XML: Like The Air We Breathe?

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March 06, 2001 (11:18 AM EST)

By Martin Marshall,

XML is poised to affect just about everything corporate IT does, from e-commerce applications to legacy data. But the pervasive changes it will bring about won't become apparent until the XML products under development hit the market later this year.

IT managers expect XML to fundamentally improve the speed, cost, and flexibility of their business applications. It's also expected to alter the way they build new applications and integrate data from current systems.

XML will have a profound effect on business processes, easing the task of exchanging data with trading partners. To some, XML is a business-process catalyst that will pick up where electronic data interchange and extended intranets fell short.

Zona Research predicted early last year that the percentage of e-commerce transactions using XML would rise from .5 percent in early 2000 to more than 40 percent by the end of 2003. In a Zona Research Market Report, "XML: The Dash For Dot.com Interoperability," released last month, a survey of more than 200 companies indicates that IT managers expect XML to dramatically improve the adaptability of their businesses.

XML is much more than a markup language; it's a fundamental mechanism for the automated exchange of data and the processes that act on that data. XML's data-transformation mechanisms go beyond operating environments, transport protocols, and the arcane barriers of the applications to present true interapplication communication.

XML covers everything from data and data-transformation processes to schema, development tools, XML servers, and components. XML also takes into account business-process mechanisms, layered architectures, and vertical-industry bodies that make decisions about XML data representations and process definitions for their industries.

XML could supplant EDI as a mechanism for transferring data between businesses and their applications. EDI has been the main way that companies exchange business forms. EDI transactions total about $750 billion per year, with about $2 billion a year spent on EDI development and deployment, according to Zona Research.

EDI does the job for bidirectional interaction, but it's expensive to implement, and the embedded business rules are rigid. EDI is a point-to-point solution that must be reengineered every time a company adds a business partner. The mapping of data sets and procedures between two trading partners in an EDI environment is generally accomplished by custom coding.

There's a growing movement toward converting EDI systems to XML, according to Zona Research's survey. Among the 72 percent of respondents who use EDI at their companies, seven out of eight plan to convert EDI into XML at some point. The largest group, 30 percent, will convert some of their EDI to XML this year, while 14 percent will do some conversion next year or later. They'll do it on a selective basis, however; very few will convert all of their EDI to XML by either 2001 (2 percent) or 2002 or later (4 percent). About one in eight will convert EDI to XML on an as-needed basis.

XML Solutions Corp. is an early implementer in converting EDI to XML. Its XEDI product claims to be able to handle all of the ANSI X.12 EDI interfaces.

With its many technical twists, it's easy to overlook the political movement behind XML. As such, it's not born of rosy optimism about global cooperation, but rather about the expedience of operating in trading communities rather than as closed systems.

Each vertical industry has a major XML effort under way to define the data term definitions and schemas for industrywide exchange of data. A data term definition is much like a database mapping tool, where a field in one table is mapped into the equivalent field in another table. The collection of data term definitions that completes the form conversion is a schema.

These efforts involve not only term definitions, such as the fields on a health-care insurance claim form, but also the processes that operate on this data, such as the calculations that are applied to a definition of a 30-year mortgage in the financing industry.

The health-care industry's initiative is being conducted by the XML subcommittee of the HL7 group, which in October adopted a new version of the Clinical Document Architecture that uses XML messaging and data structure.

There are two initiatives going on in the electronics component industry: RosettaNet and the United Nations-led ebXML effort. In insurance, it's Acord's schema efforts. The publishing industry, represented by IPTC, has achieved unification behind NewsML. The mortgage business has developed schemas using fpML; aecXML and LandXML in the architectural industry; the Retail Business Information Schemas in retailing; and similar efforts in petrochemical, real estate, food service, and manufacturing.

XML implementations aren't far enough along the experience curve to provide more than anecdotal evidence of business-process acceleration, but some claims have surfaced, many of them coming from RosettaNet members.

Lucent Technologies Inc., Murray Hill, N.J., said XML-based technical information dissemination has cut its engineers' component selection time in half and reduced risk-assessment time by 75 percent.