. It is not possible
to identify numeric ranges or sets.
XML is currently considered for use in passing objects: object data and content of methods
to be used with the object data. XML is not yet OO. For example it lack the possibility of

XML versus EDI - Literature Research Paper - D. Vanderbist


4.4 XML scepticism and criticism

There is still a lot of scepticism about XML. One of the reasons for that is the fact in XML we
find the same proliferation of standards – Europe Article Number Uniform Code Council
(EAN-UCC), Global Commerce Initiative (GCI), United Nations Centre for the Facilitation of
Procedures and Practices for Administration, Commerce and Transport (UN-CEFACT) – as
with EDI. IT managers are wondering if it will get standardised one day. The problem with
international standards is that it takes time to develop and there is pressure on companies to
use quick-and-dirty solutions to solve daily operational problems until the international
standards get finished. In the end we see a lot of those companies never abandon those early
quick-and-dirty solutions once the standard gets to an acceptable level of usability. Also
vendors realise this a try to gain from these interoperability between systems providing XML
dialects to are not able to communicate beyond the border of their domain.

XML is often being criticised because of its initial problems with data structures in DTD-s. As
indicated in paragraph 4.3.1 most of those problems are resolved in the XML Schema-s. XML
document are not very flexible in allowing exceptions, e.g. “a paragraph can contains
appendix references except for the appendix paragraphs”, in structures and for the and-
content model, “element A and element B and element C are needed in any order” (A. Arbor

A final reoccurring remark about XML is that document are not optimised for size. Including
tags as text elements into document spills bandwidth and augments transmission. This
remark was pertinent in the early years of the Internet but with the currently available
bandwidths and network speeds the remark becomes less and less a point for not using XML.
It is increasingly more important to have readable document then compressed
incomprehensible size optimised documents.

5 XML and/or EDI?

In this paragraph we want to put XML and EDI next to each other to make a comparison
between the both. The most pertinent question we will try to answer is “Why is EDI still around
while XML claims to solve all the EDI related problems?”.

5.1 XML-EDI comparison

Table 1: XML-EDI comparison (adapted from J. Ricker et al, 2002)
§ optimised for easy programming and § optimised for size (XML messages is
readability ten times the size of EDI message)
§ requires a web server ($ 5000) § requires dedicated EDI server
($10 000 up to $ 100 000)
§ uses the Internet § uses VAN
§ low initial investment § high initial investment
§ has an easy to learn file format, § has a complex hard to learn file
document are self describing format, documents have exact
defined format
§ requires simple programming staff § requires highly trained C++
§ freely available tools (downloaded § expensive tools
from the web)
§ computer-computer & human- § computer-computer communication
computer communication
§ standard under development § established standard
§ basically a message standard § basically a message and business
process standard

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Table 1 explains to most frequently identified differences between XML and EDI. Whereas
EDI is considered to complex or to expensive, especially for SME-s, XML is said to realise
EDI vision of lowering the cost and complexity of exchanging business document between
business partners.

EDI and XML have common goals within the business-process reengineering concepts. They
both want JIT based delivery to reduce stocks. This is only possible if documents can be
processed in an error free way based on avoiding paper documents.

EDI and XML suffer from the some problems. Firstly, both have slow evolving standards
luring IT managers into overcoming current IT problems by means of quick-and-dirty
solutions. Secondly, both have to focus more on SME-s. As indicated in paragraph 3.5 SME-s
represent only 20% of the business value, but are responsible for 80% of the transaction
costs due to inefficiencies. Thirdly there the social, judicial, security and business related
issues related aspects already identified in paragraph 3.5: business partners must want to go
along. transactions must be made judicially enforceable creating a liability relation between
the communicating parties, the social impact of removing intermediates and the company’s
agency problem, reliability and security aspects of the used network.

5.2 Why is EDI still around?

EDI has history going back to 1970-s and even before those years. This history resulted in
stable and fast, be it complex and expensive, systems. EDI is tested, understood and
entrenched based on accepted standards (F. Kenney et al, 2002). This stability makes it
suitable for business critical processes. The only reason for changing to XML would be that it
would enable a company to reach more trading partners.

5.3 Lessons learned from EDI

A summary of lessons learned from EDI (extended version of the list is presented in Appendix
§ Create something what is stable and has a focus on removing inter-enterprise trade
barriers. Do not try to standardise all documents in all sectors because the result will
be complex and not workable.
§ Considering data a lesson learned is that one should identify everything. Meta-data
should be used in documents to identify data elements. On the level of transactions
there should be a means of identifying all the documents belonging to one
§ Try to overcome thinking in documents. EDI’s focus is fixated on documents
sometimes forgetting the business processes behind those documents. A said before
the technology only makes sense if the business process are optimised and
reengineered before being implemented by means of technology.
§ EDI contains valuable information because it has been in business for some time
o content requirements: data items, data definition and data processing rules.
o process requirements: how to handle data by means of business processes.
o how to manage the development of a standard

5.4 Hybrid and new XML standards

The discussion of hybrid and new XML standards would lead us to far and is entirely covered
in Appendix XII.

In March 2001 UN-EDIFACT made a real shift in thinking accepting for the first time Data
Maintenance Requests (DMP-s) for changing the standard.

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6 Conclusions
In this conclusion we want to discuss the suitability of XML in supporting a company with a
large mainframe driven database in background and paper based supply chain in the
foreground. It is our opinion XML is suited in this situation. This opinion is supported by the
concepts behind XML, and SGML in which XML find its basis, as presented in previous

In paragraph 2.1 the following text can be found: “SGML-coded files are by nature ideal for
storing in databases. These documents contain a hierarchical as well as a object-oriented
structure that can be mapped onto virtually any type of database.”. In paragraph 4.3.3 we find
the following: “XML marks data solving interoperability problems between computer systems,
applications and databases. This makes XML perfectly suitable to handle transaction related
processes: receive some data, validate it and store it in a database.”.

XML systems are naturally suited for three-tier architectures. The front-end of the system
consists of a web-interface allowing the presentation of the XML documents as HTML
documents to the web client of the user (business partners in our case). In the middle tier
we have a web server, a XML parser, a transaction processing monitor and an application
server. The web server servers the HTML document, generated by the XML parser, to the
web client. The XML parser generates HTML documents based on XML documents provided
by the application server. The application server combined with the transaction monitor drive
the XML transactions. The application server retrieves and saves data about business objects
that are stored on persistent storage in the mainframe database. The business applications,
ran on the application server, achieve this in communicating with the mainframe database’s
Data Management System (DBMS).

There is chance that the company already has a web server for marketing purposes. Than the
only investments to be made are in making the paper document handling systems ready to
handle electronic XML documents. Because the existing system is client-server based we can
assume that the Human Computer Interface (HCI), the client, for keying in paper documents
is separated from the application processing the keyed-in data, the server. It is just a matter of
replacing or supplementing a new electronic-document processing client to the system.

The new interface for the XML documents can be a web based interface making the company
open for a broader range of potential clients. It also can be a low level interface without a
visual component waiting the process document sent through a communication channel by
the business partners. The choice depends on the internal-external integrated level of the
partners’ systems. Some of the investments will be recuperated in the lower cost of handling
less paper documents.

We assume that a web client is used as human computer interface. Any other interface
could be used. In all the cases a XML parser will transform the XML document in a format
acceptable for communicating with the user through the interface.
If the existing system was developed according to good programming practice, the system
should not be influenced by the order the data is entered. This overcomes any problems in
order or timing in which data elements come from the paper document based system or the
electronic document based system.

XML versus EDI - Literature Research Paper - D. Vanderbist


Appendix I
(Hofman, 1989, p.14):
§ No automation: The company receives paper documents from and sends paper
documents to its business partners. The documents are internally treated as paper
§ Internal automation: The company uses internally a computer system. Documents
arriving from business partners are keyed in the computer systems and printed
documents are sent to business partners.
§ Electronic communication: The company uses internally a computer system.
Documents are electronically communicated with business partners but the
communication system is not integrated within the internal system. Information is
copied from and to the electronic documents to and from the internal system.
§ Integrated communication: Integration between the internal system of the company
and external systems of the business partners. Documents are communicated
electronically and systems communicate through interfaces without the need to re-
enter communicated information.

Appendix II
(E-centre, 2002, XML basics)
§ How much of the business process is simplified in more data is shared in advance
rather then transferred? (shared repository idea cf. infra)
§ How much of the business process is simplified by assigning the responsibility of
each activity within the business process to one partner responsible for the
successful completion? (transaction and/or message protocol idea cf. infra)
§ Does each business transaction corresponds to a single business process in the
supply chain? (decoupling aggregated processes idea, level of granularity)

Appendix III
(B.Cremilie, 2001):
§ e-Marketing: on-line catalogue to promote products
§ e-Commerce: e-Marketing and on-line ordering system
§ e-Business: e-Commerce, intranet and extranet access for business partner to the
company’s computer system, order tracking, shipping and freight handling, …




Figure 6: Relationshop between different types of electronic businesses

E-commerce system’s focus is on B2C mostly organised as web-storefront. In web-storefronts

there is a web based on-line catalogue where customers can place orders. The web-
storefront is connected to the company’s internal order handling system. For B2B this solution
is inadequate as companies still need to find suppliers manually surfing the web and placing
orders manually.

The later on discussed EDI and XML techniques fit in this category.

XML versus EDI - Literature Research Paper - D. Vanderbist


E-commerce portals are more suitable for B2B because companies are offered combined
product catalogues in one website what allows for faster searching the wanted products. The
orders are still handled manually.

Most E-commerce portals are organised by a third party businesses. The trouble with this
type of organisation is that a company has to pass on business critical information to this third
party, it is depended on the third party to place or retrieve orders from the portal and portals
charges money for the provided service. Companies view this as having to pay for accessing
their own information what is good for the time being but no long-term solution.

Appendix IV19
SGML Document:
<to>All Staff</to>
<from>Martin Bryan</from>
<date>5th November</date>
<subject>Cats and dogs</subject>
<para>Please remember to keep all cats and dogs indoors tonight</para>

SGML DTD Elements:

<!DOCTYPE memo [
<!ELEMENT memo O O ((to & from & date & subject?), text) >
<!ELEMENT text - O (para+) >
<!ELEMENT para O O (#PCDATA) >
<!ELEMENT (to, from, date, subject) - O (#PCDATA) >

The previous DTD defines a memo in all its consisting parts. The second line says that a
memo consists of a group of elements, to, from, data and optionally a subject that can occur
in any order followed by a text. The body of the memo, text in line three of the DTD, consists
of one or more paragraphs. The O-s and hyphens indicate if the beginning and ending tags
are respectively compulsory or can be omitted. It is possible, although not shown in the
example, to indicate that element may or may not occur as nested element in another

Attributes of elements are structured in the DTD in the same way as elements.

SGML DTD Attributes:

<!ATTLIST subject font (bold|italic|normal) "normal" >

The previous means that the subject element has an attribute font that can take the values
bold, italic or normal which is by default normal. Attributes can be used to uniquely identify
elements to enable cross-references between two parts in the document.

SGML allows references from a document’s element to external files containing the text to be
included for the element’s value. It is also capable of dealing with non-standard characters,
illustrations and tables.

Appendix V
(R. Clarke, 1998):
§ no re-capturing or re-keying of data : reliable system, the customer can be in peace
of mind, fewer errors and exception handling

M. Bryan, 1992

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§ faster data transfer then with paper document: faster order processing, foster
handling invoices – this improves the companies cash flow
§ reducing costs: less paper, less postal and administration costs

Appendix VI
(Y Liu & B. Sloan, 1999)
§ sales: sales catalogue, price quotation request
§ order processing and purchase: purchase order, order acknowledgement, order
change, order status inquiry
§ inventory management: product transfer and account management, inventory and
advise, release raw material, planning schedule
§ distribution: ship notice, ship manifest, shipment information, shipping schedule
§ financial management: invoice, payment order, custom account analyses
§ vendor management inventory
§ electronic bidding: a fill in the blank form is sent to suppliers that return the filled form
making easy tabular comparison between suppliers possible

Appendix VII
EDI messages
The data alignment process is the mapping of data in internal database and applications to
the EDI syntax. The data required for the transactions should be selected first. Then for the
selected data the mapping should be checked in order to find out it is compatible with the EDI
standard and the network that will be used. The latest is achieved by selecting suitable
mapping software.

EDI messages are hierarchic structured messages following one or another EDI message
standard with specific message type for specific transactions. Every message type has it’s
own structure and uses language independent codes for transferring values.

The general structure of an EDIFAC EDI message can be found in Figure 7.

“70% percent of all computer input has previously been output from another computer” (R.
Clarke, 1998)
The supplier becomes responsible to decide when the company will receive a new
shipment of products. This is a change in risk allocation from buyer to seller.
Electronic bidding by means of EDI makes it possible for SME-s to take part in the bidding
whereas before this was limited to large companies. Of course they have to invest in an
expensive EDI system but they recuperate cost in not having sales person on the road.
Everything can be done from the office in a secure way and at the end of the bidding process
they are informed who won the bidding what is vital information for future biddings.

XML versus EDI - Literature Research Paper - D. Vanderbist



UNA UNB , Functional Functional UNZ ,

Group Group

UNG , Message Message UNE ,

UNH , Data Data UNT ,

Element Element
TAG + Simple + Composite ,
Data Data
Element Element

Code : Value Value Component : Component

Data Data
Element Element
Value Value
Figure 7: General structure of a EDIFACT EDI message (F. Put, 1998)
Example of the general structure applied to a Cross Payment voucher: (UK Government,

or for test transmission
NAD+FC+1000000003001:167+JO SMITH’
Further sub-contractor details may be included here. The value within the CNT segment
contains the total number of voucher records in the message and the value within the
segment contains the total number of segments in the message.

XML versus EDI - Literature Research Paper - D. Vanderbist


Further messages, i.e. UNH through UNT segments, may be included here. The value
the UNZ segment contains the total number of messages within the interchange.

EDI transactions
EDI transactions hold following properties:
§ Atomicity: the whole transactions is carried out or nothing is changes
§ Permanency: done is done, once carried out a transactions can not be undone
§ Consistency: the parties are information about a transaction progress is kept
§ Isolation: every transaction is an entity on its own

These properties are guaranteed by the EDI message protocols guiding the order and
meaning of messages sent in order to realise EDI transactions.

Appendix VIII
Part of EDI security is built in, as with the message sequence numbers and syntax checking.
Part of the security is organised by means of security headers or trailers added to the EDI
message and by special EDI security message. These special EDI security message are
used to exchange for example encryption keys.

Are EDI transactions enforceable in court? To avoid long legal disputes trading partners
should sign a Trading Partner Agreement (TPA) to ensure every partner knows its right and
duties. With one strong partner it is not always possible to sign a TPA. The strong partner will
enforce other partners to engage in a Vendor Agreement (VA) maximising the vendor’s rights
and minimizing its liability with little basis for negotiation. With VAN an agreement should be
signed considering its responsibility of correctly transmitting the EDI messages. The
information the VAN transmits must be kept confidential and the monitoring of data traffic
must be restricted.

The major advantage of Internet EDI, accessible by everyone, is also its major disadvantage.
Whereas in VAN security issues could be part of the SLA this is not provided by Internet
Service Providers (ISP-s). The user has to set-up this security himself. The build in security
aspect of EDI can still be used in the Internet context. Opting for Internet IDE makes the
convergence to XML easier since this is also an Internet based technology.

For e-Mail EDI a MIME message is encrypted or embedded in a other more specific type of
24 25 26
MIME message adding an security aspect to it: PGP/MIME , S/MIME , MOSS .

Appendix IX
In the following list we give a summary of the criticism on EDI:
• EDI is costly to set up. There are initial investments in hardware and software,
conversion costs of available business applications and recurring costs for the VAN
or ISP. How much will the company profits by introducing the EDI system? These

Data traffic analysis results are important for the VAN to ensure the required service as
stated in the SLA. But the data can be used by third parties to deduce which business
processes take place between which partners. Therefore it is important to know what the VAN
does with that data.
Pretty Good Privacy MIME
Secure MIME
Mime Object Security Services

XML versus EDI - Literature Research Paper - D. Vanderbist


costs limit the use of EDI to larger companies what is sometimes considered as the
failure of EDI in reaching a critical mass of users.
• Not every trading partner is willing to participate in the network. In that situation we
end up with double expenses: an expensive paper-based system and an expensive
not fully used EDI system. Most companies focus on the larger suppliers or
customers with EDI systems. These companies make up 80% of the business. The
problem is that the 20% of business is done with smaller customers or suppliers
causing 80% of the transaction costs because of inefficiencies in contradiction to the
20% for the larger companies.
• Social problems may occur when the company’s personal may fear EDI will make
their jobs superfluous. Personal can take a hostile stand against the new technology.
The may feel that the harder they work to get EDI operational the faster they will
loose their job. The effect of eliminating intermediates will also have social
• EDI itself will not make a business process more efficient. It will enhance the
performance of an efficient business process. Before an EDI system is implemented
the business process should be made efficient through a business-process
reengineering project. EDI is not a goal on its own, it’s a means to achieve a goal.
• Judicial and security issues concerning the EDI based transactions. Can we trust EDI
since it affects the core of out business?
• EDI focuses on communications within the supply chain. Companies also have to
communicate outside the supply chain. As said in the introductions paragraph
(Microsoft, 2002) there is a lot to gain in the indirect materials delivery.
• EDI standards are to complex trying to integrate every existing business process or
document. Most EDI standards only implement a particular view on how a specific
business process is organised with no recognition of any differences in those
business processes.
• EDI messages are not human readable making EDI implementations harder to
• EDI is too rigid to follow dynamic changes. Any change in a EDI system means
changes in EDI translators and resulting in expensive implementation cycles. These
changes can occur when new products or trading partners are added to the EDI

Appendix X
XML Metadata
Example of DTD:
The DTD describes the XML document structure. In this example it describes a purchase
order list in which products are ordered with suppliers. One supplier can supply one or more
products. Every supplier’s address information is also added to the purchase order list.
<?xml version="1.0" encoding="UTF-8" ?>
<!DOCTYPE PurchaseOrderList[
<!ELEMENT PurchaseOrderList (PurchaseOrder)*>
<!ELEMENT PurchaseOrder (Supplier, Product+)>
<!ELEMENT Supplier (Name,Address,Town,County,Postcode)>
<!ATTLIST Supplier Supplierid CDATA #REQUIRED>
<!ELEMENT Address (#PCDATA)>
<!ELEMENT Postcode (#PCDATA)>
<!ATTLIST Product
Productquantity CDATA #REQUIRED>

This is an example of an agency problem.

XML versus EDI - Literature Research Paper - D. Vanderbist



Example of XML document following the above presented DTD:

<Supplier Supplierid ="Timms">
<Name>Robert Timms</Name>
<Address>39 High St</Address>
<Postcode>M12 6GA</Postcode>
<Product Productid = "Torches" Productquantity ="40" />
<Supplier Supplierid ="Roberts">
<Name>Sam Roberts</Name>
<Address>33 The Grange</Address>
<Postcode>CH44 7YT</Postcode>
<Product Productid = "Smallrobots" Productquantity ="9" />
<Product Productid = "Tamps" Productquantity ="22" />
<Supplier Supplierid ="Jones">
<Name>David Jones</Name>
<Address>44 Lectronville Ave</Address>
<Postcode>SE45 8YU</Postcode>
<Product Productid = "Bolts" Productquantity ="6" />

XML metadata: advantages and associated technologies





Figure 8: Steps in generating an output document form a XML document

The problem with DSSL was that it never got adopted in commercially available applications.
XSL itself is being sub-standarded by Cascading Style Sheets (CSS) and by that allows
automatic conversion of CSS in XSL format. The major advantages of XSL are that it allows
the reordering of the document’s data elements without any reprocessing by the server of the
document, it allows for context sensitive formatting and it contains support to enable
documents to be optimised for printing and for screen displaying.

XML versus EDI - Literature Research Paper - D. Vanderbist


A final technique associated with XML though not widely used or supported is extensible
Linking Language (XLL.). XLL is based on hypertext protocols as defined in HyTime and the
Text Encoding Initiative (TEI). XLL is compatible with the existing linking formats such as
Uniform Resource Locator (URL) amongst others. It adds additional features to traditional
linking based on the semantic data held by the XML document: bi-directional linking,
pinpointing hierarchical positions within a XML document and indirect links through
intermediate link files .

Appendix XI
Create something what is stable and has a focus on removing inter-enterprise trade barriers.
Do not try to standardise all documents in all sectors because the result will be complex and
not workable. It is better to agree on a standardised core and allowing a flexible way for
extensions. EDI has a top-down standardisation whereas XML allows for both directions
because of its extensibility. The problem of extending XML in a bottom-up way it leads to a
set of incompatible systems. The only way around this is using repositories for DTD-s that
should be consulted first before any extension is added. An example of such a repository is
the Basic Semantic Repository (BSR) of ISO.

Considering data a lesson learned is that one should identify everything. Meta-data should be
used in documents to identify data elements. On the level of transactions there should be a
means of identifying all the documents belonging to one transaction. This is only possible
when the data exchange is predictable because business partners agreed on a document
standard and transaction protocol. By acknowledging everything we avoid errors and legal
issues based on an error/exception protocol.

Try to overcome thinking in documents. EDI’s focus is fixated on documents sometimes

forgetting the business processes behind those documents. A said before the technology only
makes sense if the business process are optimised and reengineered before being
implemented by means of technology. Another example is the level of granularity of data
elements in documents. Is it important for your company to now about shipped pallets,
cartons on pallets or the content of those cartons. It all depends on the business you’re
running. Deciding these aspects should not be taken as given but be seriously considered.

EDI contains valuable information because it has been in business for some time now. First of
all there is information about content requirements: data items, data definition and data
processing rules. Secondly it contains information about process requirements: how to handle
data by means of business processes. Finally it contains management specifications to deal
with the creation, use and maintenance of an evolving standard based on how EDI was

Appendix XII
XML/edi uses XML documents to transport EDI messages to resolve problems within legacy
EDI-systems. Where are the benefits of such a hybrid standard? XML brings to EDI faster
access the horizontal markets and enables document centric tools like search engines.

EDI brings to XML access to companies now using EDI and reliability proved concept that
stood the test of time. The problem of those hybrid standards is the often get stuck in the
middle ending up with the disadvantages of both. It is unlikely that XML/edi will appeal to
companies not already using EDI.

This is the symbolic link concept.
This is an ebXML concept (cf. infra).

XML versus EDI - Literature Research Paper - D. Vanderbist


The major advantage is that XML makes in possible to show the embedded EDI message in a
XML/edi document in a web browser in a human readable format. This enables business
partners without EDI system in the back to read and print EDI documents. This concept is
also used in Web EDI (cf. infra).

The evolution spectrum of XML/edi systems:

§ VAN-based EDI
§ Internet EDI
§ EDI documents wrapped in XML documents
§ Parallel XML/edi system

Web browsers provide a standardised Application Program Interface (API) called Domain
Object Model (DOM) to their embedded XML parsers. A common made mistake is assuming
DOM will replace EDI in the XML/edi situation. The reason it will not happen is because EDI is
used for non-standardised data whereas DOM is used in combination with object which are
by definition structured data.

edi-new is based on the XML/edi standard but adds a new semantic meta-level to it. Not only
EDI messages are converted in to DTD-s but also the EDI message standards are expreseed
by means of DTD.

A somehow deviant implementation of Internet EDI is Web EDI. Web EDI differs from the EDI
concepts since it is human-computer interaction opposed to the normal computer-computer
interaction of EDI. In Web EDI is implemented by providing a web interface for EDI
messages. The advantage for the company who’s providing Web EDI is that it can interact
with it business partners by mean of EDI messages. The advantage for the business partners
is that the do not have to invest in an expensive EDI system.

The major driving force behind e-Business XML (ebXML) is the reuse of document
specifications and business process descriptions based on on-line repositories to achieve one
global e-marketplace. “ebXML is an open and freely available standard trying to provide SME-
s with packaged, of the shelf usable, products based on a common communication
vocabulary” (ebXML, 2002). The repositories hold the core concepts, business object and
processes, of ebXML to avoid the data element proliferation as in EDI. Concepts in a
repository are aggregated in a generic way, reusable if several domain, or in non-generic
way, reusable in a specific domain. These repositories proved SME-s with of-the-shelf

The part of ebXML considering the business content – the repository of core components and
business process models described in the Unified Modeling Language (UML) – is based on
work done by UN-CEFACT. The part dealing with ebXML infrastructure – messaging,
repository, registry and security of components operated by means of the Simple Object
Access Protocol (SOAP) – is being described by the Organization for the Advancement of
Structured Information Standards standard (OASIS). Both organization have regular face-to-
face meetings to avoid they would wedge apart.

Idea formulated by Ken Steel in 1994 (B. Dekeyser, 1999)

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XML versus EDI - Literature Research Paper - D. Vanderbist


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XML versus EDI - Literature Research Paper - D. Vanderbist