Description
The European Commission’s e-Business W@tch monitors the adoption, development and impact of electronic business practices in different sectors of the economy in the enlarged European Union.
The European e-Business Market Watch
European
Commission
Enterprise & Industry Directorate General
The European e-Business Market Watch
Special Report (September 2005)
e-Business Interoperability and Standards
A Cross-Sector Perspective and Outlook
Special Report (September 2005)
e-Business Interoperability and Standards
A Cross-Sector Perspective and Outlook
e-Business Interoperability
September 2005 2
The e-Business W@tch
The European Commission, Enterprise & Industry Directorate General, launched the e-Business W@tch to
monitor the growing maturity of electronic business across different sectors of the economy in the enlarged
European Union, EEA and Accession countries. Since January 2002 the e-Business W@tch has analysed e-
business developments and impacts in manufacturing, financial and service sectors. Results are continuously
being published on the Internet and can be accessed or ordered via the Europa server or directly at the
e-Business W@tch website (www.europa.eu.int/comm/enterprise/ict/policy/watch/index.htm or www.ebusiness-
watch.org).
This report is a Special Issue Study on e-Business Interoperability and Standards. It provides a cross-sector
perspective on e-business interoperability requirements and standards in the context of relevant public business
policy issues. The synthesis is based on the e-Business W@tch survey, specific business case examples and
desk research. The report is intended, in particular, for SME business managers and public policy strategists.
Disclaimer
Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use
which might be made of the following information. The views expressed in this report are those of the authors and
do not necessarily reflect those of the European Commission. Nothing in this report implies or expresses a
warranty of any kind. Results from this report should only be used as guidelines as part of an overall strategy. For
detailed advice on corporate planning, business processes and management, technology integration and legal or
tax issues, the services of a professional should be obtained.
Acknowledgements
This report was prepared by Lios Geal Consultants on behalf of the European Commission, Enterprise & Industry
Directorate General. It is a deliverable in the context of the e-Business W@tch, which is implemented by a team
consisting of empirica GmbH (co-ordinating partner), Berlecon Research, Databank Consulting, DIW Berlin, Lios
Geal Consultants, RAMBØLL Management and Salzburg Research, based on a service contract with the
European Commission.
e-Business W@tch would like to thank Ms Francoise Bousquet, ZFIB Conseil, for reviewing the draft report and
providing valuable comments and suggestions. Ms Bousquet is a member of the e-Business W@tch Industry
Advisory Board in 2005.
Contact
For further information about this Sector Study or about the e-Business W@tch, please contact:
Lios Geal Consultants Ltd
School Road
Castlegar
Galway
Ireland
Fax: (353-91)-773968
[email protected]
e-Business W@tch
c/o empirica GmbH
Oxfordstr. 2
D-53111 Bonn
Germany
Fax: (49-228) 98530-12
[email protected]
European Commission
Enterprise & Industry Directorate-
General
Technology for Innovation / ICT
Industries and e-Business
Fax: (32-2) 2967019
[email protected]
Rights Restrictions
Material from this report can be freely used and reproduced but not commercially resold and, if quoted, the exact
source must be clearly acknowledged.
Galway / Brussels, September 2005
e-Business Interoperability
3 September 2005
Table of Contents
Introduction to the e-Business W@tch............................................................. 4
Executive Summary.......................................................................................... 7
e-Business Interoperability & Standards: ..................................................... 10
1 Introduction............................................................................................. 10
1.1 Study structure.............................................................................................. 10
1.2 Review of related e-Business W@tch findings ........................................... 11
1.3 Objectives and scope of this study ............................................................. 13
1.4 Definition of key terms.................................................................................. 14
1.5 The B2B cross-sector approach .................................................................. 18
1.6 Architecture background.............................................................................. 20
1.7 European interoperability initiatives............................................................ 30
1.8 Other interoperability initiatives................................................................... 33
2 Survey results on Standards & Interoperability.................................... 35
2.1 The research questions................................................................................ 36
2.2 The e-Business Survey 2005........................................................................ 36
2.3 Do standards matter in innovation? ............................................................ 38
2.4 Current usage of EDI and plans for XML standards................................... 42
2.5 Comparative data between e-Business Surveys 2003 and 2005................ 46
2.6 Perceived standards development/implementation gaps .......................... 49
2.7 Open Source Systems .................................................................................. 52
2.8 Future via Web Services............................................................................... 53
2.9 Proposal on a functional view of enterprise size-bands ............................ 55
3 National Interoperability Initiatives ...................................................... 58
3.1 Case study on Construction (CRP Henri Tudor, Luxembourg).................. 58
Case Study: CRTI-B (CRP Henri Tudor, Luxembourg) ........................................ 59
3.2 The Story of BizDex (Standards Australia).................................................. 66
4 Policy Considerations and Recommendations for Action.................... 71
4.1 Sector level interoperability ......................................................................... 72
4.2 Cross-sector interoperability ....................................................................... 74
4.3 Standards policy ........................................................................................... 75
References...................................................................................................... 76
Annex I: The e-Business Survey 2005 – Methodology Report..................... 80
Annex II: The e-Business Scoreboard 2005.................................................. 87
e-Business Interoperability
September 2005 4
Introduction to the e-Business W@tch
e-Business W@tch – observatory and intermediary since late 2001
The European Commission’s e-Business W@tch monitors the adoption, development and impact of
electronic business practices in different sectors of the economy in the enlarged European Union. The
background of this initiative was the eEurope 2002 Action Plan, which provided the basis for targeted
actions to stimulate the use of the Internet for accelerating e-commerce, acknowledging that
"electronic commerce is already developing dynamically in inter-business trading" and that "it is
important for SMEs not to be left behind in this process." The eEurope 2005 Action Plan confirmed
and built further upon these objectives with Action 3.1.2 "A dynamic e-business environment", which
defined the goal "to promote take-up of e-business with the aim of increasing the competitiveness of
European enterprises and raising productivity and growth through investment in information and
communication technologies, human resources (notably e-skills) and new business models".
It is against this background that the European Commission, Enterprise Directorate General, launched
the e-Business W@tch in late 2001. The objective of this initiative is to provide sectoral analysis based
on empirical research, including representative enterprise surveys in countries of the European Union,
the EEA and Accession States, with special emphasis on the implications for small and medium-sized
enterprises (SMEs).
Since its launch, the e-Business W@tch has published more than 60 e-Business Sector Studies on 17
different sectors of the European economy, three comprehensive synthesis reports about the status of
electronic business in the European Union, three statistical pocketbooks and various other resources
(newsletters, special issue reports, etc). These are all available on the website at www.ebusiness-
watch.org (‘resources’).
The quantitative analysis about the diffusion of ICT and e-business is based to a large extent on
regular representative surveys among decision-makers in European enterprises. The e-Business
Survey 2005 covers more than 5000 enterprises from 10 different sectors across 7 EU member states.
In addition, more than 70 case studies on e-business activity in enterprises from all EU, EEA and
Accession countries are carried out, to complement the statistical picture by a more detailed analysis
of current e-business practices.
Survey results of the previous years have confirmed the initial assumption and rationale of the e-
Business W@tch that the sector in which a firm operates and the size of a company, rather than its
location, are the main determinants of its e-business activity. The large demand for the various
publications and statistics provided by the e-Business W@tch, and their exploitation by other research
institutions (for example, in the EITO Yearbook 2003 and in the OECD Information Technology
Outlook 2004), document the demand for sectoral e-business analysis. Facilitated by positive
responses and the growing interest in its analysis, the e-Business W@tch is increasingly developing
from an observatory into a think-tank and intermediary, stimulating the debate about the economic and
policy implications of e-business among stakeholders at an international level.
The wide-angle perspective: e-Business W@tch provides the "big picture" as a
basis for further research
The mission of the e-Business W@tch is to present a "wide-angle" perspective on e-business
developments and practices in the sectors covered. This has important implications regarding the level
of detail in which various issues can be explored, both in terms of the quantitative picture (survey) and
in terms of the qualitative assessment and background research.
Over the past 10 years, "electronic business" has increased from a very specific to a very broad topic
to be studied. The OECD proposes a definition of e-business as "automated business processes (both
intra-and inter-firm) over computer mediated networks". This definition is useful as it makes clear that
e-Business Interoperability
5 September 2005
e-business is more than e-commerce (which focuses on commercial transactions between companies
and their customers, be it consumers or other companies) and that e-business includes internal
processes within the company as well as processes between companies. Furthermore, the OECD
definition implicitly indicates that the focus and main objective of electronic business is to be found in
business process automation and integration, and the impacts thereof.
This implies that the potential scope for e-business analyses has also broadened. The measurement
of e-commerce transactions (the volume of goods and services traded online) can and should be
complemented by studies analysing the degree to which business processes, including intra-firm
processes, are electronically linked to each other and have become digitally integrated. Hence, it
becomes practically impossible to cover in depth all areas and facets of e-business in one study.
Thus, study scope needs to be carefully defined.
The e-Business W@tch Sector Studies apply a wide-angle perspective and zoom into selected
aspects of electronic business only. In general, studies with a wide-angle approach allow for a wider
range of issues to be covered and investigated at the same time. This, however, necessarily limits the
level of detail in which each single issue is explored. This must be considered when using the Sector
Studies prepared by the e-Business W@tch.
The role of economic analysis in the Sector Reports
In addition to the analysis of e-business developments, the e-Business W@tch Sector Studies also
provide some background information on the respective sector. Following the configuration of the
sector (on the basis of NACE Rev. 1.1 classification) at the introduction of each study, this overview
includes some basic industry statistics, as well as information about the latest trends and challenges
concerning the specific sector. Readers should not mistake this background information, however, as
the main topic of analysis. An e-Business W@tch "sector report" is not a piece of economic research
on the sector itself, but a study focusing on the use of ICT and e-business in that particular sector.
The introduction to the sector is neither intended to be, nor could it be a substitute for more detailed
and specific industrial analysis.
The data presented in each sector’s overview are mainly derived from official statistics prepared by
Eurostat, but are processed and refined by DIW Berlin. The purpose is to close the many gaps that
occur in the official statistics, with missing data being imputed on the basis of extrapolations and own
calculations.
The mission of the e-Business W@tch is to monitor, analyse and compare the
development of e-business in different sectors of the European economy – not the
sectors themselves.
Its objective is to provide reliable results, based on commonly accepted methodologies,
which are not readily available from other sources and would trigger the interest of policy-
makers, researchers, and other e-business stakeholders for more in depth analyses (or
statistical surveys).
The e-Business W@tch has adopted a “wide-angle” perspective in its approach and the
necessary trade-offs are transparently depicted in all its deliverables.
The definition of sectors and the adequate level of aggregation
Economic sectors constitute the main level of analysis for e-Business W@tch. In 2005, the sample
consists of ten sectors. Their configuration and definition are based on the NACE Rev. 1.1
classification of business activities.
The rather broad aggregation of different business activities into sectors in 2002-2004 made it
possible to cover a broad spectrum of the economy, but also caused some challenges for the analysis
of e-business developments. For instance, it was hardly possible to focus on individual sub-sectors in
much detail within a single sector report. The selection and definition of sectors proposed for 2005
e-Business Interoperability
September 2005 6
reflect these concerns. Six out of the ten sectors proposed are sub-sectors that were part of
(aggregated) sectors analysed in 2002-2004. The rationale for "zooming in" on former sub-sectors is
that the broad picture for the whole sector is now available from previous sector studies, and that this
seems to be the right time within the prospective life-cycle of the e-Business W@tch to focus the
analysis on more specific business activities.
The 10 sectors covered in 2005 were selected on the basis of the following considerations:
· The current dynamics of electronic business in the sector and the impact of ICT and electronic
business, as derived from earlier e-Business W@tch sector studies.
· Interest articulated by the industry in previous years on studies of this type.
· Policy relevance of the sector from the perspective of DG Enterprise & Industry.
· Roll-out strategy of 2003: New sectors (not covered in 2002/03 and/or 2003/04) have been
added, as well as specific industries which have only been covered as part of a larger sector in
the past
In 2005, the e-Business W@tch will also deliver four cross-sector studies. These Special Reports will
focus on a particular e-business topic of interest across different sectors rather than on a single sector.
The 10 sectors and 4 topics analysed in 2005
The 10 sectors which are being monitored and studied in 2004/05 include seven manufacturing,
construction and two service sectors. Four of these sectors (namely food and beverages, textile,
machinery and equipment and tourism) were also covered in the previous years of implementation,
while the other six were covered as part of (aggregated) sectors analysed during 2002-2004.
Exhibit: Sectors and topics covered by e-Business W@tch in 2005
Sector Studies NACE Rev. 1 Publication date(s) *
1 Food and beverages 15 July 2005 Sep. 2005
2 Textile industry 17, 18 July 2005
3 Publishing and printing 22 July 2005 Sep. 2005
4 Pharmaceutical industry 24.4 July 2005 Sep. 2005
5 Machinery and equipment 29 July 2005 Sep. 2005
6 Automotive industry 34 July 2005
7 Aerospace 35.3 Sep. 2005
8 Construction 45 July 2005 Sep. 2005
9 Tourism 55, 62.1+3, 92.3+5 Sep. 2005
10 IT services 72 July 2005 Sep. 2005
Special Topic Reports
A A User's Guide to ICT Indicators: Definitions,
sources, data collection
July 2005
B Overview of International e-Business
Developments
July 2005
C e-Business Standards and Interoperability
Issues
Sep. 2005
D ICT Security and Electronic Payments Sep. 2005
* There will be 1 report (in 2005) on 4 of the 10 sectors, and 2 reports on the other six.
e-Business Interoperability
7 September 2005
Executive Summary
Objectives of this study
This report is one of four special studies published by e-Business W@tch in 2005, in addition
to its sector studies. While sector studies present e-business developments from a specific
industry's perspective, special studies focus on a particular ICT related topic, across sectors.
This study focuses on the concepts, application and adoption of e-business interoperability
and standards. It is intended as a sourcebook of reliable current background information,
source data and indicative findings for SME business managers and public policy strategists.
Interoperability and Standards
Business interoperability between different companies is gradually being enabled by more
sophisticated, and yet easier to manage, internet based systems. Systems such as ebXML
have reached a point where they are now ready for full scale deployment. The lure of instant
“plug and play” web and grid services is allegedly not far away. Behind these powerful new
tools is a myriad of standards and standards development organisations, some proprietary
and others more open. All are seeking their rightful place in the emerging Business
Interoperability Frameworks. To make sense of all this, work is constantly underway to
rationalise the standards maze, by selecting the best technologies, proving them in pilots and
introducing mechanisms to eliminate duplication and manage conflicts among standards
developers.
Europe has a role to play, primarily to ensure that the needs and requirements of the
European SMEs are met as quickly and as efficiently as possible. However, Europe too must
contribute its fair share to the international initiatives on standards convergence and
interoperability testing.
Companies are expected to innovate regularly and continually. The same expectation should
be placed on our standards development organisations and to the ways in which companies
develop, select and implement B2B standards.
Enterprise Size-bands
SMEs are not a homogenous set. This study in its analysis of the take up of standards and
technology clearly shows that the adoption rates and future plans are highly dependent both
on the sectors and the size of the companies involved. One of the basic premises underlying
the research is that a sector led approach to implementation, that meets national business
and cultural requirements, is required to achieve the maximum benefits. This must include
mechanisms to help SMEs set challenging and realistic targets for their B2B
implementations, for accelerated development and harmonisation of sectoral standard
roadmaps, and for the adoption of all relevant business and technology agreements.
National Initiatives
The sector independent characteristics of national interoperability initiatives in Luxembourg
and Australia, which focus on methods to encourage and enable implementation of e-
business standards by and for SMEs, are summarised and proposed for consideration as
models for similar initiatives in other sectors and geographies.
The following observations have been noted from the survey analysis and the national
initiatives:
e-Business Interoperability
September 2005 8
· There is evidence, of a high level of commitment and practice across all of the
enterprise size-bands, that standards play a critical role and are taken into account
when making decisions on what technology and data to use in the introduction of new
products, services and processes. This focus on innovation is continued in the case
study on the CRP Henri Tudor collaborative approach to e-business implementation
within the construction sector in Luxembourg.
· When studied by enterprise size-band, interoperability with companies outside their
own sector is most important for medium sized enterprises, irrespective of their
sector.
· Subject to the absolute recognition of open voluntary participation, the role of a
national or regional standards body can usefully include application of industrial
strength project initiation criteria, coordination and management processes designed
to assist small and medium enterprises (SMEs) move to and benefit from online
trading operations.
· The longer term requirements for sustainable agile manufacturing and flexible service
delivery in B2B networks can be best met by using open, flexible and efficient
business trading frameworks. Interoperability, enabled by appropriate standards
development and testing environments, is essential.
The comparative cross-sectoral data and conclusions from the e-Business Survey 2005
indicate that the pace and direction of e-business development differs considerably between
sectors and between types of enterprise. In some sectors, internet based e-business is
already significantly changing the way companies interact with their customers and business
partners. Nonetheless, despite the apparent differences in take up, there are commonalities
when viewed in the context of an e-Business Interoperability Framework: all sectors utilise
similar core business processes and share the need for agreed cross-partner trading profiles.
Policy conclusions
The study recommendations focus on medium term actions which could directly contribute to
implementation of common standards based solutions in all sectors. For long term value,
transparent fairness and maximum impact (relative also to the additional goal of movement
towards standards convergence) the proposed actions are suggested to be focused primarily
at the sectoral, cross-sectoral, and standards policy levels. The study results are fully
consistent with, and actively complement, the practical focus on increased implementation
and use of technology proposed in support of the i2010 Action Plan
1
.
1
Seehttp://europe.eu.int/i2010
e-Business Interoperability
9 September 2005
Policy Objective Suggestion for policy Potential Initiator(s)
Increase awareness and support mechanisms,
at sectoral level, with emphasis on SMEs:
· encourage sector led initiatives, ideally led
by respected neutral organisations, similar to
that conducted by CRP Henri Tudor as a
way to accelerate the pre-competitive busi-
ness and technology agreements required
for effective national and regional implem-
entation of existing and emerging sectoral e-
business standards and guide-lines;
· ICT Innovation Centres
· Sector Industry
Associations
· National Standards
Bodies
· Member state business
development agencies
· proposed new High
Level ebXML
Implementation Group
· encourage and assist CEN/ISSS eBIF and
EBES to jointly compile and distribute infor-
mation on successful implementations of
ebXML and Web Services by SMEs;
· ICT Innovation Centres
· EU and national RTD
projects
Sector level
interoperability
· facilitate SME access (preferably free) to all
strategic eBIF information documents.
· DG Enterprise and
Industry
· CEN/ISSS eBIF and
EBES members
Cross-sector
interoperability
Review the enterprise size-band data presented
by sector and topic in this report in a cross-
sectoral workshop and establish a process to:
1) assist typical SME enterprise size-band
representatives establish and share appr-
opriate targets and standards roadmaps
for interoperable e-trade with their
business partners;
2) establish formal BPI (Business Process
Integration) mechanisms (e.g. piloting,
training and model sharing) to encourage
and assist SMEs integrate business
processes into their B2B implementations;
3) look for cross-sector commonalities.
Where relevant actively promote European
common cross-sector interoperability
standards and convergence;
4) improve European inputs to the global e-
business ISO/IEC/ITU/CEFACT Business
Standards Convergence framework and, in
the global context, also collaborate with
NIST eBSC Forum convergence activities.
· SME Associations
· Sector Industry
Associations
· DG Enterprise &
Industry
· CEN/ISSS eBIF and
EBES members
Standards Policy Investigate the potential for developing a Bizdex
2
like approach to some forthcoming European or
national standardisation and e-business imple-
mentation projects.
· National Standards
Organisations
· ICT vendors
· DG Enterprise and
industry
2
BizDex(www.bizdex.com.au) is an example of a successful PPP (public private partnership) model where the
standards body takes on a much greater role and responsibility for the costs, standards and integration tools
developed. In effect it becomes part of a wider business partnership and assumes risks in taking this
approach.
e-Business Interoperability
September 2005 10
e-Business Interoperability & Standards:
A Cross-Sector Perspective and Outlook
1 Introduction
Interoperability refers to the ability of ICT systems and applications to work seamlessly
together, and for diverse information resources to be systematically and consistently
accessible to applications, when required. Without standards there would be no inter-
operability. This cross-sector study on e-business interoperability is intended as a timely
contribution to standards based competitiveness policies, as seen from the viewpoint of
SMEs, especially those operating in the manufacturing sectors.
1.1 Study structure
The study is organised in the following chapters and main sections:
· Chapter 1 defines the background, objectives, scope and key terms including a
cross-sector Open-edi framework perspective on B2B e-business interoperability,
such as current XML-based approaches (ebXML, Web services). The main
challenges and status of business interoperability from a standards perspective, are
summarised by reference to relevant initiatives in Europe, and in the US.
· Chapter 2 presents the interoperability and standards related findings from the
e-Business Survey 2005. The summary and interpretation of the findings are used to
facilitate identification and discussion of specific policy related conclusions, and
specific actions that may be required, to improve the use and development value of
standards to all concerned.
· Chapter 3 focuses on the experiences, results and conclusions drawn from two
significant and representative national examples:
o A case study dealing with change in the construction industry in Luxembourg;
and,
o the story of Bizdex, the Australian standards policy initiative on B2B.
A summary of lessons, potentially applicable to all sectors, is presented following
analysis of these descriptions and their high level public policy implications.
· Chapter 4 draws attention to public policy challenges and provides a synthesis and
an outlook which dovetails with the priorities in the i2010 initiative, emerging
standards policy and standards take-up objectives within European and national
initiatives. Overall conclusions are drawn from evidence presented in the report.
e-Business Interoperability
11 September 2005
1.2 Review of related e-Business W@tch findings
The European e-Business W@tch Synthesis Reports
3
, and Sector Impact Reports provide
extensive information, by sector and across countries in Europe, on the application of ICT to
meet business objectives. These reports are framed within the concept of the extended
enterprise, in the sense that a company is constituted not only by its management,
employees and means of production, but also by a functioning network of business partners,
including customers and suppliers.
In the European e-Business Report 2003, detailed information from extensive surveys is
presented according to the following framework for electronic business:
· e-Readiness: ICT infrastructure and skills development
· e-Activity: e-Commerce (frequency and intensity)
· e-Integration: business processes within and between enterprises
· e-Impacts: effects of e-business activity on enterprises
The theme of e-Integration is continued in the European e-Business Report 2004, which
confirms business process integration (BPI) as the big issue. The report observes that
exchange of standardised data
4
is increasingly recognised as an important indicator of
e-business activity. A special trend section, derived from the second part of the e-Business
Survey 2003 (November) on the use of electronic data standards, notes the following:
· The share, of companies that exchange standardised data, increases with the size of
the firm. More than 60% of the large firms interviewed said that they did so;
· EDI based standards are mainly used in manufacturing sectors and in retail. Sectors
with a strong EDI legacy may be reluctant to switch to other standards;
· XML based standards appear to be widely used by firms in the business sector. It is
possible that awareness for XML is particularly high among the knowledge- intensive
sub-sectors of business services, where web-based services play a very important
role in delivering services and information to customers. More predictably, XML based
standards (including, for example, RosettaNet) are also used more than on average
in high-tech sectors (electronics, ICT services);
· The STEP standard is used only by a minority of firms; its share was less than 10% in
all of the sectors surveyed, even among the large companies.
3
e-Business W@tch / European Commission (2002/2003). The European e-Business Report 2003. A portrait of
e-business in 15 sectors of the EU economy. Luxembourg: Office for Official Publications of the European
Communities, 2003
e-Business W@tch / European Commission (2003). The European e-Business Report 2003. A portrait of e-
business in 15 sectors of the EU economy. Luxembourg: Office for Official Publications of the European
Communities, 2003
e-Business W@tch / European Commission (2004). The European e-Business Report 2004. A portrait of e-
business in 10 sectors of the EU economy. Luxembourg: Office for Official Publications of the European
Communities, 2004
4
The survey question was: “Are you exchanging standardised data with your buyers or sellers electronically?
With standardised data we mean electronic product catalogues, orders, invoices, delivery notes and similar
business documents. We do not mean plain e-mails.”
e-Business Interoperability
September 2005 12
Referring to the conclusions from the e-Business W@tch Workshop (Montpellier, November
19, 2003), held in conjunction with the IDATE Annual Conference, the same 2004 Synthesis
Report noted the issue of interoperability and the success factors for implementation of e-
standards in the following succinct paragraph:
Experts pointed at a number of important requirements for the successful
implementation of e-standards. Success factors include community consensus on
essential details and the successful implementation among early adopters, which
normally results in a faster and broader adoption process. Progress in the
interoperability between systems and components should promote better integration
of front office and back office data information systems. However, it will be crucial to
take into account sector-specific issues in technical aspects, organisational issues
and semantics. Adopting a sectoral standardisation approach could ease
development, but may lead to difficulties in cross-sectoral data exchanges.
1.2.1 B2B Interoperability
Thus, in summary, B2B interoperability is seen as the central technical and business
challenge that companies face in relation to conducting business as an extended enterprise.
Bearing in mind that, ideally, B2B interoperability must at least have a common sectoral
foundation, it is clear that the most important issue is the integration of business processes
between business partners
5
.
While the concept of business to business (B2B) interoperability is straightforward, its
realisation in general has been costly, difficult and complex, and for a long time mainly
confined to electronic data interchange (EDI) between the large industry players.
Because of the cost and complexity of EDI, benefits often were more confined to a
limited group of large organisations and may have contributed mostly to consolidation
rather than to other types of structural changes.
6,7
5
The successful introduction of integrated business processes between two companies, and realisation of the
mutual benefits to be derived, will be influenced to an extent by whether they have already been successful in
individually automating and standardising their own internal processes as well as the level of integration
between their individual back and front office systems. As will be clear, later in this chapter, the same
processes used for inter-business interoperability can be applied to ensuring proper understanding and
description of internal business processes.
6
Wigand, R., Steinfield, C., and Markus, M. L., IT Standards Choices and Industry Structure Outcomes: The
Case of the United States Home Mortgage Industry. To appear in the Journal of Management Information
Systems, 22 (2) Fall, 2005. (pre-publication version, last accessed August 23, 2005,http://ebusiness.tc.msu.edu/netindustry/page2/files/JMIS2005.pdf).
7
Steinfield, C., Markus, M.L., and Wigand, R.T. Exploring Interorganizational Systems at the Industry level of
Analysis: Evidence from the U.S. Home Mortgage Industry. To appear in Journal of Information Technology,
18 (4), December 2005 (pre-publication version last accessed August 23, 2005,http://ebusiness.tc.msu.edu/netindustry/page2/files/JIT2005.pdf).
e-Business Interoperability
13 September 2005
1.2.2 Enterprise size-band
The e-Business W@tch reports continually confirm the differences shown by companies of
different size-bands, even within the same sector. The results from the Business Survey
2003 (November) clearly show, for instance, that the perceived importance of specific
emerging technologies increases almost linearly with firm-size, with large companies being
particularly prominent. However, this finding is not consistent across all sectors.
In addition, the Pocketbook of e-Business Indicators (2005), drawn from the results of the
e-Business Survey 2005, shows that the diffusion of advanced e-business software solutions
for automating business processes increases steadily by company size. For example, in
2005, about 8-10% of small companies, more than 30% of medium-sized enterprises, and
nearly 60% of large enterprises in the EU had an Enterprise Resource Planning (ERP)
system.
Further study and analysis conducted via the new e-Business Survey 2005 has yielded more
positive and robust survey results differentiating between enterprise size-bands as well as
sectors. These findings are presented and discussed in this report (see Chapter 2).
1.3 Objectives and scope of this study
This special study examines the issues relating to interoperability and e-business standards
that were outlined in the previous section. It uses the results of tailored questions, directed at
the sectors targeted in the 2005 e-Business W@tch work, to see what, if anything, has
changed in the intervening two years since the e-Business Survey 2003. The principal, firm
level, data gathering mechanism is a cross-sectoral CATI survey on interoperability and
standards. This is complemented by a case study on collaboration at national level and by an
extensive desk research based description of the Standards Australia development of
BizDex.
Items covered in the e-Business Survey 2005 include questions on whether standards are
considered as critical (or not), and whether they are taken into account in development of
new processes and products. The survey also seeks to assess the expressed attitudes within
the sample population to intra- and inter-sector interoperability, the current and projected use
of EDI/XML standards, the main gaps that are perceived in some critical e-business
standards, current use of open source software (OSS), and the future importance of Web
Services. The intention of the subsequent data analysis is to identify the primary factors that
influence and direct the main attributes related to implementation of interoperable e-business
standards, particularly those aspects that are independent of the specific sector chosen.
The case study on CRTI-B, and the description of BizDex (Standards Australia), address real
live scenarios, and potential sectoral differences or similarities in technical, semantic and
organisational systems, especially those that are of particular relevance to SMEs.
e-Business Interoperability
September 2005 14
1.4 Definition of key terms
1.4.1 Interoperability
When discussing ways in which two systems, components or organisations can work
together the terms interoperability, interface and integration frequently occur. A good
practical definition of interoperability is cited in CEN Report CR 14300:1999 "Interoperability
of healthcare multimedia report systems"
8
, and repeated in the CEN/TC 251 "Short Strategic
Study: Health Information Infrastructure"
9
, published in 2005. This definition of interoper-
ability, in its mention of a specific task, usefully distinguishes interoperability from integration.
It also brings additional precision and operational clarity to the IEEE and ISO definition.
Interoperability (CEN Report CR 14300:1999)
a state which exists between two application entities when, with regard to a specific
task, one application entity can accept data from the other and perform that task in an
appropriate and satisfactory manner without the need for extra operator intervention
Interoperability (IEEE and ISO)
the ability of two or more systems to exchange data, and to mutually use the
information that has been exchanged
Interoperability (IDAbc
10
)
the ability of information and communication technology (ICT) systems and of the
business processes they support to exchange data and to enable the sharing of
information and knowledge.
Interoperability (Miller
11
)
the ongoing process of ensuring that the systems, procedures and culture of
an organisation are managed in such a way as to maximise opportunities for
exchange and re-use of information, whether internally or externally
8
CEN/TC251/WG IV Health Informatics. Interoperability of Healthcare Multimedia Report Systems. Version 1.0.
(http://www.tc251wgiv.nhs.uk/pages/pdf/pt34fwd.pdf, last accessed August 23, 2005)
9
CEN/TC251 Health Informatics (2005) – Short Strategic Study – Health Information Infrastructure – working
draft, interim report v0.4. (http://www.centc251.org/TCMeet/doclist/TCdoc00/N00-074.pdf, last accessed
August 23, 2005)
10
IDAbc (2004) European Interoperability Framework for pan-European eGovenment services. Page 5
11
Interoperabilityhttp://hylife.unn.ac.uk/toolkit/Interoperability.html (last accessed August 23, 2005)
e-Business Interoperability
15 September 2005
1.4.2 Business Perspective
This study is conducted from a business perspective. In order to have a practical business
meaning and interpretation, interoperability must be understood and expressed in the context
of a business standards interoperability framework. The European Interoperability Frame-
work (EIF)
12
for pan-European eGovernment Services, published in November 2004 by the
IDA
13
defines an interoperability framework as follows:
An interoperability framework can be defined as a set of standards and guidelines
that describes the way in which organisations have agreed, or should agree, to
interact with each other. An interoperability framework is, therefore, not a static
document and may have to be adapted over time as technologies, standards and
administrative requirements change.
It is therefore worthwhile to step back at the beginning and adopt a general picture as shown
in the third and fourth definitions above. By so doing it is possible to better understand that:
· interoperability is not an end, in itself;
· standards while necessary are not sufficient for interoperability; and,
· any study of inter-enterprise interoperability and the standards that enable
interoperability, must be based on an understanding of the business, social,
cultural and political circumstances in which the enterprises operate.
In addition, it becomes clear that to be interoperable an organisation must be actively
engaged in the ongoing process of ensuring that its systems, procedures and organisational
culture are managed in a way that maximises opportunities for internal and external
exchange and re-use of information, whether by means of automated processes using ICT or
not. This is a fundamental issue.
1.4.3 Standards and Standardisation
The definition in Directive 98/34/EC is essential, because it underlies the New Approach and
European standards policy. For completeness, other definitions are also included. The
ISO/IEC definitions of a standard and of standardisation are particularly important, because
of the global nature of B2B and the voluntary, open way in which ISO/IEC standards are
developed.
The CRTI-B
14
definition of a standard is included because of the emphasis on
implementation and on the importance of collaborative agreement between the parties of all
doing things in a certain way. This definition also includes all ‘technical specifications’ that
are produced by industry groups and other initiatives. The difference between a full
consensus standard developed via an open and non-discriminatory process and a
specifications delivered through other means is also of interest.
12
European Interoperability Framework for pan-European eGovernment Services (2004)
(http://europa.eu.int/idabc/servlets/Doc?id=19528, last accessed August 23, 2005); see also the complete EIF
specification (http://europa.eu.int/idabc/en/document/3473/5585, last accessed August 23, 2005)
13
Interchange of Data between Administrations (IDA), is a Community Programme managed by the European
Commission's Enterprise and Industry Directorate General. IDA supports the implementation of EU legislation,
from internal market regulations to consumer and health policies, by facilitating the exchange of information
between public administrations across Europe through the use of information technology.
14
Centre de Ressources des Technologies de l’Information pour le Bâtiment (Luxembourg). See Section 3.1 of
this report
e-Business Interoperability
September 2005 16
standard (Directive 98/34/EC)
a technical specification approved by a recognised standardisation body for repeated
or continuous application, with which compliance is not compulsory and which is one
of the following:
— international standard: a standard adopted by an international standardisation
organisation and made available to the public;
— European standard: a standard adopted by a European standardisation body and
made available to the public;
— national standard: a standard adopted by a national standardisation body and
made available to the public
standard (CRTI-B)
codified agreement between parties who recognise the advantage of all doing certain
things in a certain way
standard (EN 45020; and ISO/IEC)
document, established by consensus and approved by a recognised body, that
provides, for common and repeated use, rules guidelines or characteristics for
activities or their results, aimed at the achievement of the optimum degree of order in
a given context
standardisation (EN 45020; and ISO/IEC)
activity of establishing with regard to actual or potential problems, provisions for
common and repeated use, aimed at the achievement of the optimum degree of order
in a given context
1.4.4 Open Standards
Open standards of whatever flavour and source are favoured for sustainable e-business
interoperability. However, despite the rhetoric that pervades the concept, there is no
commonly accepted, universal definition of an ‘open’ standard.
A recent comprehensive attempt is outlined in Resolution GSC-10/04
15
of the 10th Global
Standards Collaboration meeting (Sophia-Antipolis, September 2005) which defines as
“open” a standard which meets the following fundamental elements:
(1) the standard is developed and/or approved, and maintained by a collaborative
consensus-based process;
(2) such process is transparent;
(3) materially affected and interested parties are not excluded from such process;
(4) the standard is subject to RAND/FRAND
16
Intellectual Property Right (IPR)
policies which do not mandate, but may permit, at the option of the IPR holder,
licensing essential intellectual property without compensation; and,
(5) the standard is published and made available to the general public under
reasonable terms (including for reasonable fee or for free).
15
Global Standards Collaboration, 10
th
meeting Sophia Antipolis, September 2005. Resolution GSC-10/04:
(Joint) Open Standards (http://portal.etsi.org/docbox/workshop/sos_interoperability/SOS2/SOS2_13 ANSI
Views on open standards.ppt, last accessed 29 September 2005)
16
Fair Reasonable and Non Discriminatory
e-Business Interoperability
17 September 2005
Legislators have offered many definitions, and generally received strong reactions in return.
Two specific instances include the Business Software Alliance
17
response to the IDAbc
definition and the definition offered by the Danish Government
18
. More particularly, for
example, the 5th paragraph of section 2.5 of the Initiative for Software report
19
refer to
examples from France, Belgium, European Union, and the US and notes that these
definitions have in common the following principles:
availability, non-discrimination, publication, low costs and protection of intellectual
property rights (although in many cases there are no royalties due).
The Initiative for Software Report further notes that, although open standards allow the
implementation of open source software or proprietary software, an important principle is that
in order to guarantee the flexibility in assessment of the best technological solution to
enhance interoperability, the choice as to which standard and especially which software is to
be used must not be imposed by the government. In other words, regulatory efforts to
promote interoperability should be clearly separated from advocacy for open source
software.
1.4.5 Scope of standardisation
Given the diverse range of elements that are important to enterprises, when they are
establishing interoperable business, it is evident that the technology aspects of
interoperability are invariably complex. Addressing technology interoperability issues via
standards presents a range of challenges: one of the most important of these is the extent of
the problem to focus on. Thus, some standards are created to solve relatively narrow specific
technical infrastructure problems, while others address broad general and technical
management issues:
· One distinction is whether the standardisation addresses components only, or
whether it specifies a structure into which specific system wide solutions can be
embedded. There is a practical outcome to the difference. Generally, the wider the
problem scope addressed by a standard, the greater is the risk of producing over-
specified, over-complicated, and under-performing standards;
· The narrow standards can sometimes be easier to deliver and adopt, and provided
they fit into a workable functioning overall architecture, may as such have a relatively
higher record of market success than broader standards. The latter usually also take
longer to define and are thus potentially subject to more distractions and roadblocks
along the way.
E-business interoperability requires both types of standards. This study therefore focuses on
two exemplars of both types of standards:
· The system wide approach to interoperability and sets of e-business standards as
shown for example in the developments associated with ebXML;
· The development of web services, in which the emphasis is on component standards
and their integration within an overall architecture.
17
Concerns raised over proposed definition of 'open standards'http://europa.eu.int/idabc/en/document/4018/357, last accessed 29 September 2005)
18
Danish Government defines "open standards" (http://europa.eu.int/idabc/en/document/3132/333, last
accessed 29 September 2005)
19
Considerations on Interoperability and the Public Procurement of Software in Latin America 3/1/2005
(http://www.softwarechoice.org/download_files/Lat_Am_InteropWP.pdf, last accessed 29 September 2005)
e-Business Interoperability
September 2005 18
1.5 The B2B cross-sector approach
During the design of the e-Business Survey 2005 questionnaire, attention was given to the
Berlecon Research
20
report on e-business standards. That report, compiled on behalf of the
German Federal Ministry of Economics and Labour, also used a user survey and addressed
the topic in terms of the following standardisation issues:
· Identification and classification of products and components;
· Exchange of catalogue data;
· Synchronisation of data;
· Transactions, e.g. transactions of invoices or orders;
· Processes.
No attempt has been made to replicate the Berlecon Research study on a wider scale. Their
work was based on extensive in-person interviews whereas, for practical purposes, the
e-Business Survey 2005 questions are geared towards simple yes/no or Likert-type scale
responses gathered in a twenty-minute computer-aided telephone interview (CATI). Thus, in
order to build up a comparative analysis of the status within different sectors, the questions in
the survey are framed, for instance, to determine:
· the attitude to standards importance and use;
· the level of satisfaction, or perceived gap, associated with the cross-sector facets,
such as “catalogues and classification” and “messaging”.
This study focuses specifically on B2B application-to-application trading and standards
issues. The reasons for this focus are clear. The primary reasons are that the work is being
conducted in the e-Business W@tch area and because of the availability of data from
tailored questions included in the e-Business Survey 2005.
It is also relevant that B2B e-business involves vast sums of money, whereas B2C is still a
small fraction of B2B. As quoted at the CSW Informatics XML Summer School, 28 July
2003
21
the size of the US B2B business alone, according to Forrester, will exceed 12 trillion
dollars in 2006. This represents a huge B2B growth and the estimate is also greater by more
than a factor of ten than the figures reported by US Census Bureau for 2000.
Notwithstanding the possibility that the true 2006 figure will probably lie somewhere lower
than the Forrester predictions, it is clear from widely accepted industry trends that the
economic benefits to be gained by focusing on B2B e-trading are certain to be very
worthwhile.
20
Berlecon Research / BMWA (2003): E-Business-Standards in Deutschland: Bestandsaufnahmen, Probleme,
Perspektiven. Report by Berlecon Research on behalf of the Bundesministerium für Wirtschaft und Arbeit
(BMWA), April 2003 (http://www.berlecon.de/research/en/reports.php?we_objectID=125, last accessed
August 23, 2005)
21
Maler, E., XML for e-business (2003). (xml.coverpages.org/Maler-CSW-xml-for-ebusiness.pdf, last accessed
August 23, 2005)
e-Business Interoperability
19 September 2005
Exhibit 1-1: e-Business market opportunity
Source: XML for e-business
Eve Maler at CSW Informatics XML Summer School, 28 July 2003.
Sectors addressed
The ten sectors addressed in the e-Business Survey 2005 are listed in Exhibit 1-2.
Abbreviations of the sector names, as shown in the second column of Exhibit 1-2, are used
for convenience in the tables and charts in this report.
Exhibit 1-2: Sectors in the e-Business Survey 2005
Sectors Addressed in e-Business Survey 2005 Abbreviation
Food and beverages Food
Textile industries Textile
Publishing and printing Publish
Manufacture of pharmaceuticals Pharma
Manufacture of machinery and equipment Machine
Automotive industry Auto
Aerospace industry Aero
Construction Constr
Tourism Tourism
IT Services IT Serv
e-Business Interoperability
September 2005 20
1.6 Architecture background
In general, the approach to achieving “Interoperability” depends on the context and the
individual perspectives concerned. In the e-business context, there are two main facets:
· Technical Interoperability (TI), which determines how different software programs in
different companies can interact; and
· Business Interoperability (BI). Also often known as ‘Collaboration’, BI concerns itself with
the semantics and the agreements between companies acting in trading communities. It
determines how different companies can align their respective business processes in
order to do business electronically.
Neither is sufficient on their own; both are essential and must be simultaneously addressed,
preferably within at least a common sector driven approach.
Business Interoperability is a far more complex issue than Technical Interoperability,
since it not only involves semantics, but also culture, language, business practices,
legislation and corporate politics. A necessary ingredient for doing business
electronically is also the presence of up-to-date and correct product information with
the partners in the Supply Chain. Product Catalogues, Data Alignment and
Classification of products are topics related to this issue. (Dick Raman, CEN/ISSS
WS/EBES
22
Chairman, 23 March 2004)
Trading globally, over electronic networks, depends on the trust networks established
between suppliers and purchasers and also on the enabling physical and logical
infrastructures.
And all of this must be as easy as making a telephone call, even with trading partners
who are complete strangers. After all, with one telephone call we nowadays already
can place an order. Computerisation should make life easier, not harder.
23
1.6.1 EDI
Electronic Data Interchange (EDI) was first introduced more than 20 years ago and since
standardised in United Nations Centre for Trade Facilitation and Electronic Business
(UN/CEFACT). Throughout that time, EDI has proven to be a successful long-standing and
long-lasting technology standard for electronic trading transactions.
EDI techniques enable the exchange of transactional information between independent
organisations based on standardised business documents. Traditional EDI systems employ
specialised communications networks, value-added networks (VAN), to obtain enterprise
qualities of service. Although EDI serves its particular task very well in the right set of
circumstances, the cost of implementation per additional trading partner is expensive, the
information itself is not human readable, and often the technologies require the use of private
networks involving per-transaction costs.
22
The CEN/ISSS eBES (e-Business Board for European Standardisation) Workshop is a focal point within
Europe for the standardisation of technologies to exchange electronic business data. WS/eBES is the
"European Entry point" for the UN-ECE/CEFACT electronic business standardisation process.
See also the Business Plan December 2004
(http://www.cenorm.be/cenorm/businessdomains/businessdomains/isss/activity/wsebes.asp, last accessed August 23,
2005)
23
van Blommestein F.B.E. and P.G.L. Potgieser (2005). ebXML for managers: a co-production of ECP.NL and
Interpay. p22. (http://www.ecp.nl/publications/ebXML_for_managers.pdf, last accessed August 23, 2005)
e-Business Interoperability
21 September 2005
These characteristics of traditional EDI are summarised in the introduction to the Open-edi
reference model:
The economic advantages of Electronic Data Interchange (EDI) are widely
recognised. However, the cost of setting up an EDI relationship has been very high
due to the need for detailed bilateral business and technical agreement between the
involved business partners. The initial high cost of establishing such an agreement
does not justify short term partnerships. It has also been found that implementations
involving the management of a large number of partners and their associated
agreements are not productive Consequently most EDI implementations have been
successful only in long term partnerships, and between a limited number of
partners
24
.
Open-edi lowers these barriers by introducing standardised business scenarios and the
necessary services to support them.
Open-edi
25
The ISO/IEC Open-edi Reference Model provides a reference framework for the
identification, development, and co-ordination of Open-edi standards. This framework
addresses separately the complementary business and technology perspectives of business
transactions. These perspectives are defined as follows:
· Business Operational View (BOV): a standards perspective on business
transactions regarding the making of business decisions and commitments among
organisations, limited to those aspects which are needed for the description of a
business transaction;
· Functional Service View (FSV): a standards perspective on business transactions
limited to those information technology interoperability aspects of IT Systems needed
to support the execution of Open-edi transactions.
These views are not independent. The FSV related standards must take into account the
BOV related standards and vice-versa. As shown in Exhibit 1-3, the effective inter-
relationship between these classes of standards is a critical factor of the Open-edi reference
model.
The BOV related standards are tools and rules by which business users, who understand the
operating aspects of a business domain, may create business trading scenarios. Registration
authorities, for instance, will reference the BOV related standards when considering
scenarios for registration.
The FSV related standards are used by the information technology experts to design and/or
build IT systems which support the business needs. These experts produce products and
services conforming to FSV related standards. These so-called “Open-edi systems” support
the execution of Open-edi transactions.
Open-edi scenarios, built using BOV related standards, formulate requirements which are
demands placed on the products and services conforming to FSV related standards
executing the corresponding Open-edi transaction. These demands, which ultimately specify
the required ICT system components, include:
24
ISO/IEC 14662:2004(E). Information technology – Open-edi reference model. Introduction, Page v.
(http://isotc.iso.org/livelink/livelink/fetch/2000/2489/Ittf_Home/PubliclyAvailableStandards.htm, last accessed
August 23, 2005)
25
ISO/IEC 14662:2004(E). Information technology – Open-edi reference model.
(http://isotc.iso.org/livelink/livelink/fetch/2000/2489/Ittf_Home/PubliclyAvailableStandards.htm, last accessed
August 23, 2005)
e-Business Interoperability
September 2005 22
· identification of the functional capabilities necessary to support Open-edi
transactions;
· formal specification of these functional components developed using FSV related
standards;
· specification and agreement on the quality of service required from the functional
capabilities for these Open-edi transactions.
The primary benefit within the Open-edi scenario, is that there is in principle no need for prior
agreement on technical and business details in order for two enterprises to engage directly in
B2B. As long as both implementations conform to the FSV related standards, the Open-edi
processes ensure acceptance and processing of that information, in the context of that
scenario. In that case, by reference to the scenario and without the need for further
agreement, one or more other Open-edi parties can start trading electronically. However, the
legal requirements and/or liabilities resulting from the engagement of an organisation in any
Open-edi transaction may be conditioned by the competent legal environment(s) or the
formation of a legal interchange agreement between the participating organisations.
Open-edi parties need to observe rule-based behaviour and possess the ability to make
commitments in Open-edi (e.g. from business, operational, technical, legal and/or audit
perspectives). Open-edi essentially remained a concept until the advent of internet EDI.
Exhibit 1-3: Open-edi Reference model
BOV related
standards
FSV related
standards
Business aspects
of
business transactions
Information technology
aspects of
business transactions
Functional Service View
Business Operational View
Viewed as
B
U
S
I
N
E
S
S
T
R
A
N
S
A
C
T
I
O
N
S
Comply with
Covered by
Comply with
Covered by
Open-edi Reference Model
Inter-related
Internet EDI (XML/EDI)
Since the first appearance (1996) in Japan of Internet EDI, the simplicity of system
configuration, low management costs and essentially no usage fees have made it an
attractive proposition in comparison to traditional proprietary-EDI or EDI over private VANs
(Value Added Networks). This and other aspects related to XML/EDI are well documented in
the Internet EDI (XML/EDI): introduction guidebook
26
, published by the Electronic Commerce
Promotion Council of Japan.
26
Electronic Commerce Promotion Council of Japan. Internet EDI (XML/EDI): introduction guidebook, March
2003 (http://www.ecom.jp/ecom_e/press/20030529/InternetEDIGuidebook.pdf, last accessed August 23,
2005).
e-Business Interoperability
23 September 2005
1.6.2 XML – eXtensible Markup Language
The eXtensible Markup Language (XML) is a subset of SGML
27
. Its goal is to enable generic
SGML to be served, received, and processed on the Web, in the way that is widely possible
with HTML. XML has been designed for ease of implementation and for interoperability with
both SGML and HTML.The XML specification
28
defines a standard way to identify structures
by adding markup to documents containing structured information. Structured information
contains both content (e.g. words, tables, graphics, pictures) and some indication of what
role that content plays. The term "document" refers to traditional documents, like this one,
and also to wide range of other XML "data formats". These include vector graphics,
e-commerce transactions, mathematical equations, object meta-data, server APIs, and many
other kinds of structured information. As a very general rule, few documents exhibit no
structure. Thus practically all documents exhibit some structure and can be represented in
XML.
Unlike HTML, which has fixed tag semantics and tag sets, XML specifies neither semantics
nor a tag set. XML is a meta-language for describing markup languages and as such
provides the flexibility to define tags and the structural relationships between them that are
applicable to any domain of choice. Since there is no predefined tag set, there cannot be any
preconceived semantics. All of the semantics of an XML document will be defined either by
the applications that process them or by XML schemas or stylesheets. A convenient glossary
of XML terms is available online via the XML Acronym Demystifier
29
.
1.6.3 ebXML
The electronic Business using XML (ebXML) initiative began in November 1999 with the goal
to “enable anyone, anywhere to do business with anyone else”. The first complete
specifications were delivered in May 2001 after extensive collaboration between members of
UN/CEFACT and OASIS.
Fact Box:
ebXML (electronic business using eXtensible Markup Language). A single set of
internationally agreed upon technical specifications and common XML
semantics to facilitate global trade. The ebXML framework for e-business is a
joint initiative of UN/CEFACT and OASIS. (www.ebxml.org).
UN/CEFACT is the United Nations Centre for Trade Facilitation and Electronic
Business, the international body whose mandate covers worldwide policy and
technical development in those areas. Headquartered in Geneva, it has
developed and promoted many tools for the facilitation of global business
processes including UN/EDIFACT, the United Nations Directories for Electronic
Data Interchange for Administration, Commerce and Transport. Since 1999, it
has collaborated with OASIS in the development of ebXML. (www.uncefact.org)
OASIS (Organization for the Advancement of Structured Information Standards)
is a not-for-profit, global consortium that drives the development, convergence
and adoption of e-business standards. (http://www.oasis-open.org)
27
Standard Generalized Markup Language, ISO/IEC 8879:1986(E)
28
Extensible Markup Language (XML) 1.0 (Third Edition) W3C Recommendation 04 February 2004.
(http://www.w3.org/TR/REC-xml/, last accessed August 25, 2005)
29
XML acronym demystifierhttp://www.xml-acronym-demystifier.org/, last accessed August 23, 2005
e-Business Interoperability
September 2005 24
ebXML is unique in the breadth of its standards vision and is built on the previous Open-edi
standards efforts toward a shared global Internet-based B2B framework. ebXML is
complementary to many existing standards, such as legacy EDI, XML-based business
document standards, and Web Services.
The general technical and business design goals that underlie ebXML developments are
outlined as follows
30
in the European ebXML Information Centre web pages:
- Enable simple, easy and ubiquitous electronic business through the use of XML;
- Use W3C XML technical specifications holding recommended status to the maximum
extent practicable;
- Provide a global cross-industry open, interoperable standard for business-to-business
and business-to-consumer trade;
- Coalesce the structure and content components of divergent XML initiatives into a
single usable XML business standard;
- Provide impetus so that common resources currently engaged in short-term vertical
solutions may/can be marshalled to reach a common long-term, horizontal solution;
- Support vertical and horizontal segments of industry and business participants;
- Avoid proprietary solutions that impose financial or software requirements constraints
on ebXML users to buy, install or programmatically support any ebXML unique
software products in the conduct of business information exchange;
- Strive to minimize costs of doing business electronically;
- Provide multi-lingual support;
- Accommodate national and international trade requirements;
- Provide a migration path from accredited EDI and developing XML business
standards to standards EDI/XML standards framework
The first phase of the project was completed in May 2001 with the production of an
architecture and other key specifications to allow e-Business. Using ebXML, companies now
have a standard method to exchange business messages, conduct trading relationships,
communicate data in common terms and define and register business processes. ebXML
activity is still ongoing under the control of the two bodies, UN/CEFACT and OASIS, that
oversaw the core project. The specifications are being refined and projects are underway
that demonstrate the viability and real-world use of ebXML.
The ebXML initiative is clearly modelled on the Open-edi architecture. As shown by studies
and reports
31
, produced by amongst others the ebXML Marketing Group, it effectively meets
the need of enterprises, of any size and in any geographical location, to be able to conduct
business electronically in a simple, reliable and cost-effective manner. ebXML achieves this
by providing companies with a standard method to exchange business messages, conduct
trading relationships, communicate data in common terms and define and register business
processes. It thereby makes it easier for organizations to interface with others within and
outside their industry, open up new markets with less effort than before and, at the same
time, cut costs and simplify process associated with traditional document exchange.
30
eBES has established a European web sitehttp://www.ebxml.eu.org/about_ebxml.htm to complement the
www.ebXML.org web site and provide key information focused on the particular needs of the European user
community
31
ebXML Adoption Update, December 2003.
(http://www.ebxml.org/documents/ebxml_adopt_update_122203.pdf, last accessed August 23)
e-Business Interoperability
25 September 2005
As a clear international acceptance that ebXML standards enable enterprises in any industry,
of any size, anywhere in the world to conduct business over the internet, the International
Standards Organisation (IS0) published a suite of four ebXML standards as ISO technical
specifications, ISO/TS 15000
32
:
· ISO/TS 15000-1: ebXML Collaborative Partner Profile Agreement;
· ISO/TS 15000-2: ebXML Messaging Service Specification;
· ISO/TS 15000-3: ebXML Registry Information Model;
· ISO/TS 15000-4: ebXML Registry Services Specification.
ebXML for managers
'ebXML for managers' is the English version/translation of the original Dutch booklet 'ebXML
voor managers'. Published and co-produced in December 2004 by Interpay and ECP.NL, the
booklet explains ebXML from a business perspective. As the title indicates it is intended for
use by business managers. It explains the EDI precursor background of ebXML, shows the
application possibilities by use of concrete recent business examples and gives an indication
of what companies should do to be able to use ebXML and to benefit from its use.
The booklet presents a 4-step process to describe ebXML and its introduction in a business
context. The following text and Exhibit 1-4 are adapted from the booklet.
Exhibit 1-4: ebXML in four steps
Modelling Profiling Contracting Exchange
Design Time Run Time
ebXML
Standardized
Process models
Company profile Agreement
ebXML in four steps
Source: ebXML for managers (2005)
The Four Steps
In step 1 the business processes are analysed and modelled. The result is a set of diagrams
and a number of candidate sub-processes and candidate data elements. These elements are
then placed in the ebXML registry and harmonised by UN/CEFACT with the processes and
data of other sectors. The aim is to reuse as many of the processes and data as possible so
that they can be used for information between the sectors. In general, at present, data and
processes are being modelled for many sectors, usually through trade associations or other
national sectoral initiatives.
32
ebXML OASIS Standards Approved Under ISO/TS 15000 Designation, 29 March 2004
(http://xml.coverpages.org/ISO-ebXML.html, last accessed August 23)
e-Business Interoperability
September 2005 26
In step 2 this data is made context dependent. Companies first determine in which context
(sector, region, product types, etc.) they will operate. This will determine the kind of data they
should use in their processes. For example a trader in perishable goods will include a best
before date in his delivery message while a steel manufacturer will not. The profiling is
performed entirely in the background. The only additional requirement is to add decisions
that the ebXML software itself cannot decide on the basis of the stored information. These
are typically the company rules that the trader must comply with, e.g. payment on delivery or
afterwards by invoice.
While the first two steps involve manual modelling activities, step 3 can be fully automated.
Companies that wish to do electronic business find each other’s profiles in the ebXML
Registry (or they simply send it to one another). If the two profiles match, they can be
combined into an ebXML agreement. This is an XML file or a set of XML files that is used by
the ebXML software in administration systems or web browser to control the collaboration
between the companies.
In step 4, the actual electronic transactions based on ebXML can start. Governed by the
agreement, the messages are extracted from the company applications, converted into XML
messages, packaged in secure network envelopes and sent via the internet. At the receiving
end the messages are unpacked, checked and confirmed. It is then read into the application.
All of this takes place automatically within the framework of a monitored business process.
This ebXML approach is set to become the preferred solution worldwide for regulated e-
business between partners. The approach is applicable to any business, and in any sector.
Furthermore a wide range of commercial and open source software (see www.freebxml.org)
is available to assist implementation and operation of the four steps.
The booklet also outlines how those who want to use ebXML in their sector should proceed.
It highlights the need for knowledgeable and expert staff to ensure effective implementations.
Another factor critical for success is that the ebXML infrastructure must be designed in
accordance with the standard, and NOT specifically for any of the partners.
Using some additional ebXML terminology, the following stages apply in implementation and
operation:
· Defining the company’s Business Processes;
· Describing the Semantics in Core Components;
· Determining where in the company’s process what information is needed from the
partner;
· Defining how to allow partners access to the company’s information (Messaging, Web
Services);
· Using the company’s Collaboration Protocol Profile (CPP);
· Storing the information in a Repository;
· On request by one or other partner, the CPPs of two trading partners that want to do
business are then matched to produce a Collaboration Protocol Agreement (CPA).
Both the CPP and CPA are machine readable XML documents. The CPA can be directly
used by middleware
33
or Enterprise Resource Planning (ERP)
34
systems to monitor and
manage network traffic.
33
Software that connects two otherwise separate applications: for example, there are a number of middleware
products that link a database system to a Web server. This allows users to request data from the database
using forms displayed on a Web browser, and it enables the Web server to return dynamic Web pages based
on the user's requests and profile.
34
ERP (Enterprise Resource Planning) is an industry term for the broad set of activities supported by multi-
module application software that help a manufacturer or other business manage the important parts of its
e-Business Interoperability
27 September 2005
Loosely bound
As part of the movement away from proprietary platforms, Web services rely on loose, rather
than tight, couplings among Web components. According to Brian Travis, SOAP consultant
and author, "Systems that rely on propriety objects are called tightly coupled because they
rely on a well-defined but fragile interface. If any part of the communication between
application and service object is disrupted, or if the call is not exactly right, unpredictable
results may occur." Traditional EDI is an example of a tightly-coupled framework for doing
electronic commerce. Loosely coupled systems allow for flexible and dynamic interchange in
open, distributed Web environments.
e-Business interoperability framework (ebXML based)
A simple graphic model summarising the components of the ebXML architecture outlined in
the previous section, together with additional considerations that need to be managed as part
of an e-Business Interoperability Framework is Exhibit 1-5. The chart is a variation on the
one presented by Schuldt
35
at the NIST e-Business Standards Convergence Forum meeting,
May 29, 2003).
Exhibit 1-5: e-Business Interoperability Framework
Business Applications (generally sector specific)
Partner
A
Outreach &
Policy
Business Processes
Component Elements
Registry & Repository
Trading Partner Profile
Transport & Package
Security
Partner
B
Technical Environment (generally partner unique)
Adoption of ebXML
The OASIS ebXML Awareness Team, with the assistance from OASIS member
organisations and partners, have compiled a report giving a global picture of the status of
ebXML adoption
36
. This December 2003 report summarises the status of around a hundred
completed, ongoing or planned ebXML-related projects. It also notes the increased
awareness of the extensive ebXML-related implementations and other activity already in
place across the globe.
The European Commission's Interchange of Data between Administrations (IDA) published a
study in September 2003, "Business to Business Frameworks for IDA Networks," stating:
ebXML is the only framework that is at the same time generic and flexible, and can be
used for inter-administrations relations. Moreover, ebXML is clearly the only trend for
organised business communities. The general recommendation is to follow ebXML
business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers,
providing customer service, and tracking orders. ERP can also include application modules for the finance and
human resources aspects of a business. Typically, an ERP system uses or is integrated with a relational
database system.
35
Schuldt, Ron. e-Business standards reuse, convergence, and deployment.
(http://www.mel.nist.gov/div826/msid/sima/ebsc/files/aia.pdf, last accessed August 23, 2005)
36
ebXML Adoption Update, December 2003.
(http://www.ebxml.org/documents/ebxml_adopt_update_122203.pdf, last accessed August 23)
e-Business Interoperability
September 2005 28
standards as much as possible. This is coherent with the fact that many exchanges
between European administrations reflect the interactions between those
administrations and the national business world
37
.
1.6.4 Web services
Web services are XML applications mapped to programs, objects, or databases or to
comprehensive functions. Using an XML document created in the form of a message, a
programme
· sends a request to a web service across a network; and,
· optionally, receives a reply, also in the form of an XML document.
Web services standards define the format of the message, specify the interface to which the
message is sent, describe conventions for mapping the contents of the message into and out
of the programmes implementing the service, and define mechanisms to publish and to
discover web services interfaces.
ebXML relationship to Web Services and the Semantic Web
ebXML and Web services are complementary sets of service-oriented architecture
technologies. In current practice, a number of their various elements are implemented in
combination. Because of this, a natural cross-fertilisation has occurred between the
technologies. For example, the ebXML Messaging Specification uses SOAP (Simple Object
Access Protocol) message headers, while its reliability model is being set as the standard for
Web services through the OASIS Web Service Reliable Messaging Technical Committee.
The complementarity of both ebXML and Web services is also mentioned in the previously
referenced “Business-to-Business Frameworks for IDA Networks” study published in
September 2003 by the European Commission's IDA (Interchange of Data between
Administrations):
Web Services and ebXML are not competing frameworks. They can be viewed as
serving two different B2B models and will continue to be used in parallel
36
.
ebXML provides core web services for e-Business. Exhibit 1-6: Core services for e-Business
shows how the ebXML specifications are positioned in the centre. The ebXML
implementation foundation comprises four components: messaging (ebMS), collaboration
profiles (CPPA), business process (BPSS) and metadata registry.
When considered as part of a wider component based web service offering, the technical
details of the wide range of standards yet undecided and under development for Web
Services becomes quite complex and diffuse. Many different proprietary offerings and groups
are struggling for primacy. Details of these standards and discussions are outside the scope
of this report as they are neither relevant nor required in this business perspective.
Nonetheless, Exhibit 1-6 provides a brief glimpse at the complexity, and hence uncertainty,
surrounding current web service standards. Thus, in general, when the choice permits and
the business needs demand, it is considered a safer option to adopt the proven EDI/XML
(ebXML) solutions now and to wait until web service standards settle into a more stable
configuration. As both approaches will coexist for some considerable time, the investment in
ebXML will continue to pay dividends for the foreseeable future.
37
IDAbc. Business to Business Frameworks for IDA Networks, September 2003
(http://europa.eu.int/idabc/en/document/1564/5587, last accessed August 23, 2005)
e-Business Interoperability
29 September 2005
Exhibit 1-6: Core services for e-Business
38
Source: Webber, David (20030909). Q&A with David Webber, Co-chair of the ebXML Joint Marketing Team
(http://www.developer.com/xml/article.php/3074481, last accessed August 23, 2005)
1.6.5 Grid Services
Will there ever be stable Web Service standards
39
? Future interoperability capabilities will be
greatly influenced by the transition from Web Services to Grid Services. Web Services
connect applications across large heterogeneous networks. As Web Services become widely
implemented and supplanted, the nature of applications will change to become more like
virtual enterprises: drawing on distributed resources as and when required. Thus, many
applications will be constructed dynamically from available services, depending on the
functionality that is needed or available. The expectation is that the standards requirements
focus will shift from application connectivity standards to infrastructure requirements, such as
the need to communicate across different operating systems, access files that are managed
by different file systems, operate in an environment where there are multiple administrative
domains, each with its own security approach, and operate in an environment where
individual resources can fail.
If, as some contend, the market for Web Services has peaked, and Grid Services are already
the next big venture, it is likely that there will never be fully stable Web Service standards. In
that event it is advisable for SME managers to be very cautious before risking their business
on unproven Web Services. ebXML represents a far safer and more viable option at this
time.
38
See Webber, David (20030909). Q&A with David Webber, Co-chair of the ebXML Joint Marketing Team
39
Grid computing - today and tomorrow: another view. Grid Today Vol. 1 No. 9 August 12, 2002
(http://www.gridtoday.com/02/0812/100221.html, last accessed 23 August 2005)
e-Business Interoperability
September 2005 30
1.7 European interoperability initiatives
The issue of interoperability has dominated standards work for well over a decade. For
example, in the mid 90s, ISOIEC JTC 1 established a Special Working Group reporting
directly to the JTC 1 plenary on Standards Conformance and Interoperability. While there
was some interest in this work it was generally perceived as being an additional overhead
and after 2-3 years the responsibilities of the group were evolved to the technical
committees. More recently there has again been a surge in interest in interoperability within
standards organisations.
European Standardisation organisations
Both CEN and ETSI have groups focused on interoperability. To a first approximation:
· CEN/ISSS Workshop eBIF
40
(e-Business Interoperability Forum) is a strategic policy
group which addresses business interoperability issues. CEN/ISSS eBES (e-business
Board for European Standardisation) Workshop, the "European Entry point" for the UN-
ECE/CEFACT electronic business standardisation process, produces consensus pre-
standards. The two groups are complementary and compatible.
· ETSI via its Interoperability PlugTests
41
and its recent focused conferences on
interoperability
42
is geared to address the technical issues.
Fact Box:
CEN and ETSI – European standardisation and interoperability
organisations
CEN is a multinational, multi-sector, highly decentralized organisation aimed
primarily at facilitating the emergence of coherent consensus between
economic partners who, within the framework of national delegation, or direct
industry participation depending on the ultimate deliverable, involve themselves
voluntarily in technical negotiations leading to the adoption of European
Standards and other CEN deliverables.
CEN/ISSS (Information Society Standardisation System) provides market
players with a comprehensive and integrated range of standardisation services
and products, in order to contribute to the success of the Information Society in
Europe. www.cenorm.be
ETSI, the European Telecommunications Standards Institute is an independent,
non-profit organisation, whose mission is to produce telecommunications
standards for today and for the future. Based in Sophia Antipolis (France), the
ETSI unites 688 members from 55 countries inside and outside Europe,
including manufacturers, network operators, administrations, service providers,
research bodies and users. The activities in telecommunications, broadcasting
and related standardisation are supplemented by interoperability testing
services and other specialisms. ETSI's prime objective is to actively support
global harmonisation.http://www.etsi.org
40
http://www.cenorm.be/cenorm/businessdomains/businessdomains/isss/activity/ebif.asp, last accessed 29
September 2005
41
http://www.etsi.org/plugtests/, last accessed 29 September 2005
42
http://www.etsi.org/pressroom/Previous/2005/2005_05_sos.htm, last accessed 29 September 2005
e-Business Interoperability
31 September 2005
The European ebXML Information Centrehttp://www.ebxml.eu.org/ was developed by eBES.
It complements the www.ebXML.org web site by providing key information in several
Community languages focused on the particular needs of the European user community and
by providing guidance to users on related subjects such as “How to migrate to ebXML”.
Unfortunately, the ebXML Information Centre is a little out-dated. Information is not current,
despite the fact that it is supposed to be maintained by eBES in collaboration with ebXML.org
and the ebXML Joint Marketing Team.
The aim of the European ebXML Information Centre is to add value to the international
ebXML deliverables by providing information in different European languages, adding a
missing component to meet European requirements where needed. Through this it aims to
assist in the education of user communities, developers and business experts on ebXML in a
comprehensive yet understandable manner.
The specific objectives of the European ebXML Information Centre are to:
· Disseminate outputs from the ebXML project;
· Support the dissemination of emerging standards in ebXML, including the outputs
from OASIS and UN/CEFACT, and also the outputs from the eBES workshop;
· Provide a central resource for organisations and individuals to access information on
the current state of developments in ebXML, and in wider XML standardisation;
· Provide a reference repository for ebXML standardisation related resources;
· Provide information to help the migration of EDI standards and systems to XML.
Each of the above groups has been relatively successful in relation to their stated goals and
individual schedules. In particular all have been very successful in bringing together technical
experts and managers and in establishing an extensive body of literature, presentations and
links to other organisations active in interoperability worldwide. This also includes two-way
links to the FP7 projects Interop NOE, ATHENA IP and the eBSC (e-Business Standards
Convergence) Forum based in US and for which NIST provides the Secretariat.
However successful eBIF has been for its current members, and the organisations they
represent, the multiplier effect of the limited number of active participants and limited
resources in eBIF is not sufficient to ensure that the information gathered is effectively
disseminated to all of the European business and technical managers who can use it. This is
effectively every SME manager in Europe. Both the frequency and content of dissemination,
and the methods of reach need to be appropriately increased.
What is required for such a breakthrough in implementation rates of EDI/XML to occur? This
is the key question. EDIFACT offered almost the same inter-company service level vista as,
for instance, ebXML does. EDIFACT was picked up by the large companies, yet hardly ever
by SMEs. In all probability, unless specific action is taken, the same could happen again and
the question becomes moot. Active dissemination, increased awareness and visible
leadership are required to show that ebXML is intuitively easier for SMEs to implement and
use, with consequent benefits for their companies, customers and suppliers.
e-Business Interoperability
September 2005 32
European Research and Technology Development Projects
Some highlights from the current active interoperability projects, especially any plans to work
with or involve SMEs in implementations, are summarises in the following table, Exhibit 1-7.
Exhibit 1-7: European RTD Projects on Interoperability
INTEROP
FP6 Network of
Excellence
www.interop-noe.org
The project is now entering the second half of its planned 36 month
lifespan. The main work following the FP5 IDEAS project is on:
- Architecture and platforms
- Enterprise modelling
- Enterprise ontologies
The scientific value added resulting from the fusion of these three multi-
disciplinary components has confirmed, to the consortium members, the
potential of an emerging research topic and associated establishment in
Europe of a virtual laboratory on Interoperability for Enterprise Software
and Applications (IESA). A proposal for creation of a European Master’s
degree programme in interoperability, when implemented will add
considerable value to the European Research Area. There is a good
public release of approved documents. Deliverable 12.1 Methodology to
implement services and develop take up actions towards SMEs is
available from the site and outlines the proposed methodology to
implement services and to develop take up actions towards SMEs.
Note: CRP Henri Tudor, the source of the business case in this report, is
a core member of the INTEROP NoE.
ATHENA
FP6 Integrated project
www.athena-ip.org
ATHENA builds upon the FP5 IDEAS project, with many of the original
project partners continuing to work together. The main objectives are to
lay down the foundation for long term research into interoperability from
a business perspective. Deliverable 3.5 ATHENA Contribution to
Interoperability Action Plan (Version 1, March 2005) identifies five initial
key component areas for a business interoperability framework: value
model, benchmarking, community and consensus building and e-
business digital divide. The latter relates to addressing the gulf that is
opening up between enterprises from different size-bands, and the
assistance that can be given to help SMEs understand and achieve the
benefits of e-business interoperability. ATHENA plans to work with
some SMEs, for the establishment of an Enterprise Interoperability
Centre (EIC), and for mechanisms to make the concept of
interoperability meaningful in business terms to a business audience.
The EIC will be terminated in 2007, based on current schedules, unless
it is independently viable by then.
Each of these projects could contribute to increasing take up of e-business in all sectors
across Europe. To do this credibly, they need access to, and support from, a wide range of
companies. They also need to establish positive partnerships with standards development
organisations and e-business interoperability standards policy groups in order to effectively
avoid duplication and realise the potential synergies that exist. At present, however, it
appears that a strong focus on collaboration with policy groups such as eBIF and
contributions to e-business standards convergence is lacking. Perhaps there is an
expectation that the work of UN/CEFACT Management Group Framework and eBSC
Model/Framework will deliver the latter in due course (see next section).
e-Business Interoperability
33 September 2005
1.8 Other interoperability initiatives
Two other major initiatives are of interest:
· ISO/IEC/ITU/CEFACT MoU Management Group Framework;
· NIST e-Business Standards Convergence (eBSC) model/framework.
ISO/IEC/ITU/CEFACT MoU Management Group Frameworkhttp://www.itu.int/ITU-T/e-business/mou/ provides access to an April 2005 presentation which
outlines the goals and achievements of the Memorandum of Understanding (MoU). The
business requirement is clear: e-business is becoming a cornerstone of the world economy;
full benefits for consumers, industry and government demand a coherent set of information
and communication technology standards that are “open, interoperable and internationally
accepted” so that they can:
· support dynamic development of e-business;
o across the manufacturing and service industries;
o along the global supply chain from supplier to consumer;
o throughout the lifecycle of products, which may be decades;
· and, provide effective services to the citizen.
The basic requirement identified in the MoU is for a single clear and unambiguous set of data
definitions and relationships as the basis for defining sharable sets of data for the different
processes in electronic business. Using this it will be easier to achieve modularity,
consistency and interoperability between the various standards used. The MoU Management
Group is the coordination authority for developing an integrated, modular architecture of
information for Electronic Business. The architecture must include as a minimum:
· clear, unambiguous definitions of the information, capable of interpretation into
multiple languages;
· fixed relationships between elements of information;
· hierarchies of information elements;
· identification of information that should be maintained through registration authorities.
The MoU recognises the responsibility of the participating International User Groups for
contributing to the specification of the requirements for standards for electronic business,
although they do not have a unique responsibility. Within this context, an agreed and
regularly updated division of responsibilities is issued. While most of the organisations
participating are global, CEN/ISSS is a “user signatory” to the MoU and participates in
Management Group activities.
NIST e-Business Standards Convergence (eBSC) model/framework
The e-Business Standards Convergence (eBSC) Forum is a collaborative effort open to
industry, government and global organisations and associations with active e-business
initiatives, standards development, conformance or interoperability testing activities.
Participants in the eBSC Forum are encouraged to work on the tasks defined by the Forum,
contribute to achieving convergence of e-business standards and cross-industry inter-
operability and champion these efforts in their industry and organisation. The results of the
eBSC Forum will be made available to the public on a royalty-free basis.
43
43
http://www.mel.nist.gov/div826/msid/sima/ebsc/
e-Business Interoperability
September 2005 34
Common framework
Exhibit 1-8: MoU Framework for e-business Standards
T
h
e
M
o
U
o
n
e
T
h
e
M
o
U
o
n
e
- -
B
u
s
i
n
e
s
s
S
t
a
n
d
a
r
d
s
B
u
s
i
n
e
s
s
S
t
a
n
d
a
r
d
s
e
B
u
s
i
n
e
s
s
R
e
q
u
i
r
e
m
e
n
t
s
Process Models, modelling tools and templates
User view
eg STEP ARM,
Information
in context
eg STEP AIM,
BIE
Core
information
eg STEP IR, TDED,
Core components,
BSR, ISO 15418
Aggregated
resources
eg STEP ARs,
Aggregate CC
Reference data
Code lists
Dictionaries
Catalogues
Object identifiers eg Shipping labels, UID
Terminology
Product
Classification
Data
S
c
e
n
a
r
i
o
m
o
d
e
l
l
i
n
g
Security
Non-repudiation
Access control
Availability
Confidentiality
Authentication
Integrity
Naming
conventions
Repositories
Legal and Commercial eg CPPA, DDR, IPR
Core ICT standards, eg RFID, AIT, telecoms, character sets
EDI
Language
bindings
Web
services
XML
eg ebXML,
UBL
STEP Part 28
Text
encoding
Other
encoding
eg ASN.1
Conformance
testing
Guidance eg MIG, PLCS DEX
Representation
Tech.
docs.
The MoU Framework for e-business standards is shown in Exhibit 1-8. It is aligned with the
Open-edi model, includes CEFACT and OASIS models; and is actively supported by the
NIST eBSC activity. Ideally the MoU Framework and the eBSC Framework/matrix will
converge to a single model in the short term
44
. Any sector will then be able to use the
converged framework model as a basis for e-Business Interoperability.
However, that is not an easy task. One of the difficulties in standards convergence is that few
standards overlap 100%. There are aspects on each standard that might be ideal in a
converged standard but then the problem of existing deployments of both standards remains.
When the number of standards to be converged increases the number of inter-linkages to be
managed grows much faster than just an n-squared problem as it could, for instance, be
necessary to simultaneously combine and restructure several different standards from
different sources. The challenge is that real convergence requires active good-will and
participation, not only from the bodies that create the standards, but also from those who
have created/deployed or are about to create/deploy existing or emerging standards. It is
envisaged that the converged model will also include an open registry for e-business
standards work. For this metadata and a federated update mechanism is expected to be put
in place, with moderation for consistency.
44
Aerospace Industries Association. Presentation at eBSC Meeting on May 6, 2005http://www.mel.nist.gov/div826/msid/sima/ebsc/files/aia_ebiz_interop_strategy.pdf
e-Business Interoperability
35 September 2005
2 Survey results on Standards & Interoperability
This chapter presents the background to and the analysed results of some of the survey
data. The intent is to accurately describe the results from the survey and to summarise and
present these results in a readable and usable manner. To this end, as far as possible all
results are expressed in terms of enterprise size-bands. No explicit reference is given to
weighting the results for employment or national distributions.
The interpretation of the charts and tables included in this section would require extensive
micro-analysis and details on the circumstances of the companies concerned. That is not the
purpose of the report. The objective is to take a high-level view of e-business interoperability
and standards issues and describe what is found. The following Socratic type dialog taken
from Bruno Latour’s unpublished draft A prologue in the form of a dialog between a student
and his (somewhat) Socratic Professor
45
emphasises the importance of an accurate
description. In the extract, S denotes the student and P denotes the professor:
S – But you always need to put things into a context, don’t you?
P — I have never understood what context meant, no. A frame makes a picture look
nicer, it may direct the gaze better, increase the value, but it doesn’t add anything to
the picture. The frame, or the context, is precisely the sum of factors that make no
difference to the data, what is common knowledge about it. If I were you, I would
abstain from frameworks altogether. Just describe the state of affairs at hand.
S — ‘Just describe’. Sorry to ask: but is this not terribly naïve? Is this not exactly the
sort of empiricism, or realism, that we have been warned against? I thought your
argument was, how should I say? more sophisticated than that.
P — Because you think description is easy? You must be confusing description, I
guess, with strings of clichés. For every hundred books of commentaries, arguments,
glosses, there is only one of description. To describe, to be attentive to the concrete
states of affairs, to find the uniquely adequate account of a given situation-- I have,
myself, always found this incredibly demanding.
The underlining is not in the original extract. It has been added to emphasise the point being
referenced for this report regarding the importance of accurate descriptions prior to any
analysis and commentary.
The information about the attitude of companies in each of four enterprise size-bands across
9 sectors is an important asset. It is essential vital that the information be described and
presented just as it is. The primary purpose of the following pages therefore is to present a
rich summary of the information, in a format that is as readable and understandable as
possible. There are commentaries in each sub-section. However the primary value of this
chapter lies in the accuracy of the description. Only through that will it be possible to derive
the true and uniquely adequate account of interoperability across the sectoral and enterprise
size differences.
45
Latour, Bruno. A prologue in form of a dialog between a student and his (somewhat) Socratic professor
(www.ensmp.fr/~latour/articles/article/090.html, last accessed August 23, 2005)
e-Business Interoperability
September 2005 36
2.1 The research questions
The application of technology to business must be driven by business strategy, not the other
way around. ICT is just a tool. Standards and interoperability are each a means to an end.
They are not ends in themselves. In this vein, interoperability is best viewed as a continuum.
It is not a binary option: either 100% present or not. There are different levels and nuances of
interoperability possible. Interoperability is generally a multi-layered service, with specific
measurable value to the business partners involved, rather than solely an abstract idealised
binary choice. The research questions addressed in the study are therefore:
· How do companies perceive the importance and role of standards for e-business
interoperability, specifically application to application interoperability?
· What constitutes the essential cross-firm and cross-industry elements of EDI-based
trading and its current successors? What interoperability elements of B2B ICT
infrastructures need to be harmonized or standardized and what are the current
perceptions regarding some specific standards issues? What are the implications for
standards policy from the result?
· Are interoperability frameworks now the main driver in e-business standards
activities? What are the overall implications, with particular relevance to
implementation issues and SMEs?
· Do replies to the above questions imply a requirement for dramatic change and
innovation in standards policy?
The responses to the e-Business Survey 2005 are analysed and presented according to firm-
size and industry sector. Note that geographical region is not considered a major factor in
B2B interoperability requirements, and thus the analysis and data presented makes no
reference to national identities.
2.2 The e-Business Survey 2005
e-Business W@tch collects data on the use of ICT and e-business in European enterprises
by means of representative surveys. The e-Business Survey 2005, which was the third
survey after those of 2002 and 2003, had a scope of 5,218 telephone interviews with
decision-makers in enterprises from seven EU countries (the EU-7, i.e. Czech Republic,
France, Germany, Italy, Poland, Spain and the UK), which account for roughly 75% of the
EU-25 population and GDP.
The survey was carried out as an enterprise survey: data collection and reporting focus on
the enterprise, defined as a business organisation (legal unit) with one or more establish-
ments. Interviews were carried out in January and February 2005. Except for the aeronautics
industry, where only 163 company interviews could be realised due to the small universe of
firms in this sector in the EU-7, about 560 interviews per sector were conducted.
46
In contrast to the surveys of 2002 and 2003, the survey of 2005 considered only companies
that used computers. Thus, the highest level of the population ("base") was the set of all
computer-using enterprises that were active within the national territory of one of the
respective countries, and that had their primary business activity in one of the sectors
specified by NACE Rev. 1.1 categories. Therefore it makes a difference if a figure represents
a percentage of "all companies" (as in 2003) or a percentage of "companies using
46
The survey was conducted using computer-aided telephone interview (CATI) technology. Field-work was
coordinated by the German branch of Ipsos GmbH (www.ipsos.de) and conducted in co-operation with local
partner organisations.
e-Business Interoperability
37 September 2005
computers" (as in 2005). Differences are much less pronounced, though, when figures have
been weighted by employment.
47
The second important difference between the 2003 and
2005 surveys concerns the configuration of sectors. Three very large sectors (retail, health,
business services) that had a major impact on aggregate results in 2003 were not continued
in 2005. Instead, another huge sector (construction) was introduced. For these reasons,
direct comparisons of aggregate results should be cautiously made and only with explicit
reference to these differences.
Sample Sizes
The sample size per sector and per enterprise size-band is shown in Exhibit 2-1.
Exhibit 2-1: e-Business Survey 2005: Sample Size per Sector per Enterprise size-band
Enterprise
Size-band
F
o
o
d
T
e
x
t
i
l
e
P
u
b
l
i
s
h
P
h
a
r
m
a
M
a
c
h
i
n
e
A
u
t
o
A
e
r
o
C
o
n
s
t
r
T
o
u
r
i
s
m
I
T
S
e
r
v
Enterprise
size-band
Totals
s1-micro 194 188 192 182 192 179 88 192 193 196 1796
s2-small 145 146 148 160 147 149 42 145 145 146 1373
s3-medium 168 171 170 140 169 167 20 169 171 171 1516
s4-large 64 56 53 50 57 70 13 60 58 52 533
Sector
Totals 571 561 563 532 565 565 163 566 567 565 5218
This special cross-sector study makes no reference to the country distributions. It is
considered that while there may be cultural differences in the attitude to standards, and
differences in attitudes to business collaboration and take-up of technology standards, the
differences between countries also reflect the existing sector distributions.
Enterprise size-bands
This report concerns the status, attitude and behaviour of firms to e-business interoperability
and standards. In view of this subject matter, the report uses unweighted data on the number
of firms by sector. Where relevant and statistically correct, information is presented by
enterprise size-band. Because of the low number of companies surveyed in the aerospace
sector, caution is advised when working with enterprise size-band data for that sector.
Treatment of "don’t know" answers
The replies to the questions in the e-Business Survey 2005, which provide the raw data for
the analyses in this chapter, are generally answerable by a simple yes or no. In those cases
the data presented first excludes the Don’t Knows e.g. the fraction of those who reply in the
affirmative are calculated (per enterprise size-band, per sector) by dividing the number who
respond yes by the sum of the numbers who respond either with yes or no. This fraction is
then converted directly into a percentage figure.
A “Don’t Know” for direct questions, with an expected answer of yes/no, may arise due to
lack of immediate knowledge on the part of the survey respondent, or may also be due for
instance to uncertainty about the question, or indeed their company strategy in a particular
area. In all cases it is possible for the reader of this report to make alternative calculations by
47
Employment-weighted figures should be read as "enterprises comprising x% of employees" in the respective
sector (or country). Employment weighting is useful because, due to the significantly greater number of micro-
than non-micro-enterprises, un-weighted figures would effectively represent mainly the smallest sizes of firms.
e-Business Interoperability
September 2005 38
combining the information given on the effective sample sizes in the analysis together with
the data in Exhibit 2-1: e-Business Survey 2005 Sample Size per Sector per Enterprise size-
band.
Exclusion of tourism sector
As this report is concentrating to a large extent on interoperability in the manufacturing
sectors, the tourism sector was excluded from the standards questions. This means that, in
most instances presented in this report, the overall survey population size is reduced by 567
i.e. from 5218 to 4651 companies.
48
Further information
More detailed information about the survey methodology, including information about
sampling and the business directories used, the number of interviews conducted in each
country and sector, and data on non-response rates, are available in the Methodology Annex
and on the e-Business W@tch website at www.ebusiness-watch.org/about/methodology.htm.
2.3 Do standards matter in innovation?
Although not the first question addressed as part of the “Standards Group” of questions in
the e-business Survey 2005, the question on the importance attributed to standards in
relation to innovation is one of the most important questions in the entire set. Thus the
question and the responses to the question are addressed first in this analysis.
A steady stream of new products, services and business processes are pre-requisites for the
jobs and sustainable growth envisaged in the Lisbon Agenda. Some innovations do not
require consideration of existing or new standards. Some do. How can one distinguish
between the two types?
This survey question was direct. It reads “Does your company take into account industry
standards and specifications when making decisions on what technology and data standards
to use for new product, services or business processes?" The spectrum of the response is
clear, but complicated, as can be seen from Exhibit 2-2.
The resounding answer to this question is "Yes – standards do matter". The enterprise size-
band trend is similar for all sectors. It should be noted that the lower value of the large
companies in the Aerospace for medium and large enterprises is marked in red in the table.
The number of observation points is low and this means that the associated error margins,
and confidence intervals widen. Nonetheless, apart from these two elements the rest of the
graphic is meaningful and can be considered as accurate.
The fundamental measure of the value of standards is the number of implementations or the
number of enterprise strategies that explicitly include standards as a necessary critical
element. Three quarters of all of the large enterprises across the companies confirm that
they take standards into account, whereas the figure is much lower at between 20-30% for
micro companies, with small and medium companies taking up intermediate positions in
each of the sectors.
48
The exclusion of the tourism sector from the standards questions was mistakenly not taken into account in
compiling some of the tables in the e-Business W@tch publication "A Pocketbook of e-Business Indicators
2005". The corrected figures are contained in this report. Additional differences, if any, can be attributed to the
exclusion of "Don’t Knows" from the analysis for this report.
e-Business Interoperability
39 September 2005
Full assessment of these results would require a panel of sector and standards experts who
can compare their sectors with deep knowledge of the parameters that contribute to choice
of standards. This could be a very simple task, but there is a distinct benefit for all from
completing the business and technology views and documenting the findings for use by all
companies within the sector and across sectors.
Exhibit 2-2: Do standards influence decisions on new products, services or processes?
0
10
20
30
40
50
60
70
80
90
100
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s3-small s2-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
Size-
band
Avg
s1-micro
19.3
(187)
20.4
(181)
32.8
(180)
31.8
(170)
33.2
(187)
21.4
(173)
22.6
(84)
20.0
(180)
59.3
(189)
30
(1531)
s3-small
26.3
(133)
29.0
(138)
48.6
(140)
41.6
(154)
44.4
(142)
42.0
(143)
35.0
(40)
28.1
(139)
71.1
(142)
41
(1171)
s2-medium
57.8
(161)
43.7
(158)
60.5
(157)
8.2
(129)
59.5
(163)
62.7
(153)
66.7
(18)
44.0
(159)
74.7
(166)
59
(1264)
s4-large
80.0
(60)
59.3
(54)
75.5
(49)
71.1
(45)
76.8
(56)
76.5
(68)
45.5
(11)
67.9
(53)
86.5
(52)
74
(448)
SectorAvg
39
(541)
34
(531)
49
(526)
48
(498)
48
(548)
46
(537)
33
(153)
34
(531)
70
(549)
46
(4414)
Graphic: Percentage of firms by size-band within sector that take technology or data standards into account in new product,
service or process development. In % of firms. Base: All firms, excluding Tourism sector and Don’t Knows.
Table cells : Percentage of firms within enterprise size-band, or column/row totals, and N data in round brackets.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 40
2.3.1 I s i nt r a-sec t or al i nt er oper abi l i t y c r i t i c al f or e-busi ness?
Again the answers are generally a resounding yes. Typically 40% of large firms across all
sectors believe that intra-sectoral standards are critical for them to do business. At the same
time there are possibly up to 60% of large companies that do not consider these standards to
be essential. The picture is even more pronounced when micro companies are examined.
The lowest micro company data figure is reported by the food sector. The percentage
considering e-business standards as critical for success is less than 10%. The responses
received relate to the demand for information on standards and to a lesser extent for
participation and access to influencing the standards process.
Exhibit 2-3: Is interoperability within your sector critical for your e-business?
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
Size-
band
Avg
s1-micro
8.3
(60)
25.3
(75)
27.2
(103)
14.8
(88)
25.0
(76)
18.3
(71)
13.7
(51)
12.2
(74)
32.7
(165)
21.9
(763)
s3-small
26.4
(53)
23.9
(67)
31.5
(89)
20.0
(95)
20.3
(79)
22.5
(80)
20.8
(24)
15.3
(59)
36.4
(129)
25.5
(675)
s2-medium
36.8
(95)
27.7
(94)
35.2
(125)
34.4
(90)
31.5
(108)
34.2
(111)
46.2
(13)
16.5
(97)
37.4
(139)
32.3
(872)
s4-large
55.3
(38)
40.0
(35)
40.9
(44)
38.9
(36)
39.0
(41)
51.0
(49)
40.0
(5)
37.8
(37)
46.7
(45)
43.9
(330)
SectorAvg
30.5
(246)
27.7
(271)
32.7
(361)
24.9
(309)
28.0
(304)
30.2
(311)
21.5
(93)
18.0
(267)
36.4
(478)
29.0
(2640)
Base: All firms, excluding Tourism sector. Analysis excludes Don’t Knows and NULLS (current best case scenario)
Graphic: Percentage of firms by size-band within sector excluding Don’t Knows and NULLs.
Table cells : Percentage of firms by size-band within sector, or column/row totals, and N data in round brackets.
To be read as “…% of enterprises excluding Don’t Knows and NULLs, in the … size-band in the … sector, consider that
interoperability is critical for e-business between their enterprise and other enterprises IN the same sector.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
41 September 2005
2.3.2 I s i nt er -sec t or al i nt er oper abi l i t y c r i t i c al f or e-busi ness?
First observation is that it is the large companies that have the biggest requirements for inter-
sector interoperability. In some cases (pharmaceutical, automotive, and aeronautics) the
expectations of the medium sized companies are seen to soar way beyond those of the other
enterprise size classes. As previously observed the table data highlighted in red indicates
that little confidence should be placed on those particular enterprise size-band data values
for Aerospace.
A comparative analysis of the responses regarding inter- and intra-sector indicates a greater
demand will be met for each of the 9 sectors, by focusing on convergence of standards
within sectors. This is not surprising. Neither on reflection is the higher critical need
expressed by SMEs for cross-sector standards. It is however unlikely without some direct
action that the “tail (small companies) will ever wag the dog (large companies)”.
Exhibit 2-4: Is interoperability with companies in other sectors critical for your e-business?
0
5
10
15
20
25
30
35
40
45
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
Size-
band
Avg
s1-micro
10.2
(59)
23.0
(74)
20.4
(103)
12.6
(87)
16.0
(75)
13.2
(68)
7.8
(51)
2.7
(73)
24.7
(162)
16.2
(752)
s3-small
25.0
(52)
13.6
(66)
29.2
(89)
14.6
(96)
12.7
(79)
17.9
(78)
4.0
(25)
13.1
(61)
28.1
(128)
19.4
(674)
s2-medium
25.3
(95)
19.6
(92)
27.4
(124)
26.7
(90)
19.6
(107)
29.6
(108)
23.1
(13)
13.5
(96)
30.4
(138)
24.4
(863)
s4-large
42.1
(38)
33.3
(36)
34.1
(44)
17.1
(35)
37.5
(40)
22.4
(49)
20.0
(5)
25.0
(36)
31.8
(44)
30.3
(327)
SectorAvg
24.2
(244)
20.9
(268)
26.7
(360)
17.9
(308)
19.3
(301)
21.8
(303)
9.6
(94)
12.0
(266)
28.0
(472)
21.5
(2616)
Base: All firms, excluding Tourism sector. Analysis excludes Don’t Knows and NULLS (current best case scenario)
Graphic: Percentage of firms by size-band within sector excluding Don’t Knows and NULLs.
Table cells : Percentage of firms by size-band within sector, or column/row totals, and N data in round brackets.
To be read as "…% of enterprises excluding Don’t Knows and NULLs, in the ... size-band in the ... sector, consider that
interoperability is critical for e business between their enterprise and other enterprises IN the same sector.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 42
Key messages from Section 2.3
Common points in all discussions on the responses:
Looking at the data points for each sector, and the average values per sector
and per enterprise size class for the entire sample, a set of questions can be
addressed to many of the charts:
· What is the appropriate target, and why should it be so, for the measured
value per enterprise size-band?
· What circumstances will yield a basically identical percentage across all
enterprise size-bands in a given sector (as shown most nearly for instance
in the IT services sector)?
The answer to both questions is most likely to be strongly sector structure
dependent. In that case, it is useful to understand the underlying driving forces
and so help SMEs to set their own goals with a clear sector specific
understanding of what standards must be taken into account in their work.
Such detailed sector level answers, to the range of the questions asked, would
produce a set of powerful sector specific standards roadmaps, which
depending on how the roadmap construction and maintenance processes are
conducted could become a valuable resource for all enterprises in the sector.
Such roadmaps could also identify whether there were a characteristic
signature in terms of the relative values of the average responses across
sectors per standard area. The roadmap could also be the basis for a cross-
sectoral review of common standards and potential for increased
harmonisation between sectors.
Taken in conjunction with other additional questions, such as those in the
following sections, the roadmaps would acquire several dimensions which can
be drilled down to get an overview on common interoperability practices and
targets for all layers and levels of interoperability.
2.4 Current usage of EDI and plans for XML standards
There is nothing particularly exceptional about the figures shown Exhibits 2-5 and 2-6. Large
companies dominate EDI usage, especially in the Food and Automotive sectors. The IT
services sector is low in reported EDI usage, but the leader by far in the reported use of
XML-based standards for EDI. The interesting question is what should the values be for a
given enterprise size-band in a given sector (e.g. what values do the leaders in each of the
size-bands achieve or aim to achieve?). In addition what is the rationale for the projections
and how can the ideal figures be achieved? What collaboration is required to facilitate and
accelerate the transition to XML?
A comparison of Exhibits 2-5 and 2-6 indicate that sectors with highest implementation of
EDI (Food and Automotive) also have the lowest implementation level of XML. Construction
is low on both categories.
e-Business Interoperability
43 September 2005
Exhibit 2-5: Use of EDI-based standards by enterprise size-band per sector
0
10
20
30
40
50
60
70
80
Food Textile Publish Pharma Machine Auto Aero Constr ITServ
s1-micro s2-small s3-medium s4-large
Base. All enterprises, excluding Tourism and Don’t Knows (N=413,454,468,409,487,420,139,492,464)
Source: e-Business W@tch (e-Business Survey 2005)
Exhibit 2-6: Use of XML-based standards by enterprise size-band per sector
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Base. All enterprises, excluding Tourism and Don’t Knows (N=413,454,468,409,487,420,139,492,464)
Source: e-Business W@tch (e-Business Survey 2005)
A further series of Exhibits 2-7 to 2-10 provides a separate set of analyses of the percentage
of types of EDI used by enterprise size-band and by sector. The tables are easy to read but
are relatively unexceptional in the absence of the micro-level detail on the sectors and
countries that would explain the figures. Having a view on the rate at which companies were
planning to move from EDI to XML would be more interesting. This is provided in the
following sub-section.
e-Business Interoperability
September 2005 44
Exhibit 2-7: Use of EDI and types of EDI used per enterprise size-band
Percentage usage by each type of EDI
Horizontal (three) rows sum to 100 (N) data in last row
% of Enterprise
Size-band …
(N) Use EDI
Of this size-band
...% use Standard
EDI
Of this size-band
...% use Internet-
based EDI
Of this size-band
...% use both
standard and
Internet-based EDI
Micro (1498) 2.9 22 37 41
Small (1122) 8.0 29 39 32
Medium (1230) 18.6 33 34 33
Large (440) 41.4 39 25 36
Average per
sampled firm
(4290)
12.7 34 32 34
(173) (164) (177)
Base: All firms, excluding Tourism sector and Don’t Knows. N data in round brackets.
Table cells : Percentage of sampled firms by enterprise size-band that use EDI-standards. Within these the percentage by size-
band that use specific types of EDI-standards.
Source: e-Business W@tch (e-Business Survey 2005)
Exhibit 2-8: Use of EDI and types of EDI used per Enterprise size-band
5
9 10
14
20
15
41
44
40
40
27
36
0%
20%
40%
60%
80%
100%
Standard EDI Internet-based EDI Both
s4-large
s3-medium
s2-small
s1-micro
Base: All firms, excluding Tourism sector and Don’t Knows. N data in round brackets.
Table cells : Percentage of sampled firms by enterprise size-band that use EDI-standards. Within these the percentage by
enterprise size-band that use specific types of EDI-standards.
Source: e-Business W@tch (e-Business Survey 2005)
Of which …
Enterprise
Size-Band
%Firms that use
EDI-standards
%Firms that use
Standard EDI
%Firms that use
Internet-based
EDI
%Firms that use both
standard and Internet
based EDI
Micro 7.9 5 9 10
Small 16.5 14 20 15
Medium 42.1 41 44 40
Large 33.5 40 27 36
(N) (544) (173) (164) (177)
e-Business Interoperability
45 September 2005
Exhibit 2-9: Type of EDI use: percentage of each type of EDI per sector
37
40
33 34
26
29
46
43
22
37
29
38
34
31
30
15 21
28
25
31
29
32
43
41
38
36
50
0%
20%
40%
60%
80%
100%
F
o
o
d
T
e
x
t
i
l
e
P
u
b
l
i
s
h
P
h
a
r
m
a
M
a
c
h
i
n
e
A
u
t
o
A
e
r
o
C
o
n
s
t
r
I
T
S
e
r
v
Both
Internet-based EDI
Standard EDI
Base: All firms, excluding Tourism sector and Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005)
Plans for move from EDI to XML standards
Approximately 10% (544) of the survey population indicated they would change from EDI to
XML over the next 12 months. This number was not sufficient to do a meaningful sector
based analysis. Therefore, the statistic presented here refers only to the enterprise size
analysis.
Exhibit 2-10: Intends to replace EDI by XMl within the next 12 months
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
%yes
s1-micro
s2-small
s3-medium
s4-large
Base. Companies that use EDI. Excluding Tourism, NULLs and Don’t Knows The full sample set was 544. Don’t knows by size
class (u,s,m,l) was 5, 11, 30, 22 hence N= 38, 79, 199, 160
To be read as …% of respondents per enterprise size-band … reported that they intended to replace EDI-based solutions for
electronic data interchange with XML based solutions within 12 months.
Source: e-Business W@tch (e-Business Survey 2005
The micro-companies indicated the highest percentage of intention to move from EDI to
XML. This is consistent with the lower running costs, and re-assuring to an extent that such a
large proportion was prepared to make the move. It is possible of course, as there is no
visibility on the sectoral de-composition that the small companies are moving in accordance
with the similar type move indicated by the large companies.
e-Business Interoperability
September 2005 46
2.5 Comparative data between e-Business Surveys 2003 and
2005
It is not usually easy to compile useful comparative data from different surveys. This is also
true for comparisons between the results of the e-Business Surveys 2003 and 2005. The
reasons are clear. The sectors included vary from survey to survey, in line with the policy
areas that are uppermost at the time of design; and also the countries in which the survey is
conducted change from survey to survey. Thus only limited comparability is possible as the
configuration of countries differs by sector. In addition, the questions are not usually all kept
constant. The matters raised depend on the requirements prevalent at the time of design.
However, in keeping with the contention that sectors tend to transcend the national
perspectives in line with the European freedoms of movement and easier cross-country
trading, it was decided to select a question that was common to both surveys and analyse
the data returns for the same sectors in both surveys.
The chosen question, for comparison purposes, was practically identical in both surveys:
Please tell us which of the following standards your company uses. Do you use … (item a-e)
a) EDI-based standards, for example EDIFACT, EANCOM, ANSI X12, or TRADCOM;
b) XML-based standards such as cXML, UBL, RosettaNet, xCBL;
c) the STEP standard for the exchange of product model and design data;
d) Proprietary standards agreed between you and your business partner;
e) Any other technical standards.
The resulting comparative data are presented in Exhibit 2-12.
Moreover, two somewhat related sectors, namely ICT services and IT services were included
in the comparison. Data for 2003 is in % of enterprises per enterprise size-band within
sector. Likewise, data for 2005 is also in % of enterprises per enterprise size-band within the
same or directly related sector. For comparative purposes, both charts include “Don’t Knows”
in the calculations. Data presented represent the arithmetic mean of all countries surveyed in
the sector. As noted in the Exhibit footnote, the countries differed between the two surveys.
The conclusions are striking. Data indicate that there has been a multi-fold increase in the
usage of all types of EDI, and of the other technical standard categories listed, across all
enterprise size-bands. Of course the difference may be attributable, at least in part, to the
change in the basic selection process for firms to be interviewed (the 2005 study was
confined to those companies that used computers). Thus, the 2005 figures would tend to be
elevated over the 2003 data. The variation in the countries surveyed for the same sector in
the different surveys may also have an impact.
However, it is believed that the differences are in fact real and represent a significant
increase in e-business take up within the textile sector.
e-Business Interoperability
47 September 2005
Exhibit 2-11: Comparative data for types of standard used
From e-Business Survey 2005
17.2
9.2
8.7
6.0
1.6
5.1
4.2
14.8
17.0
30.8
6.2
9.2
18.8
13.0
32.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Textile Auto IT Serv
EDI XML STEP Prop Other
From e-Business Survey 2003
6
5
1
2
3
5
9
15
3
5
7
2
20
3 0
0
2
4
6
8
10
12
14
16
18
20
Textile Automotive ICT services
EDI based XML based STEP Proprietary standards Other
Base (2005): all enterprises from the sectors, EU7 (DE, ES, FR, IT, UK, CZ, PL). N=561, 565, 565
Base (2003): all enterprises from the sectors, EU5 (DE, ES; FR, IT, UK). N=501, 501, 501
In % of enterprises by enterprise size-band, including Don’t Knows for comparative purposes.
Source: e-Business W@tch (2003 and 2005)
The main reason for this confidence is the great collaborative development that has been
accomplished during the past few years in Europe by the companies involved in the
CEN/ISSS Workshop TEX-SPIN (TEXtile Supply Chain Integrated Network) which produced
CWA 14948
49
Guidelines for XML/EDITEX messages in the textile/clothing sector. The
ongoing work of the follow-on workshop CEN/ISSS Tex-Weave demonstrates the continued
interest. The TEX-SPIN Workshop was promoted by a European consortium led by Euratex,
the European Apparel and Textile Organisation based in Brussels.
The relative usage per sector of standards in addition to EDI and XML is indicated in Exhibit
2-13. The significant information to notice is that for each sector there is a high percentage
49
CEN/ISSS. CWA 14948. Guidelines for XML/EDITEX messages in the textile/clothing sector.
(http://www.cenorm.be/cenorm/businessdomains/businessdomains/isss/cwa/textilecwa.asp, last accessed
August 23, 2005).
e-Business Interoperability
September 2005 48
use of proprietary and other standards. Taking Other to mean bilateral standards mutually
agreed between partners and Proprietary to mean standards defined for instance by the
major partner, it is evident that there is a huge opportunity for application of a more open
framework. Such a move will increase flexibility of partner agreements and ultimately save on
costs for each of the partners.
Exhibit 2-12: Type(s) of other standards in use, by sector
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
STEP Proprietary Other
Food TextilePublishPharma Machine Auto Aero ConstrIT Serv Avg
EDI-based
22.2
(531)
13.9
(527)
8.4
(511)
16.7
(491)
7.1
(524)
18.8
(517)
9.2
(153)
5.4
(520)
10.1
(516)
12.7
(4290)
XML-based
8.5
(527)
9.4
(524)
17.2
(516)
11.1
(486)
8.6
(524)
6.7
(511)
8.3
(156)
6.1
(522)
35.2
(528)
12.7
(4294)
STEP
1.1
(529)
1.7
(519)
2.5
(517)
2.9
(490)
6.0
(529)
5.7
(512)
7.1
(156)
2.3
(521)
4.7
(516)
3.5
(4289)
Proprietary
14.8
(541)
15.7
(528)
19.9
(522)
16.3
(498)
17.6
(539)
18.2
(527)
21.6
(153)
12.4
(532)
33.3
(522)
18.6
(4362)
Other
5.4
(540)
6.6
(528)
12.5
(520)
9.0
(489)
10.1
(533)
10.0
(519)
12.0
(158)
9.1
(528)
20.5
(517)
10.4
(4332)
Base: All firms, excluding Tourism sector and Don’t Knows.
Graphic: Percentage of firms by sector using STEP, Proprietary or Other technical standards for exchange of electronic data.
Table cells : Percentage of firms within enterprise size-band, or column/row totals, and N data in round brackets.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
49 September 2005
2.6 Perceived standards development/implementation gaps
An important standards policy and strategy related finding, from the e-Business Survey 2005,
is an indication of the level of dissatisfaction shown in Exhibits 2-13 and 2-14 concerning
some vitally important standards areas:
· Systemic business functionality:
o data protection and privacy
o information and information systems security
o identity management and authentication
o digital rights management
· Business transaction functionality
o product/component catalogues and classification
o transaction processing / business messaging
The concerns, reported by enterprise size-band within each sector, may be caused by
inadequate standards, or due to a lack of widespread implementation of existing standards.
The precise cause is not the issue right now. It is sufficient to know that significant levels of
concern have been voiced across all sectors and across all enterprise size-bands. The
variation within sectors across different enterprise size-bands indicates that not all firms see
the issues in the same light. Likewise, the variation between sectors on specific standards
issues indicates that there are differences of perception across sectors on even the most
systemic of fundamental standards needs such as security.
Data in Exhibit 2-13 indicate, in particular, that there are strong reservations about security
and data protection/privacy standards/implementation. These perceived gaps must be
addressed in the same timeframe that new XML standards for trading are being introduced. If
not, or if there is not at least a plan, then the potential benefits from investment in XML will be
stunted. However the picture may not be as bleak as it first seems. Security of the messages
and data protection around the transactions and other personal information can be overlaid
onto ebXML applications, for instance, before these capabilities are introduced.
The levels of dissatisfaction for Digital Rights Management and Identity Management are
also relatively high across all sectors. These are noted and merit a detailed analysis of the
causes for the differences in each sector studied. It is not clear for instance whether the DRM
concerns in the aerospace industry relate to in-flight entertainment or to intellectual property
rights in relation to design elements of the aircraft components. It is recommended that
experts in each sector consider this data and determine to the best of their abilities the root
causes for the reported values.
Once that is done it would be instructive and likely also very productive to pool the views of
each of the sector experts and produce a consolidated cross-sector view of each of the
standards areas examined.
The contrast between these figures per sector to the results from a related question in the e-
Business Survey 2003 (November) is striking. When asked, in 2003, whether they see
obstacles to electronic business stemming from a lack of technical standards a majority
(about 3 in 4 companies) said they did not see any obstacles, leaving less than 20% of firms
perceiving problems and 7% undecided. There were hardly any differences by sector.
Comparing size-bands, the awareness for obstacles was slightly higher among medium
sized and large enterprises than among small firms.
e-Business Interoperability
September 2005 50
Exhibit 2-13: Significant standardisation development or wider implementation is required:
systemic business functionality
Note: The charts below are valid for all sectors except Aerospace. Due to the lower sample sizes, special caution
needs to be exercised in any deductions regarding this analysis by enterprise size-band in the Aerospace sector.
Data Protection or Privacy
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Information and Information Systems Security
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Identity Management and Authentication
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Digital Rights Management
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Base: Companies who take standards into account when developing new products or processes.
To be read … % of firms in the … enterprise size-band within the … sector who report that they take standards into account
when developing new products or process consider that standards for …(specify name of standards area) need to be improved
significantly or implemented widely in order to be able to realise the full success of e-business in that sector.
Responses are expressed in % of firms per enterprise size-band within sector, excluding Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005).
e-Business Interoperability
51 September 2005
Data in Exhibit 2-14 indicate significant levels of concern ranging up to 50% among the
sampled companies, in particular the medium size-band enterprises.
Exhibit 2-14: Significant standardisation development or wider implementation is required:
business transaction functionality
Note: The charts below are valid for all sectors except Aerospace. Due to the lower sample sizes, special caution
needs to be exercised in any deductions regarding this analysis by enterprise size-band in the Aerospace sector.
Product / Component Catalogues & Classes
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Trans Processing & Business Messaging
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Base: Companies who take standards into account when developing new products or processes.
In % of firms. To be read …% of firms in the … sector who report that they take standards into account when developing new
products or process consider that standards for …(specify name of standards area) need to be improved significantly or
implemented widely in order to be able to realise the full success of e-business in that sector.
Responses are expressed in % of firms per enterprise size-band within sector, excluding Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 52
2.7 Open Source Systems
Responses to the three questions on the current level of adoption of open source
technologies, in the e-Business Survey (2005), indicate a strong uptake of Open Source
Systems. This is perhaps a good indicator for readiness to adopt, for instance, the free
ebXML code available via www.freebXML.org.
Exhibit 2-15: use of Open Source (in % of firms per enterprise size-band)
Database
0
10
20
30
40
50
60
70
80
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
N (Sector) =548, 540, 531,505, 551, 543, 159, 551, 554
Operating System
0
10
20
30
40
50
60
70
80
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
N (Sector) = 552, 549, 563, 514, 555, 546, 161, 555, 559
Browser
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
N (Sector) = 555, 542, 536, 515, 552, 544, 161, 547, 556
Base: All Companies, excluding Tourism sector.
Sample response (N) per sector varies per standards issue and is shown at the foot of each chart.
Responses are expressed in % of firms per enterprise size-band within sector excluding Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
53 September 2005
Micro and small enterprises are broadly similar in their implementations rates of open source
operating systems, databases and web browsers. This is not to say that they use such open
tools exclusively. However, it does indicate a relatively strong foothold for this technology.
Medium enterprises trail large enterprises, but only by a relatively narrow margin of around
10 percentage points for each of the three technologies.
2.8 Future via Web Services
The vision of web services is that application software will be developed or assembled from
components which are designed as re-usable services. This vision is in line with the search
for a different business model for software (pay-per-use, utility computing, application
hosting) that large software vendors are leading.
Exhibit 2-16: Future Importance of Web Services to Enterprises by size-band and by sector
0
10
20
30
40
50
60
70
80
90
100
Food Textile Publish Pharma Machine Auto Aero Constr Tourism ITServ
s1-micro s2-small s3-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr Tourism ITServ Total
s1-micro
21.8
(165)
27.4
(164)
37.3
(169)
38.6
(153)
28.9
(166)
25.7
(152)
31.3
(80)
25.0
(168)
41.3
(172)
58.2
(182)
34.0
(1571)
s2-small
33.8
(130)
34.1
(123)
47.8
(138)
40.0
(145)
36.2
(127)
32.0
(128)
47.5
(40)
33.1
(136)
39.7
(131)
69.6
(138)
41.2
(1236)
s3-medium
43.4
(152)
46.3
(147)
62.1
(161)
51.9
(129)
51.9
(160)
47.3
(148)
56.3
(16)
37.2
(156)
50.0
(158)
73.2
(168)
51.8
(1395)
s4-large
48.4
(62)
50.0
(52)
63.5
(52)
65.3
(49)
58.5
(53)
61.3
(62)
50.0
(12)
50.9
(55)
55.4
(56)
84.3
(51)
59.1
(504)
(N) = Sample size per enterprise size-band, per sector, excluding Don’t Knows (4706)
Base: All companies, excluding Don’t Knows. N=4706
To be read … % of firms in the … enterprise size-band within the … sector stated that they consider integration of IT
components by means of Web Services will be important for their company.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 54
Over three years ago in February 2002, at the 2
nd
Annual Diffuse Conference entitled “Will
web-services revolutionize e-commerce” a key objective was to provoke discussion on what
web-services would bring to interoperability in the widest context and how web services will
deliver on promises to transform businesses. At the same time web services were being
promoted and marketed by commercial companies as the “next leap” in software. At the
conference warning bells were sounded.
The presentation on ECIMF (E-Commerce Integration Meta-Framework), developed by a
sub-group of the CEN/ISSS WS on e-commerce, was particularly cautious. Their conclusion
was that use of web services would help to achieve interoperability, but mostly in the lower,
technical syntax levels. For true Plug & Play use, the other interoperability aspects such as
differences in business process specifications, differences in semantics and differences in
business contexts (economic aspects) were considered to be in-adequately addressed.
Today no one will deny that this technology is in its “disillusion phase”. After being hyped by
major vendors – a cycle not uncommon for new technologies – the next expected phase is a
more realistic one of modest but continuous growth.
The evidence from the e-Business W@tch data indicates the beginning of what appears to
be a concerted intention by SMEs to move to web services. Exhibit 2-19 reflects the upbeat,
but time indeterminate, responses received to the question on how important Web Services
will be to their e-business in the future. What is important though is that the intentions to
move to web services will likely be easier when EDI/XML solutions have already been widely
implemented. Thus it is believed that evidence of a concerted effort now to implement
EDI/XML, and specifically ebXML will in time ably assist in meeting the future goal of web
services.
e-Business Interoperability
55 September 2005
2.9 Proposal on a functional view of enterprise size-bands
In his presentation to the Modelling Workshop organised by eBIF, Huemer
50
proposed a
theoretical information model for the types of systems that it is believed are likely to be used
by companies in each of the enterprise size-bands. Exhibit 2-17 outlines the main ideas
behind the proposal: only large and medium companies would have in-house application
developers, and thus the only company types who would be significantly interested in EDI.
Small companies, it was postulated, would prefer to buy COTS (Commercial Off-the-Shelf
Software) for their B2B needs and micro companies would be content to use browser-based
systems. It was considered that this classification is feasible and the data was therefore
mined to see if the tentative conclusions were valid in practice.
Exhibit 2-17: Proposed B2B Functional Classification of Enterprise Size-bands
Size-Band B2B functionality commonly used by Enterprises within the size-band
Large
Enterprises
· run business applications
· develop software or customise software, i.e. control their interfaces
· more or less able to participate in B2B
Medium and
some Small
Enterprises
· run business applications
· buy (or rent, or free) off-the-shelf software
· need Off-the-Shelf Software with B2B Functionality
Micro and
some Small
Enterprises
· do NOT run business applications
· act similar to consumers, and are satisfied with “browser-based“ e-commerce
· micro- and some small enterprises need Commercial Off-The-Shelf Software (COTS) that
are a combination of ERP systems and B2B software for communication
In keeping with this scenario, three specific conditions are required to be simultaneously
satisfied:
· ERP vendors must implement common B2B scenarios in their products;
· business processes must be unambiguously defined, i.e. it is not sufficient to merely
have ambiguous business documents, even those that may work satisfactorily in
current manual processes;
· Business processes must be defined in their business context.
Analysis of the proposition
The following Exhibits 2-18, 2-19 and 2-20 present the compiled information on types of
systems used by type of enterprise. Based on the data in the tables, it is clear for instance
from Exhibits 2-18, 2-19 that while micro-enterprises have the lowest level of use of in-house
software, the difference between the enterprise size-bands overall is not that significant in
that or in the other IT solutions used for procurement/sourcing or in marketing/sales. Thus at
the current level of available data there is not sufficient evidence to support the proposition
that there is a clean cut between the choices for software approaches and products between
the different enterprise size-bands. Once there are readily available COTS products with
inbuilt standardised (for instance ebXML capabilities) it is likely that these will be in high
demand by all enterprise size-bands and assuming the marketing price is well set will be
particularly attractive for the micro and small enterprises.
50
Huemer, Christian (2005) and Brigit Hofreiter. Introduction to UN/CEFACT modelling methodology.
Presentation at eBIF Modelling Seminar, Brussels, 1 July 2005. (ftp.cenorn.be/public/ebif, last accessed
August 23, 2005)
e-Business Interoperability
September 2005 56
The main argument however on the relative adoption of specific IT solutions is confirmed by
Exhibit 2-8 Use of EDI and types of EDI used per enterprise-size band and in Exhibit 2-20
These clearly show that in general micro and small enterprises trail medium and large
enterprises in their adoption of EDI and specific IT solutions for marketing and sales
operations. There is clearly a large potential market and opportunity here that needs to be
addressed in order to achieve the increased industry competitiveness demanded in order to
meet the Lisbon Agenda.
Exhibit 2-18: IT Solutions used for sourcing or procurement
Packaged
s/w
In-House
s/w
Asps
Solutions
Suppliers’
Solutions
e-marketplaces,
trading networks
%firms N %firms N %firms N %firms N %firms N
s1-micro 69.9 146 51.7 147 33.1 145 36.6 142 26.9 145
s2-small 65.4 156 64.6 158 33.8 151 39.2 153 25.0 156
s3-medium 75.9 303 70.1 304 34.3 297 28.2 298 22.5 298
s4-large 70.3 155 71.8 156 34.9 152 39.2 148 29.5 149
Average 71.4 760 65.8 765 34.1 745 34.3 741 25.3 748
Base data: companies who support sourcing or procurement processes by specific IT solutions. The number of companies in
each enterprise size-band is shown under columns marked N. To be read as “of those firms supporting their sourcing or
procurement processes by specific IT solutions …% of the firms in enterprise size-band … use IT solutions of type …
COTS: Commercial off-the-shelf software; a standard software package, implemented in the company
IH S/W: In-house developed software; customised company-specific IT solutions
ASP: Software services provided by ASPs, i.e. Application Service Providers
SSS : Functionalities offered via sales solutions of suppliers
e-Mark : Functionalities offered on e-marketplaces or trading networks
Source: e-Business W@tch (e-Business Survey 2005)
Exhibit 2-19: IT Solutions used for marketing or sales processes
Packaged
s/w
In-House
s/w
ASPs
Suppliers’
Solutions
e-markets
%firms N %firms N %firms N %firms N %firms N
s1-micro 68.3 142 53.9 141 27.3 132 16.7 132 24.6 138
s2-small 73.6 182 61.8 186 35.7 182 17.7 175 21.1 180
s3-medium 67.9 318 69.9 322 28.7 317 19.0 311 18.2 314
s4-large 66.4 140 71.6 141 27.7 137 30.1 133 21.7 138
FirmAverage 69.1 782 65.4 790 29.9 768 20.2 751 20.6 770
Base data: companies who support marketing or sales processes by specific IT solutions. The number of companies in each
enterprise size-band is shown under columns marked N. To be read as “of those firms supporting their marketing or sales
processes by specific IT solutions …% of the firms in enterprise size-band … use IT solutions of type …
COTS: Commercial off-the-shelf software; a standard software package, implemented in the company
IH S/W: In-house developed software; customised company-specific IT solutions
ASP: Software services provided by ASPs, i.e. Application Service Providers
SSS : Functionalities offered via sales solutions of suppliers
e-Mark : Functionalities offered on e-marketplaces or trading networks
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
57 September 2005
Exhibit 2-20: Enterprises, by enterprise size-band, supporting marketing or sales processes by
specific IT Solutions
Companies currently supporting marketing or sales processes by specific IT Solutions
Food Textile Publish Pharma Machine Auto Aero Constr Tourism IT Serv AvgTotal
s1-micro 5.8 3.7 6.8 7.9 4.7 5.1 9.4 3.7 10.1 23.8 8.1
s2-small 7.0 9.8 17.9 17.8 8.4 8.2 5.0 3.5 18.1 37.9 14.0
s3-medium 17.0 12.4 29.1 26.2 20.6 19.9 25.0 11.0 23.5 40.6 22.2
s4-large 22.6 20.4 51.1 29.2 20.0 22.4 7.7 21.4 30.4 52.3 28.3
FirmAverage 11.3 9.6 20.3 17.5 11.9 12.3 10.1 7.6 18.2 34.9 15.7
Base data: companies who support marketing or sales processes by specific IT solutions. To be read as “of those firms
supporting their marketing or sales processes by specific IT solutions …% of the firms in enterprise size-band … use IT
solutions of type …
Source: e-Business W@tch (e-Business Survey 2005)
Summary conclusions for Chapter 2
Throughout Chapter 2, the enterprise size-band views show that take-up of
various standards by micro and small companies generally trails the
medium and large companies in terms of the percentage number of firms in
their respective size-bands that have implemented or replied in the affirmative
to the various issues.
The main observations drawn from the chapter are that an analysis of
interoperability and standards by enterprise size class within sector is possible
and has been achieved. In order to extract and infer useful business guidance
based on the analysis, a sector roadmap of interoperability framework
standards should be compiled by a representative multi-disciplinary team of
business experts. The individual sectoral roadmaps can then be mapped into a
comparative cross-sectoral roadmap of the standards in use / to be used;
While there is no exact figure on the appropriate target level that SMEs should
establish, for instance, for EDI/XML adoption it could be suggested that a target
equal to or higher than the best of class companies in that enterprise size-band
would be appropriate.
e-Business Interoperability
September 2005 58
3 National Interoperability Initiatives
The need for a sectoral as opposed to a firm level approach to interoperability is clearly
enunciated in the 1998 paper by Laopodis and others
51
. It states:
to modernize industry necessitates a prudent approach …to proceed promote
collaborative-approaches per sector and cross-sector in areas where critical
mass of interested stakeholders can be formed, and introduce interoperability
through standardized open solutions built on consensus and which can
therefore co-exist in a competitive environment.
The national interoperability initiatives described in the following two sections have adopted
this prescription. Each of the descriptions provides a clear example of good practice and val-
uable insights into how effective PPP (public private partnership) can be in these areas. Both
describe national e-business interoperability initiatives. The first is drawn from recent devel-
opments in Luxembourg, the second from equally recent and ongoing initiatives in Australia.
3.1 Case study on Construction (CRP Henri Tudor,
Luxembourg)
Construction projects are increasingly being managed in a virtual collaborative environment.
More so than ever before, there is an increasing business need, during the entire life cycle of
a construction project and its subsequent usage, for architects, engineers, construction and
other AEC (Architecture, Engineering, Construction) partners to share and mutually update
information on products and services. According to the multi-part CEN/ISSS European
eConstruction Framework
52
agreed in December 2003
the eConstruction future is essentially towards model based and object
oriented
53
project/company/market information management and sharing via
open standards (IAI-IFC, ISO-12006-3, bcXML, CEN/ISSS eConstruction)
over the web (Semantic Web, Web Services)
Current information on the level of ICT adoption and e-business activity in 2005 is contained
in the companion volumes in this series of e-Business W@tch reports. See in particular,
Electronic Business in the Construction Sector (2005 Special Report No. 08-I and No. II) for
specific conclusions, outlook and implications for the industry and policy.
CRTI-B is helping to achieve the high level of business interoperability needed between large
and small companies within the building sector in Luxembourg. Their specific approach is
described in the following case study. Although the objectives and content issues are
directed specifically at the AEC environment the networking and communications strategies
adopted are in many cases sector-independent. Many of the same critical factors arise in
considering the establishment of a network of SMEs and the mechanisms for creation and
consensus on an interoperability framework in other sectors. Accounting for some specifics
characteristic of the construction industry, the lessons presented have been generalised in
order to be directly useful to any national interoperability project addressing similar
approaches in other sectors.
51
Laopodis, V., Conte, A., and Eleftheriadou, I. (1998). A methodology for introducing interoperability in
industrial sectoral applications of electronic commerce
52
CEN/ISSS. CWA 14946: European eConstruction Framework (EeF) - Context and Scope for “eConstruction”.
(March 2004)
53
Covering data and functionality aspects in an integrated way.
e-Business Interoperability
59 September 2005
CASE STUDY: CRTI-B (CRP HENRI TUDOR, LUXEMBOURG)
Abstract
The study outlines the processes by which CRTI-B, a Department of the Public Research
Centre Henri Tudor, established and managed a formal national e-strategy via a
representative network of construction sector stakeholders. It outlines how this
voluntary network developed, adopted and integrated an agreed common national
interoperability framework for e-construction, Build-IT, into everyday successful usage.
The lessons for national and regional interoperability initiatives are identified and
summarised together with generic guidelines on how to implement similar platforms
which can contribute to specific added-value business practices. The generic
conclusions drawn from this experience are being applied to other sectors within
Luxembourg.
Case Characteristics
Full name of the company Centre de Recherche Public Henri Tudor
Location of the company Luxembourg
Year of foundation 1987
Company size (no. of employees) large (250+)
Turnover in last financial year € 19.5M
Primary customers SMEs
URLhttp://www.tudor.lu/
E-Business Focus
Quality and Business performance äää
Public support for e-Business äää
Co-operation for interoperability äää
Interoperability Standards ää
ä = some relevance / in implementation stage; ää = important / used in day-to-day business;
äää = very important / critical business function
Background
The Centre de Recherche Public Henri Tudor is the national research, development
and innovation centre responsible for ensuring increased experimentation, use and
adoption of the most promising ICT applications by private companies (mostly SMEs)
and public sectors in Luxembourg. The members (regulation authorities, national
federations of designers, industry, craftsmen, etc.) of the Luxembourg CRTI-B (Centre
de Ressources des Technologies de l’Information pour le Bâtiment) are dedicated to
enhancing national construction and building industry competitiveness.
The construction industry
The building trade is, on the one hand, a mature industry characterised by high
professional skills in architecture, design, construction, aesthetics and the relevant
legal aspects required for land contracts and development approvals. Very hetero-
geneous project teams have learned over time how to work to tight deadlines and
interlinked inter-dependent schedules in order to deliver projects to the specifications
required, on time and within budget. On the other hand, the growing market pressures
for more housing and institutional building programs, together with higher expectations
from customers and increasingly stringent necessary environmental constraints, has
ensured that it is no longer sufficient to adopt a “business as usual” approach.
e-Business Interoperability
September 2005 60
Nonetheless, despite a large usage of specific software (CAD, planning, monitoring),
there is a very low usage of cross-trade electronic exchanges (e-procurement or
collaboration platforms) within the construction industry – and not only in Luxembourg.
This picture is consistent with the results from the e-Business W@tch 2005 survey
which indicates that the construction industry has the lowest expressed critical
business need for interoperability within its own sector (6.5% of construction firms
using computers) and for interoperability with firms outside the sector (5.2% of
construction firms using computers). Pro-rata these figures also indicate that the
maturity of e-business in the construction industry may take longer to achieve than in
other sectors. In this respect the schedule for interoperability in the construction sector
adopted by CRTI-B for its Build-IT initiative, as shown in Exhibit 3-1 below, is realistic.
Exhibit 3-1: Build-IT Project Schedule
However, the primary reason for the schedule edging out to 2008 is that significant
change takes time to be socialised, i.e. accepted and widely implemented. Notwith-
standing specific requirements that exist and may emerge for modifications in applic-
able regulation (e.g. e-procurement, authentication) or in technology norms, the adopt-
ion of interoperable e-business in construction is significantly gated by sociological
factors.
The strategic objectives
The primary goal of Build-IT is to enhance the competitiveness and the quality of the
production process in the building trade by the usage of ICT. This goal is served by
targeted strategic initiatives as outlined in the following two sections. These initiatives
involved multi-competence teams organised in thematic workgroups.
e-Business activities
Several early initiatives established a high level of openness and cooperation. For
example, the first activities related to the production of national paper-based norms for
mutual contractual activities between stakeholders required little need for CRP Henri
Tudor intervention and only low levels of interaction among the stakeholders. By the
end of 2002, the CRP and all of the stakeholders had together defined and agreed an
ICT innovation strategy, which was an impressive achievement within that narrow time
frame. This section outlines each of the major steps through which this was accompl-
ished and the challenges that had to be addressed and overcome along the way:
e-Business Interoperability
61 September 2005
· The approach started by understanding the need to educate the designers,
constructors and craftsmen to enable them to benefit from recognising and
adopting the appropriate interoperability standard, and thereby, realise the
benefits generated from ICT opportunities;
· The first socialisation of construction professionals to ICT usage and
experimentation with an electronic interchange interoperability platform was
accomplished in 2001 with the assistance of the architects’ national
representative body. This generic platform (Forum Altavista) for improved e-
collaboration between professionals has since been customised and
commercialised for the construction sector by a start-up (www.forum-
network.com) located at the CRP start-up incubator (www.technoport.lu);
· An early decision was made to adopt a formal methodology (CASSIS:
www.cassis.lu), which enabled all to participate equally in defining the
e-construction IT strategy and particularly in the development of e-procurement
in public building projects;
· An internet portal (www.crtib.lu) was created and dedicated explicitly to the
sector which supplies professionals with information about standards (tendering
and procurement) and which also supports asynchronous electronic
collaboration within the working groups.
e-Construction Standards
In compliance with the e-strategy, the national Build-IT project was designed with a
major objective: to increase the use of e-business in the sector and at same time to
ensure international interoperability by adoption of a standardized digital plan (Industry
Foundation Classes (IFC) standard and Building Information Model Philosophy). This
initiative had the following intrinsic characteristics:
· The IFC created by the International Alliance for Interoperability (www.iai-
international.org) were adopted unanimously by all stakeholders;
· A series of information events with specialists and software editors informed all
concerned about the IFC standard;
· Some specific studies and R&D projects were also undertaken:
· A longitudinal study was conducted to identify and quantify the real needs;
· Co-ordination software was developed to meet the needs identified;
· A special project was used to initiate early positive movement within the
sector;
· Pilot projects were conducted in the chosen application area to validate and
demonstrate the benefits of ICT.
Results realised and lessons learned
In 2002, the Luxembourg building sector comprised some 400 enterprises employing
12,000 workers, and producing 7% of Luxemburg’s GDP
54
. The successful
management of the Build-IT processes has accelerated the sustained learning required
for adoption of IFC classes by these Luxembourg enterprises. See Exhibit 3-2 IFC
Interoperability Framework for a schematic overview of the linked capabilities which
serve the specific needs of each stakeholder.
54
http://www.eiro.eurofound.eu.int/2002/10/feature/lu0210102f.html, last accessed August 23, 2005.
e-Business Interoperability
September 2005 62
Exhibit 3-2: IFC Interoperability Framework
Proof of success for e-construction
The mobilisation and meetings have specific action oriented objectives and
demonstrable results. Influential stakeholders receive and share information and, in
turn, implement knowledge and innovation processes which improve the quality and
level of formalisation of the sectoral e-governance and business interoperability
strategies. Since the establishment of the first working groups in 1991, active
participation is consistent and of high quality. The range and scope of the initiatives
within the building sector has also increased:
· over 60 different stakeholders are active across 7 on-going working groups and
met no less than 23 times during 2004;
· 77 stakeholders received advanced information and training on IFC standards
in the first six months of 2005. This gives the respective stakeholders the
knowledge, confidence and power to experiment and learn by doing;
· Not all ICT innovation initiatives need direct facilitated intervention. At any given
time, CRTI-B initiatives are directly supporting e-business activities in about 10
public or private organisations.
Lessons learned
BuildIT is designed to meet, amongst others, the requirements of public building
projects and related administrative processes. As such it is explicitly based on
established sectoral standards and specifications. Nonetheless, at a generic level the
overall approach is applicable to practically any sector. All comprehensive projects of
that nature must be designed to emphasise and take fully into account the sociological
aspects of the interactions, and the change management structures which are needed
to support the individuals and their respective expert roles vis-à-vis the network
organisation and their own company goals.
· The change process begins with a mobilisation of competencies in which
partners in a given sector take an active part in establishing learning groups and
working projects. For this to be effective, a formal nationally defined e-strategy
agreed by all the sectoral stakeholder representatives is the first priority. As
observed by Jean-Pol Michel, Directeur CITI/CRP “an agreed formal e-strategy
is a major asset at the political and social levels. The public transparency of the
strategy allows each actor to position their own goals within the ‘consortium’
e-Business Interoperability
63 September 2005
ones. Without this transparent trust baseline, a technical framework alone would
be a poor asset”;
· Establishing and reinforcing trust and confidence between the involved
stakeholders, and a sense of partnership in a common cause, is a pre-requisite.
In-person discussion must be promoted by bringing, at least initially, all
stakeholders (where possible) around the same table. The respective roles
must be clear and the skills and needs they each bring to the table must be
mutually understood. Within a given sector, at minimum it is essential to have
as core participants a neutral research centre offering skill sets as follows:
- coordination, standard survey, ICT expertise, connections with other
research institutes in Europe, as well as all of the relevant professional
organisations;
· Change and knowledge processes for interoperability are as important as the
end-result. Change is a continuous process. Early experimentation and
implementations at all stages are required to establish momentum and technical
electronic interchange platforms for early adopters. These early adopters need
to be well supported as they are potential best sponsors for change. At every
level, but particularly at the assessment and architectural level, these early pilot
successes provide good challenges and establish a strong fellowship and
esprit-de-corps. They also demonstrate the feasibility of addressing more
strategic and longer term technical and business challenges.
· Sustaining long term activities, based on a clear strategy agreed between the
stakeholders active in the sector, is critical in order to be able to adjust and lead
the evolution of the sector. This should be managed in waves of change e.g. a
first strategy was defined at the creation of the CRTI-B in 1990, and a second e-
strategy was defined in 2002 in order to renew the ‘e-ambition’ of the CRTI-B
network.
· The working processes and national norms for contractual activities must be
open to continuous improvement. Ideally this delicate balance of maturation and
renewal will be ensured through formal working groups. This adaptability is an
important semantic-level asset of the framework, as otherwise the norms in
practice might ultimately constrain the interpretation of business activities and
business-related objects. It is also a good asset from the cultural point of view. It
will be easier to promote an interoperability framework where cooperation is
the common way of work and where terms and definitions are formally shared
between actors. A good maturity at the semantic level will benefit both the
technical level (derivation of technical requirements, adoption of technical
standards for ICT common tools) and the business level (cooperative change of
business practices)
· Any interoperability framework must be dynamic. Networked knowledge and
innovation management processes must also be systematically deployed in
order to improve the “e-knowledge and e-innovation of the sectoral
stakeholders”. This can be achieved by means of a business and technology
watch function, coupled with shared awareness events such as meetings,
demonstrations, training, pilot projects, and celebrations of success.
e-Business Interoperability
September 2005 64
Additional Generic Guidelines
Technical, semantic and business process aspects are important but a common
business focus coupled with strong political leadership and social network
management take precedence. Speaking on the goal of a standardised digital building
plan for e-construction, Jean-Pol Michel noted that:
“From our experience, technical issues do not mobilise the good actors,
neither does the question of interoperability. Only added-value business
opportunities ensure strong mobilisation. So even if interoperability is our goal,
the strategy has to focus on ICT applications that demonstrate clear
advantage. For example, in the tourism sector, we are addressing an
attractive and non-critical ICT application (geo-localised information system)
with expectations for a clear and direct return on the investments for all.
Consequently, each stakeholder is mobilized on this client oriented added-
value service. Resolution of the interoperability, semantic and technical issues
will come after.”
To emphasise the importance of this point Jean-Pol Michel continued:
“The ICT adoption and the related interoperability issue are mainly a change
issue on the business. We have to address this change management issue
rather than merely focus on the technical or semantic issues. For example, in
order to deploy the national electronic marketplace for the training offer in
Luxembourg, we do not only propose an interchange electronic standard but
we have first studied the changes required in the business processes in order
to publish the new electronic course database and have also proposed
dedicated tools with which to effectively address this business process
change”.
Given the construction industry structure in Luxembourg, it is clear that SMEs, as a
significant group of the primary stakeholders, are critical to the change management
processes. However, it is generally accepted that neither they nor their federations can
maintain sufficient internal staff or pay for external consultants to access the necessary
competences required for cross-sector collaboration on e-standards and inter-
operability. In this context, the neutral role of a public body (such as CRTI-B performed
in e-Construction sector) is essential for informed consensus and assured global
interoperability. At the simplest level, this role must be structured to ensure that
important issues are adequately discussed under a neutral chairman and with all
required information (where possible) immediately to hand so that the implications are
understood prior to decision by the partners.
In a technology-rich and changing environment the public body therefore requires
significant current multidisciplinary competences in the areas of change management,
business process modelling, technology developments and semantics in order to
manage and optimise the knowledge process. Only when this is the case can the
public body support the large variety of activities required to address the social, political
and cultural issues that can otherwise and inevitably block the path to sustained
successful change management and technology adoption.
Conclusion
The CRP Henri Tudor Innovation Platform (IPF) is applied in the building and other
sectors, such as healthcare, training, and ICT services. It has, thus, resulted in a
national Luxembourg counterpart to the European Technology Platform (ETP) which is
e-Business Interoperability
65 September 2005
applicable to e-business developments and realisation of associated interoperability in
–practically- any business sector.
For similar success elsewhere, such networked organisations should be based on:
· an agreed sector-specific national objective;
· a well managed action plan; and,
· an expert network mobilising multi-disciplinary competencies with
representatives from each of the major stakeholders (e.g. users, suppliers,
regulators, researchers, trainers).
Essential support infrastructure will include an appropriate portfolio of R&D, training,
conferences, workgroups, pilot experiments, and formal interoperability certification,
coupled with active measurement and tracking of specific impact indicators related to
the national goals.
References and acknowledgements
This case study was compiled by Henry J. F. Ryan, Lios Geal Consultants, on behalf of the e-
Business W@tch.
References:
· Interviews with Jean-Pol Michel, Directeur du Centre d’Innovation pour les
Technologies de l’Information (CITI), Centre de Recherche Public Henri Tudor, and
email inputs from Damien Hanser, CRP Henri Tudor (CITI), in July 2005.
· Desk research and various documents on Build-IT authored by Jean-Pol Michel, Michel
Brachmond, Damien Hanser, Anne Rousseau and others.
Key messages from Section 3.1
The CRP HenriTudor BuildIT initiative and sectoral support mechanism has
successfully increased SME awareness and compatible e-business
implementation, at a particular sectoral level.
The same approach is readily applicable to other sectors. Similar sector-led
initiatives in other member states in the same or different sectors, ideally led by
respected neutral organisations equivalent to CRP Henri Tudor, are
recommended as a positive way to accelerate the pre-competitive business and
technology agreements required for effective national and regional
implementation of existing and emerging sectoral e-business standards and
guidelines.
e-Business Interoperability
September 2005 66
3.2 The Story of BizDex (Standards Australia)
The BizDex Mission is to be a trusted and independent, not-for-profit, consortia of
government and recognized standards bodies, committed to B2B standards simplification,
partnering with private enterprise to deliver low cost, scaleable, B2B interoperability to all
Australian businesses
55
.
Bizdex is a public-private partnership initiative which has been successfully applied to e-
business in the wheat production sector. The BizDex repository of integration schema and
BizLink connector may be used by any community to reduce integration setup costs –
particularly for small businesses. The concepts are equally applicable to establishing
business links within and between different sectors and service areas including Energy,
Health, Banking, Automotive, Retail, Steel, Human Resources, Utilities, Agriculture.
Australia’s sectoral and market-led development of B2B e-business has been actively led
and supported by a national PPP (public private partnership) program established at the
initiative of the former National Office of the Information Economy (NOIE). As facilitator of the
technical and business collaboration required to increase e-business uptake, NOIE convened
an Interoperability Forum in April 2002. This brought together key business stakeholders to
assess the development of e-business and to identify ways to enhance existing government
and industry initiatives aimed at increasing the level of e-business interoperability. Over 70
organisations from the standards, vendor, service provider, industry and government end-
user communities attended. Following the forum, the NOIE partnered with Standards
Australia to create BizDex - a framework to enable SMEs and large enterprises to readily,
and at low cost, engage with trading partners through B2B.
The background to this innovative approach is described in a 2001 report
56
The main driver for e-commerce to reach its full potential will be companies
collaborating to develop whole-of-industry solutions and deliver shared benefits. To
achieve this, companies will need to share their understanding of business
information and workflow processes, and agree on how they can best automate their
interchanges for efficiency. This will then free business resources to concentrate
more on competitive issues such as product quality and price.
The 2001 report further noted that the overwhelming emphasis in most national e-commerce
strategies at that time was on assisting firms. Australia differed in that the support was
addressed to the sectors.
Through the Standards Australia governance process an implementation strategy was
quickly established. BizDex was successfully completed in November 2003, with a set of key
design documents describing how interoperability could be facilitated by a national
framework. The deliverables and many other excellent comprehensive reports are freely
available from www.bizdex.com.au.
The interoperability framework is an open technical and commercial infrastructure that is
operated by non-aligned trusted bodies, namely, government and standards organisations.
The framework is ebXML compliant and comprises:
· a governance structure for collaborative development of standards;
· a repository of standards, messages and components;
55
BizDex: a one page overview.http://www.bizdex.com.au/files/BizDex-One Page Overview.pdf, last
accessed 23 August 2005
56
Australian Government. Department of Communications, Information Technology and the Arts (2001). B2B
e-Commerce: capturing value online. (http://www.dcita.gov.au/ie/publications/2001/10/b2b_e-commerce, last
accessed August 23, 2005)
e-Business Interoperability
67 September 2005
· a registry of businesses and their B2B profiles;
· a repository of re-usable schema that permit organizations to comply with, and bind
to, BizLib processes.
· an open integration platform for small businesses that have no pre-existing
middleware;
· an open commercial framework to provide incentives to deployment.
The components significantly reduce the cost of B2B integration. As announced by
Standards Australia (October 2003):
A cornerstone of BizDex is its proposed ownership structure. In a nutshell Bizdex is a
piece of national infrastructure similar to the roads network. This means that Bizdex
requires a collaborative approach to both investment and management; a balance of
public funding and private investment, coupled with a balance between regulation and
free enterprise. Such an approach promotes a high level of interoperability and trust,
thereby helping Australian organizations to avoid an operating environment plagued
by standards proliferation, technical lock-in and high switching costs. It also provides
a commercial incentive for private enterprise to rapidly populate BizDex content,
thereby enabling all Australian organizations to share in the benefits offered by e-
business.
57
In December 2003, the BizDex results of the technical proof-of concept work were presented
to over 100 organisations in open industry consultation forums in Sydney and Melbourne.
This included a demonstration connecting the SAP financial management system used by
many large firms, to the Quickbooks accounting package used by many small businesses.
The objective of these consultation forums was to demonstrate the outcomes and gather
feedback from industry representatives. Opinions were taken on the potential for BizDex to
assist the take up of e-business in Australia, as well as an assessment of the likelihood of
organisations making use of BizDex should a production service be deployed. At that time
the Working group proposed that BizDex be established as a not-for-profit entity that
supported infrastructure based around a collection of open standards-based components
including:
· a library of public e-business standards;
· a registry of businesses and their technical interface requirements; and
· integration tools such as a connector from small business software applications to
corporate software applications.
A possible business model, involving a call for Australian industry funding, was developed.
The call for industry funding was made in the first half of 2004. This did not attract sufficient
support to enable immediate and full scale deployment. Nonetheless, progress continued to
be made. In late 2003, Standards Australia led a Consortium partnered with Red Wahoo, the
Australian Wheat Board (AWB), AWB Grainflow, Freight Australia (now Pacific National) and
Sun Microsystems to trial business process e-enablement of the wheat supply chain via an
ITOL grant. Standards Australia were thus able to pilot the BizDex framework in the wheat
industry with Red Wahoo as solution architects. The results of this work along with several
case studies, technical papers and reports from a February 2005 Workshop on the future of
Bizdex are published.
58
Standards Australia, as the owners of the BizDex name, continue to
formulate the future formation of the BizDex service.
57
Standards Australia. BizDex: a one page overview.http://www.bizdex.com.au/files/BizDex-
One%20Page%20Overview.pdf, last accessed 23 August 2005
58
see www.bizdex.com.au
e-Business Interoperability
September 2005 68
Since the completion of the initial funded BizDex project, Red Wahoo undertook to self-fund
the detailed design and implementation of the BizDex design specifications. In tandem, its
Monteverdi suite of products (seehttp://www.redwahoo.com/white_papers.html) was
created. Demonstrating that there are significant commonalities between private and public
use of e-business and interoperability requirements, in October 2004, Red Wahoo were
engaged by AGIMO (an Australian Federal Government department within the Federal
Department of Finance) to define detailed use cases for specification of GovDex – a service
designed to facilitate and enable low cost interoperability of G2G and G2B transactions
modelled on BizDex. They have since been retained to work with several government
agencies to pilot the identified use case.
Scenarios for the future of Bizdex
An open workshop to determine the way forward for BizDex was held on February 8, 2005 at
the Standards Australia offices, Sydney. The workshop was attended by approximately 30
representatives from a variety of end users, government bodies, standards bodies and
industry associations. Each participant was provided with information on the BizDex
Framework, recent case studies, and options available to those undertaking or wanting to
undertake e-business. The discussion paper
59
issued in advance of the forum outlines four
possible scenarios together with an assessment of the potential activities, likely cost/revenue
model, advantages, disadvantages and role for vendors for carrying BizDex forward.
In summary, the four options identified in the subsequent Workshop Report
60
are presented
in Exhibit 3-3.
The meeting included presentations on several case studies:
· Optimising the Wheat Supply Chain
· Steel Online
· LIXI – lending industry XML initiative (i.e. mortgage lending industry)
· Perspective of a company (Boral)
The first and last of these cases had been successfully conducted using BizDex.
While there was support for all options at the meeting, Option 4 was preferred by a narrow
margin. This approach is deemed high-risk and challenging to model short and medium term
demand and revenue. There was also support for a phased approach incorporating a staged
adoption of each option in turn.
59
Standards Australia. Discussion paper: BizDex and e-business standards development: working together to
create a way forward January 2005. (http://www.bizdex.com.au/download.html, last accessed August 23,
2005)
60
Standards Australia. End-user e-business & interoperability workshop, February 8, 2005. Workshop report.
(http://www.bizdex.com.au/files/Workshopreportv2.pdf, last accessed August 23, 2005)
e-Business Interoperability
69 September 2005
Exhibit 3-3: BizDex Future Option Scenarios
Option Aims, roles and key functionality for the option
1 Share Experience
Aim: To provide a focal point for organisations or industry groups that are looking to establish
standards, in the process of developing standards, or have deployed standards.
Potential activities:
· convene meetings of end-users developing standards to share experiences;
· publish information and case studies on standards development.
2 Define Methods and Processes
Aim: To provide end-users with advice on methods and processes that could be used to develop
standards in green-field scenarios or to re-develop existing standards.
Potential activities:
· convene meetings of end-users developing standards to share experiences;
· conduct consultation process to obtain endorsement from both end-users and vendors for a
defined “Australian standard” for e-business standards development;
· publish document detailing agreed methodology;
· act as a referral service for end-users to contact vendors who use the approved method.
3 Develop, manage and maintain standards
Aim: To assist end-users with advice on methods and processes to develop standards, manage the
standards throughout their lifecycle and provide advice on deployment options.
Potential activities:
· provide leading input to international standards forums to seek acceptance or inclusion into
international standards;
· share an understanding of the Australian and Asia-Pacific business context;
· understand the business drivers for change within a client industry;
· identify opportunities for electronic commerce cooperation and improvement;
· aid client partners to form consortium projects to advance these opportunities;
· aid uptake of technology and application usage;
· recommend architectural patterns and infrastructure to support e-business efficiency;
· provide a repository facility to manage the local context usage of the reference standards;
· provide certification services for subsequent standards usage;
· provide compliance checklists for deployment frameworks.
4 Develop, Maintain, Manage and Deploy Standards.
Aim: To assist end-users to develop standards and manage them throughout their lifecycle, as well as
to host a registry of business information and integration solutions.
Potential activities: As for option 3 with the following additions:
· a registry of businesses and their technical interface requirements;
· a marketplace for vendors to sell integration tools that make use of the standards held in the
repository to connect common business applications.
Source. Standards Australia. End user e-business & Interoperability Workshop report. February 8, 2005.
(www.bizdex.com/au, last accessed August 23, 2005)
e-Business Interoperability
September 2005 70
Summary of the BizDex national collaboration for SMEs
The Australian economy includes multiple industry-specific communities. Bizdex is a public-
private partnership initiative which has been successfully applied to e-business in the wheat
production sector. The BizDex repository of integration schema and BizLink connector may
be used by any community to reduce integration setup costs – particularly for small
businesses. The concepts are equally applicable to establishing business links within and
between different sectors and service areas including Energy, Health, Banking, Automotive,
Retail, Steel, Human Resources, Utilities, Agriculture.
Bizdex is not about picking standards for industry. Instead, through its collaborative approach
to e-business it provides the technical infrastructure, methodology and governance which
industry can then use to manage change and variation between standards in common
usage. Managing standards is not the core interest of most businesses. Managing standards
is beyond the means of most SMEs, and can act as an inhibitor to large scale deployment
and take-up of e-business initiatives in and across supply chains. Bizdex helps SMEs and
industry generally to widely deploy their chosen B2B solutions, by reducing the cost of
compliance with the standards used in their trading communities.
Key messages from Section 3.2
The BizDex work is an example of a successful PPP (public private
partnership) model where the standards body takes on a much greater role and
responsibility for the costs, standards and integration tools developed. In effect
it becomes part of a wider business partnership and assumes risks in taking this
approach.
This experience should be studied at first hand and the possible applicability of
similar initiatives being introduced in Europe investigated. This could be
introduced, for example, as a special topic within a workshop conducted by the
e-Business Interoperability Forum (eBIF), or by DG Enterprise and Industry, and
the attitudes of the different stakeholders elicited in a neutral climate.
Clearly a change of this magnitude would not be undertaken lightly. The
important issue at first would be to fully understand the BizDex model and how
it might or might not suit the European SME circumstances and needs such as,
for example, the multi-cultural and multi-lingual environment.
It is recommended that a more extensive description of the BizDex experiences
covering both achievements and challenges is compiled, and made available
within Europe, and that any meeting in Europe to discuss the approach await
until after the BizDex future plans are known.
e-Business Interoperability
71 September 2005
4 Policy Considerations and Recommendations for
Action
The eEurope follow-up initiative "i2010" outlines three policy priorities:
· to create an open and competitive single market of information;
· to increase EU investment in ICT research by 80%
61
;
· to promote an inclusive information society.
B2B interoperability via standards is particularly set to help deliver on the first objective. The
key to this is knowing how best to bring SMEs into the digital B2B fold without causing
unnecessary expense or loss of management time to small and micro companies in
particular.
Exhibit 4-1: Recommendations for Policy Action
Policy Objective Suggestion for policy Potential Initiator(s)
Increase awareness and support mechanisms,
at sectoral level, with emphasis on SMEs:
· encourage sector led initiatives, ideally led
by respected neutral organisations, similar to
that conducted by CRP Henri Tudor as a
way to accelerate the pre-competitive
business and technology agreements
required for effective national and regional
implementation of existing and emerging
sectoral e-business standards and guide-
lines;
· ICT Innovation Centres
· Sector Industry Associations
· National Standards Bodies
· Member state business
development agencies
· proposed new High Level
ebXML Implementation Group
· encourage and assist CEN/ISSS eBIF and
EBES to jointly compile and distribute
information on successful implementations
of ebXML and Web Services by SMEs;
· ICT Innovation Centres
· EU and national RTD
projects
Sector level
interoperability
· facilitate SME access (preferably free) to all
strategic eBIF information documents.
· DG Enterprise and Industry
· CEN/ISSS eBIF and EBES
members
Cross-sector
interoperability
Review the enterprise size-band data presented
by sector and topic in the interoperability report
in a cross-sectoral workshop and establish a
process to:
· assist typical SME enterprise size-band
representatives establish and share
appropriate targets and standards road-
maps for interoperable e-trade with their
business partners;
· Establish formal BPI (Business Process
Integration) mechanisms (e.g. piloting,
training and model sharing) to encourage
and assist SMEs in integrating business
processes into their B2B implementations;
· Look for cross-sector commonalities.
Where relevant actively promote European
common cross-sector interoperability
· SME Associations
· Sector Industry Associations
· DG Enterprise & Industry
· CEN/ISSS eBIF and EBES
members
61
NB. This proposal, if approved, would apply to the Community funding.
e-Business Interoperability
September 2005 72
standards and convergence;
· Improve European inputs to the global e-
business standards convergence
ISO/IEC/ITU/CEFACT Business Standards
Convergence framework, and in the global
context, also collaborate with NIST eBSC
Forum convergence activities
Standards Policy Investigate the potential for developing a Bizdex
like approach to some forthcoming European or
national standardisation and e-business imple-
mentation projects.
· National Standards
Organisations
· ICT vendors
· DG Enterprise and industry
4.1 Sector level interoperability
As stated by David White,
62
Director, European Commission, Enterprise & Industry
Directorate General, in September 2005,
The realisation of i2010 goals will very much depend on “platforms, services and
applications being able to talk to one another and to build an economic activity on the
information received” This is what we understand as “Interoperability”. It is complex,
not limited to the infrastructure level but encompasses semantic interoperability,
organisational interoperability and even regulatory interoperability.
Competitiveness of SMEs
The report SMEs in Europe 2003
63
reveals that there were 19.3 million enterprises, in the
European Economic Area and Switzerland, providing employment for 140 million people.
More than 99% of these enterprises were SMEs; 92% with less than 10 employees; and,
about half of all enterprises (those providing employment and income to the self-employed
and family workers only) having no employees at all
64
. More than two thirds of all jobs were in
SMEs, with almost one third of all jobs provided by large enterprises. Medium term
developments (1998-2003) show that, despite fluctuations over time, employment increased
in SMEs (and in particular in micro and small enterprises), whereas in large enterprises
employment decreased.
As stated in the same report, this is remarkable as real turnover and value added growth
have been smaller in SMEs than in large enterprises. So, large enterprises increased their
production more and sold more products and services than SMEs. In effect large enterprises
have become more efficient, more quickly than SMEs. In practice this may have been
influenced by a combination of downsizing and retrenchment rather than solely through
business efficiencies. Thus detailed study of the data in the survey analysis requires sector
experts who can distinguish the causative factors. In the case of the cross-sector results
62
White, David. Interoperability and standards
(http://portal.etsi.org/docbox/workshop/sos_interoperability/SOS2/SOS2_14%20David_White_Interoperability_
and_Standards.doc, last accessed 29 Sep 2003)
63
SMEs in Europe 2003 (Observatory of European SMEs 2003, No. 7)
(http://europa.eu.int/comm/enterprise/enterprise_policy/analysis/doc/smes_observatory_2003_report7_en.pdf,
last accessed 29 Sep 2003)
64
Highlights from the 2003 Observatory (Observatory of European SMEs 2003, Number 8)
(http://europa.eu.int/comm/enterprise/enterprise_policy/analysis/doc/smes_observatory_2003_report8_en.pdf,
last accessed August 23, 2005)
e-Business Interoperability
73 September 2005
presented here this means that input is required from business industry experts from the
relevant sectors.
Increase SME awareness of the business and support move to B2B
Evidence from the Luxembourgish and Australian initiatives outlined in previous chapter
shows that specific targeted actions at sectoral level to facilitate e-trading partnerships by
increasing awareness and support for faster SME take up and implementation of flexible
standard based approaches to B2B is recommended, required and can be effective. Broad
policy initiatives are suggested based on the following observations drawn from the survey
results and other information published on SME efficiencies relative to large firms:
· the awareness and adoption data from the enterprise size-band analysis per sector
from e-Business W@tch indicates an almost linear relationship between B2B related
activities and enterprise size;
· micro, small and medium enterprises trail one another and seriously lag behind large
companies in the adoption rates for B2B related technologies; and,
· the lower efficiency of SMEs relative to large firms noted in the report “SMEs in
Europe 2003”.
Involve the stakeholders
When implementing interoperable systems, standards alone are insufficient. Steps must be
taken to accelerate the efficiency and hence competitiveness of SMEs by increasing
awareness and support for SMEs in relation to adopting EDI/XML based solutions (ebXML
and Web services).
As shown by the CRTI-B Case Study it is essential to involve the various stakeholders in a
structure which, although relying on existing standards, focuses on the primary
interoperability needs, and proceeds on a time controlled cycle to develop and implement
functioning systems. If this is done properly then standards can trigger innovation directly by
codifying accumulated technological experience and by forming a baseline from which new
technologies emerge. Standards can also act as a catalyst for innovation indirectly because
they increase global competitiveness, which in turn spurs innovation.
General Observations
The growth observed in use of EDI and other standards between the e-Business 2003 and
2005 studies is heartening. However, there is a difference between adopting specific
standards and making those standards part of everyday business for all occasions. The
following activities could be considered to enhance the actual use of e-standards in business
transactions:
· Subject to interest and support from industry and national agencies, the Commission
could establish, in conjunction with the European Standards Organisations and
relevant other bodies such as Chambers of Commerce, and User/SME Associations
and organisations, a new high level ebXML implementation group to advise on
ebXML introduction, implementation and application in all sectors across Europe. The
charter of this group would be to develop a systematic support plan to accelerate the
sporadic implementations and identify/overcome barriers to progress. It is envisaged
that the High Level Group will select at least one sector, with significant information
exchange and trading links to other sectors, and use that as the nucleus for priming
the roll-outs.
· The proceeding and presentations delivered at all eBIF meetings could be freely
accessible to all. The rationale for this suggestion is that eBIF is by its charter not a
e-Business Interoperability
September 2005 74
standards making body. It operates as a forum and information repository for those
companies, especially SMEs that are interested in establishing interoperable
business connections with partners in Europe. In addition a category of free
corresponding member could be added to the current membership lists which will
entitle those who sign up to free electronic copies of all documentation. Such
corresponding members could also be entitled to participate in and encouraged to
contribute papers, case studies and information about interoperability
implementations, developments and conferences.
· Where relevant, subsets of information tailored to particular SME group interests
or general information related to standards convergence or cross-sector studies
should be compiled and individually targeted to specific companies and sector
associations in accordance with dissemination profiles.
4.2 Cross-sector interoperability
Europe should follow more closely, and contribute where relevant to policy and business
requirements, to the e-business technology framework and standards convergence
underway in the ISO/IEC/ITU/CEFACT MoU Management Framework Group. In addition,
within the longer term global considerations, partnership collaboration is also recommended
with the standards’ matrix and convergence themes of the NIST eBSC Forum.
CEN/ISSS already has commitment to provide input to such globally focused activities, as
evidenced for instance by the eBES and eBIF goals. However, stakeholder participation and
external awareness/profile of relevant activities in these two groups are relatively low. For
example, interest from national standards bodies is very limited – indeed EDI standardisation
and delegations to the UN/CEFACT process has usually been the responsibility of national
organisations other than the national standards bodies. In addition, in terms of their
investments and active standards participation European arms of multi-national ICT vendor
companies, and many European research projects, generally favour direct influencing of
international standards and global consortia. Consequently European standards framework
activities, so essential for effective interoperability which depends heavily on the system
architectures adopted, are generally seriously under-resourced. It is critical that Europe
overcome these barriers and contribute to facilitating the e-business technology framework
and standards convergence necessary for global e-business outreach.
Business Process Standards
A common feature of all of the newer approaches to interoperability is the need for a
systematic approach to understanding and modelling the business processes. Thus, at this
time business managers should where possible be focusing on the requirements and
standard methodologies that will support business process description and modelling.
e-Business Interoperability
75 September 2005
4.3 Standards policy
Ideally, strategic investment decisions enable long term stability and growth potential. At the
same time it is vital to have an inbuilt flexibility. In fact according to Mintzberg
65
strategies
need not be deliberate; they can also emerge:
strategies can form, as well as being formulated. A realised strategy can emerge in
response to an evolving situation, or it can be brought about deliberately, through a
process of formulation followed by implementation. But when these planned
intentions do not produce the required actions, organisations are left with unrealized
strategies.
This is the approach that appears to have been adopted in formulating the i2010 Action Plan.
The broad outlines have been proposed and agreed. The way to achieve the plan, tailor
some of the edges and keep a strong focus on benefits for SMEs is now open to debate. The
essence of debate – if it is not to degenerate into a futile discussion on semantics – is that
there must be evidence on which to make specific choices. This evidence may be a hunch, a
rough back of the envelope calculation, or it may be something stronger and more scientific.
The evidence from e-Business W@tch presented in this report and elsewhere should be
used to inform the planning for SMEs in responding to a changing world of technology and
electronic business relationships.
Realizing, in particular with reference to successful Public Private Partnership work, that
there are options available within EDI/XML solutions (ebXML, Web Services) to this end
consideration should be given within the national standards bodies, European standards
organisations and the European Commission to specific public private partnerships similar to
the BizDex initiative in Australia.
In deciding what is to be accomplished technologically, the policy criteria must be "the good
of man, of society and of business”. In planning for the use of technology, both decision
makers and policy planners sometimes seem to operate on other grounds. Often appearing
to decide based on either or both of two other principles: a) "what is technically possible to
do, ought to be done" – whereby feasibility is elevated into a normative concept; and b)
"maximal efficiency and productivity" - even if this entails minimal individuality, creativeness,
and the elimination of differences.
Certainly it is possible to wait and see what new standards emerge in the areas of web
services, ontologies, grids and the rest of the semantic web. It is possible to wait for better
and more complicated standards, which will for instance eventually enable automated agent-
based trading between applications. However in determining the standards’ winner in
network markets, expectations are crucial and can easily be self-fulfilling: the product or
technology expected to prevail does prevail
66
.
Visibly choosing or supporting a business interoperability framework now can make a
world of difference in the adoption rate. The issue is not what is the best standard; it is not
always the best standard that wins out. The ideal outcome is that the winning technology
used to assist inter-enterprise business trading, increases flexibility and competitiveness and
can be easily adopted and applied by all industries, regardless of size and location.
65
Mintzberg, Henry (1987). Crafting strategy. Harvard Business Review, July-August 1987, pp 66-75.
66
Shapiro, Carl (1999) and Hal R. Varian. Information rules: a strategic guide to the network economy. Harvard
Business School Press. ISBN 0-87584-863-X. Page 211
e-Business Interoperability
September 2005 76
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Annex I: The e-Business Survey 2005 –
Methodology Report
The e-Business W@tch collects data on the use of ICT and e-business in European enterprises by
means of representative surveys. The e-Business Survey 2005, which was the third survey after those
of 2002 and 2003, had a scope of 5,218 telephone interviews with decision-makers in enterprises from
seven EU countries (Czech Republic, France, Germany, Italy, Poland, Spain and the UK).
67
Interviews
were carried out in January and February 2005, using computer-aided telephone interview (CATI)
technology.
Questionnaire
The general design of the questionnaire builds on the ones used in the previous surveys of 2002 and
2003 in order to ensure a basic continuity of the research approach. However, new modules on
security and interoperability have been added, while other modules have been reduced (mostly the
ones on perceived impacts of e-business, where little new evidence was to be expected compared to
the findings of 2003).
New questions were also introduced in the e-commerce related modules, reflecting the developments
in electronic business and changing perspectives in research, in particular the emphasis on electronic
business processes. An important focus of the 2005 survey was on the use of ICT systems to support
e-procurement and online sales processes. These questions complement the previously used
questions on online purchasing and selling activity.
The questionnaires of all three surveys (2002, 2003, 2005) can be downloaded from the e-Business
W@tch website at www.ebusiness-watch.org/about/methodology.htm.
Population
In contrast to the surveys of 2002 and 2003, the 2005 survey considered only companies that used
computers. Thus, the highest level of the population was the set of all computer-using enterprises
which were active within the national territory of one of the 7 countries covered, and which had their
primary business activity in one of the 10 sectors specified on the basis of NACE Rev. 1.1 categories.
Evidence from previous surveys shows that this does not make a noticeable difference for medium-
sized and large firms, as the share of firms that use computers can be expected to be 99% or more in
all sectors and countries covered. Differences are relevant, however, for micro and small enterprises,
in particular in the food and beverages industry, the textile industry, construction and tourism. In these
four sectors, 10-30% of micro enterprises and 4-15% of small firms (depending on the country and
sector) do not use a computer.
68
Therefore it makes a difference if a figure represents a percentage of
"all companies" (as in 2003) or a percentage of "companies using computers" (as in 2005).
Differences are much less pronounced, though, when figures have been weighted by employment.
The 10 sectors that have been selected for the 2005 survey are extremely heterogeneous in terms of
their size. Construction is by far the largest with about 2.3 million enterprises in the EU-25. At the other
end of the range are the aerospace and pharmaceutical industries with only about 2,200 and 3,900
firms respectively in the EU-25. This is a factor of about 100 between the largest and smallest sector.
This imbalance has clearly implications for the achievement of survey quota and the impact of
weighting on sector data and on aggregate results.
67
These seven countries are frequently referred to as the "EU-7" in this report. They account for roughly 75% of
the EU-25 population and GDP.
68
Non-computer users include typically small craft firms (textile, construction), bars, restaurants or pensions (in
tourism), and small food producing companies.
e-Business Interoperability
81 September 2005
Table 1: Population coverage of the e-Business Survey (2005)
NACE Rev. 1.1
No.
Section Division / Group
Sector name (as used by e-Business W@tch)
01 DA 15 Manufacture of food products and beverages
02 DB 17, 18 Manufacture of textiles (17), wearing apparel; dressing & dyeing of fur (18)
03 DE 22 Publishing, printing and reproduction of recorded media
04 DG 24.4, 24.5 Manufacture of pharmaceuticals (24.4), soap and detergents, cleaning and
polishing preparations, perfumes and toilet preparations (24.5)
05 DK 29.1 – 29.5 Manufacture of machinery and equipment (not included: Manufacture of
weapons and ammunition, domestic appliances)
06 DM 34 Manufacture of motor vehicles, trailers and semi-trailers
07 DM 35.3 Manufacture of aircraft and spacecraft
08 F 45 Construction
09 H, I, O 55, 62.1, 63.3,
92.3+5
Tourism, including hotels and restaurants (55), parts of air transport (62), travel
agencies and tour operators (63.3), and parts of recreational, cultural and
sporting activities (92)
10 K 72 Computer and related activities
Sampling frame and method
No cut-off was made in terms of minimum size of firms. The sample drawn was a random sample of
companies from the respective sector population in each of the seven countries, with the objective of
fulfilling minimum strata with respect to company size class per country-sector cell. Strata were to
include a 10% share of large companies (250+ employees), 30% of medium sized enterprises (50-249
employees), 25% of small enterprises (10-49 employees) and up to 35% of micro enterprises with less
than 10 employees. Samples were drawn locally by fieldwork organisations based on widely
recognized business directories and databases (see Table 2).
Table 2: Directories from which samples were drawn (2005)
Country Directory / database
CZ Czech Republic Albertina Business Database (database of economic subjects with >1m entries)
DE Germany Heins und Partner Business Pool
ES Spain Dun & Bradstreet
FR France SIREN file from INSEE (the French National Statistics Institute)
IT Italy Dun & Bradstreet
PL Poland Kompass Polska
UK United Kingdom Dun & Bradstreet
The survey was carried out as an enterprise survey: data collection and reporting focus on the
enterprise, defined as a business organisation (legal unit) with one or more establishments. In some of
the sectors, target quota in the larger enterprise size-bands could not be accomplished in each of the
countries. In these cases, interviews were shifted to the next largest size-band (from large to medium-
sized, from medium-sized to small).
Fieldwork
Fieldwork was coordinated by the German branch of Ipsos GmbH (www.ipsos.de) and conducted in
cooperation with its local partner organisations (see Table 3) on behalf of e-Business W@tch. Pilot
interviews prior to the regular fieldwork were conducted with 12 companies in Germany in December
2004, in order to test the questionnaire (structure, comprehensibility of questions). The survey had a
scope of 5,218 interviews, evenly spread across the seven countries covered. About 565 interviews
per sector were conducted (see Table 4), except for the aeronautics and the pharmaceutical industry.
Due to the small population of firms in these sectors, it was not possible to achieve the target quota. In
the aerospace industry, only 163 company interviews could be realised in the seven countries
covered. In this sector, practically the entire population of companies was contacted.
e-Business Interoperability
September 2005 82
Table 3: Market research companies having conducted the fieldwork in the e-Business Survey 2005
Country Fieldwork organisation
CZ Czech Republic Ipsos Czech Republic, Skolska 32/694, 110 00 Praha 1
DE Germany Ipsos GmbH, Papenkamp 2-6, 23879 Mölln
ES Spain Ipsos ECO Consulting, Avda. de Burgos, 12.-8
a
, 28036 Madrid
FR France Ipsos Insight Marketing, 99, rue de l'Abbé Groult, 75739 Paris Cedex 15
IT Italy Demoskopea S.p.A., Via Salaria 290/ Via Rubicone 41, 00199 Rome
PL Poland Ipsos, ul. Pulawska 39, 02-508 Warsaw
UK United Kingdom Continental Research, 132-140 Goswell Road, EC1V 7DY London
Table 4: Number of interviews conducted by sector and country (2005)
Sector CZ DE ES FR IT PL UK TOTAL
Food and beverages 85 80 82 80 86 83 75 571
Textiles and clothing 85 76 81 80 81 83 75 561
Publishing and printing 84 80 82 80 79 83 75 563
Pharmaceutical industry 54 83 81 76 81 82 75 532
Machinery and equipment 85 80 81 77 84 83 75 565
Automotive industry 85 80 81 80 81 83 75 565
Aerospace industry 20 38 15 39 23 3 25 163
Construction 84 81 83 80 80 83 75 566
Tourism 84 80 82 80 82 83 76 567
Computer related services 84 80 82 78 82 84 75 565
TOTAL 750 758 750 750 759 750 701 5218
Table 5: Interview contact protocol: completion rates and non-response reasons (2005)
CZ DE ES FR IT PL UK Total
1 Sample (gross) 2632 7247 8796 10123 5082 7825 13104 54809
1.1 Telephone number does not exist 126 880 680 373 340 959 870 4228
1.2 Not a company (e.g. private household) 42 130 220 200 44 214 115 965
1.3 Fax machine / modem 40 56 10 0 359 248 116 829
1.4 Quota completed > address not used 191 361 3357 1623 351 1161 3856 10900
1.5 No target person in company 57 344 186 98 72 109 691 1557
1.6 Language problems 2 16 14 14 1 0 0 47
1.7 No answer on no. of employees 10 8 3 1 0 0 8 30
1.8 Company does not use computers 11 80 194 332 41 30 567 1255
Sum 1.1 – 1.8 479 1875 4664 2641 1208 2721 6223 19811
2 Sample (net) 2153 5372 4132 7482 3874 5104 6881 34998
2.1 Nobody picks up phone 212 366 335 892 1080 1333 6 4224
2.2 Line busy, engaged 60 52 6 68 60 438 0 684
2.3 Answering machine 42 133 20 1208 79 137 463 2082
2.4 Contact person refuses (refusal at
reception, switchboard)
472 931 2010 2024 755 1613 1695 9500
2.5 Target person refuses 388 2125 184 693 142 122 2591 6245
2.6 No appointment during fieldwork period 42 13 395 202 0 261 298 1211
2.7 Open appointment 77 935 363 1584 968 371 1008 5306
2.8 Target person is ill / not available 10 3 47 0 2 0 0 62
2.9 Interview abandoned 91 56 22 57 28 79 119 452
2.10 Interview error, cannot be used 9 0 0 4 1 0 0 14
Sum 2.1 – 2.10 1403 4614 3382 6732 3115 4354 6180 29780
3 Successful interviews 750 758 750 750 759 750 701 5218
Completion rate (= [3] / [2]) 34.8% 14.1% 18.2% 10.0% 19.6% 14.7% 10.2% 14.9%
Average interview time (min : sec) 17:07 19:06 17:29 17:15 20:51 21:15 19:53 19:00
e-Business Interoperability
83 September 2005
Non response: In a voluntary telephone survey, in order to achieve the targeted interview totals, it is
always necessary to contact more companies than just the number equal to the target. In addition to
refusals, or eligible respondents being unavailable, any sample contains a proportion of "wrong"
businesses (e.g., from another sector), and wrong and/or unobtainable telephone numbers. Table 5
shows the completion rate by country (completed interviews as percentage of contacts made) and
reasons for non-completion of interviews. Higher refusal rates in some countries, sectors or size bands
(especially among large businesses) inevitably raises questions about a possible refusal bias. That is,
the possibility that respondents differ in their characteristics from those that refuse to participate.
However, this effect cannot be avoided in any voluntary survey (be it telephone- or paper-based).
Feedback on the fieldwork
No major problems were reported from the fieldwork with respect to interviewing (comprehensibility of
the questionnaire, logical structure). The overall feedback from the survey organisations was that
fieldwork ran smoothly and that the questionnaire was well understood by most respondents. The
main challenge was the fulfilment of the quotas, which was difficult or impossible in some of the
sectors, in particular among the larger size-bands. Specific remarks from fieldwork organisations,
however, point at some differences in the local situation (see Table 6).
Table 6: Comments by national fieldwork companies on their experience (2005)
Country Comments
CZ Czech
Republic
· It was more difficult to complete interviews with very small companies. They were less
willing to participate in an interview.
· Respondents often felt that questions about a firm's profit or turnover are not adequate.
The interviewers mentioned that these questions were several times a cause of
abandoning the interview.
DE Germany · In total fieldwork ran smoothly and the questionnaire was easy to understand and
interesting for most of respondents.
· Answering the question about turnover as well as the investment on ICT was often
problematic for the respondents and yielded a high proportion of non-replies.
· Respondents of small companies often had difficulty in answering questions related to
specific technical terms and application. In cases where they used only one or few
computers, some questions (e.g. regarding networks) were not relevant for them.
· Positive resonance comes from the respondents when they know that the survey is
being done on behalf of the European Commission. The reference to the website at the
end of the interview was welcome and helpful.
ES Spain · Interviews in very small companies were more difficult to complete due to the lack of
knowledge about ICT. On the other hand, the participation of respondents in big
companies was difficult to achieve.
· Generally the questionnaire was easy to understand.
· About a quarter of the firms contacted have subcontracted most of their ICT tasks,
which made it difficult for the respondents to answer specific technical questions.
· Questions regarding the turnover and investments were difficult to answer for the
respondents and yielded a high proportion of don’t know responses. This is also often
experienced in other B2B surveys.
FR France · Small companies often do not have much ICT equipment. Respondents therefore
sometimes had difficulty in answering some of the questions, since the questionnaire
was not adapted to these companies. Small companies often answered “don’t know” to
more detailed questions.
· Respondents from larger companies had difficulty answering questions concerning
turnover, benefits and other financial issues. These questions would be better put to
somebody from the financial department.
· As more and more companies outsource their IT department, it is difficult to identify a
responsible person within the company to answer the questions.
e-Business Interoperability
September 2005 84
IT Italy · The questionnaire was considered long, but quite easy to answer.
· However, a few sections (mainly D and E) were considered more complicated than
others. In particular technical terms that referred to security and to online services were
difficult to understand.
· Interviews were carried out without any problems in medium-sized enterprises where it
is easier to identify and contact an IT manager. Those respondents had the best grasp of
what was being talked about in the interview.
· The financial questions were difficult to answer for most of the respondents, especially
the question on ICT investments.
PL Poland · Respondents from small companies often had difficulties in answering questions related
to specific technical applications.
· Companies are quite reluctant to provide financial information, so respondents often
answer DK to the financial questions.
· In many companies, IT people are not allowed to say anything about internal matters of
the company.
· Many companies outsource their IT department and its activities.
UK United
Kingdom
· As with previous surveys carried out in the context of the e-Business W@tch
programme, fieldwork ran relatively smoothly.
· However, the anticipated strike-rate was severely affected by the substantial length of
the interview (20 minutes).
· Gathering turnover and investment details again yielded a high proportion of don’t know
responses.
· As a final point, it is becoming increasingly difficult to secure interviews with IT/DP
professionals, and we suspect that this situation will only worsen in the future.
Weighting schemes
Due to stratified sampling, the sample size in each size-band is not proportional to the population
numbers. If proportional allocation had been used, the sample sizes in the 250+ size-band would have
been extremely small, not allowing any reasonable presentation of results. Thus, weighting is required
so that results adequately reflect the structure and distribution of enterprises in the population of the
respective sector or geographic area. e-Business W@tch applies two different weighting schemes:
weighting by employment and by the number of enterprises.
69
· Weighting by employment: Values that are reported as employment-weighted figures should
be read as "enterprises comprising x% of employees" (in the respective sector or country).
The reason for using employment weighting is that there are many more micro-enterprises
than any other firms. If the weights did not take into account the economic importance of
businesses of different sizes in some way, the results would be dominated by the percentages
observed in the micro size-band.
· Weighting by the number of enterprises: Values that are reported as "x% of enterprises" show
the share of firms irrespective of their size, i.e. a micro-company with a few employees and a
large company with thousands of employees both count equally.
The use of filter questions in interviews
In the interviews, not all questions were asked to all companies. The use of filter questions is a
common method in standardised questionnaire surveys to make the interview more efficient. For
example, questions on the type of Internet access used were only asked to those companies that had
replied to have Internet access. Thus, the question whether a company has Internet access or not
serves as a filter for follow-up questions.
69
In the tables of this report, data are normally presented in both ways, except for data by size-bands. These are
shown in % of firms within a size-band, where employment-weighting is implicit.
e-Business Interoperability
85 September 2005
The results for filtered questions can be computed on the base of only those enterprises that were
actually asked the question (e.g. "in % of enterprises with Internet access"), but can also be computed
on the base of "all companies". In this report, both methods are used, depending on the indicator. The
base (as specified in footnotes of tables and charts) is therefore not necessarily identical to the set of
companies that were actually asked the underlying question.
Statistical accuracy of the survey: confidence intervals
Statistics vary in their accuracy, depending on the kind of data and sources. A "confidence interval" is
a measure that helps to assess the accuracy that can be expected from data. The confidence interval
is the estimated range of values on a certain level of significance. Confidence intervals for estimates of
a population fraction (percentages) depend on the sample size, the probability of error, and the survey
result (value of the percentage) itself. Further to this, variance of the weighting factors has negative
effects on confidence intervals.
Table 7 gives some indication about the level of accuracy that can be expected for industry totals
(EU7 totals based on all respondents) depending on the weighting scheme applied. For totals of all-
sectors, an accuracy of +/- 2 percentage points can be expected for most values that are expressed
as "% of firms", and of +/- 3 percentage points for values that are weighted by employment. The
confidence interval for industry totals (EU-7) is about +/- 5 percentage points (in both weighting
schemes). Employment-weighted results for the pharmaceutical, the automotive and the aeronautics
industry have higher confidence intervals, because these sectors are more sensitive to weights due to
their structure (i.e. the dominance of large firms in a comparatively small population). In the
aeronautics industry, employment-weighted figures should not be used.
The calculation of confidence intervals is based on the assumption of (quasi-) infinite population
universes. In practice, however, in some industries and in some countries the complete population of
businesses consists of only several hundred or even a few dozen of enterprises. In some cases,
literally each and every enterprise within a country-industry and size-band cell was contacted and
asked to participate in the survey. This means that it is practically impossible to achieve a higher
confidence interval through representative enterprise surveys in which participation is not obligatory.
This should be borne in mind when comparing the confidence intervals of e-Business W@tch surveys
to those commonly found in general population surveys.
e-Business Interoperability
September 2005 86
Table 7: Confidence intervals for all-sector and sector totals (EU-7)
Confidence interval
Survey
result
Weighted by
employment
Weighted as
"% of firms"
Unweighted
All sectors (aggregate), EU-7 10% 8.1% - 12.2% 8.7% - 11.5% 9.3% - 10.7%
Food and beverages 10% 7.2% - 13.8% 6.9% - 14.3% 8.1% - 12.3%
Textile industries 10% 7.4% - 13.3% 6.9% - 14.3% 8.1% - 12.3%
Publishing and printing 10% 7.2% - 13.7% 7.2% - 13.8% 8.1% - 12.3%
Manufacture of pharmaceuticals 10% 5.3% - 18.0% 7.5% - 13.1% 8.1% - 12.4%
Manufacture of machinery and equipment 10% 6.5% - 15.1% 7.1% - 13.9% 8.1% - 12.3%
Automotive industry 10% 4.6% - 20.2% 7.7% - 12.8% 8.1% - 12.3%
Aerospace industry 10% 1.7% - 41.3% 5.7% - 16.9% 6.8% - 14.6%
Construction 10% 7.7% - 12.8% 7.0% - 14.1% 8.1% - 12.3%
Tourism 10% 7.2% - 13.8% 6.9% - 14.3% 8.1% - 12.3%
IT services 10% 7.3% - 13.6% 6.5% - 15.2% 8.1% - 12.3%
All sectors (aggregate), EU-7 30% 27.0% - 33.2% 27.9% - 32.2% 29.0% - 31.1%
Food and beverages 30% 25.2% - 35.2% 24.7% - 35.9% 26.9% - 33.3%
Textile industries 30% 25.7% - 34.6% 24.7% - 35.8% 26.9% - 33.3%
Publishing and printing 30% 25.3% - 35.1% 25.3% - 35.2% 26.9% - 33.3%
Manufacture of pharmaceuticals 30% 21.5% - 40.2% 25.9% - 34.4% 26.8% - 33.4%
Manufacture of machinery and equipment 30% 23.9% - 36.9% 25.1% - 35.4% 26.9% - 33.3%
Automotive industry 30% 19.9% - 42.6% 26.3% - 34.0% 26.9% - 33.3%
Aerospace industry 30% 10.5% - 61.0% 22.3% - 39.0% 24.4% - 36.2%
Construction 30% 26.3% - 34.0% 24.9% - 35.7% 26.9% - 33.3%
Tourism 30% 25.2% - 35.2% 24.7% - 35.9% 26.9% - 33.3%
IT services 30% 25.5% - 35.0% 23.9% - 36.9% 26.9% - 33.3%
All sectors (aggregate), EU-7 50% 46.6% - 53.4% 47.7% - 52.3% 48.9% - 51.1%
Food and beverages 50% 44.6% - 55.4% 43.9% - 56.1% 46.6% - 53.4%
Textile industries 50% 45.2% - 54.8% 44.0% - 56.0% 46.5% - 53.5%
Publishing and printing 50% 44.7% - 55.3% 44.6% - 55.4% 46.5% - 53.5%
Manufacture of pharmaceuticals 50% 39.8% - 60.2% 45.4% - 54.6% 46.4% - 53.6%
Manufacture of machinery and equipment 50% 42.9% - 57.1% 44.4% - 55.6% 46.5% - 53.5%
Automotive industry 50% 37.7% - 62.3% 45.8% - 54.2% 46.5% - 53.5%
Aerospace industry 50% 23.2% - 76.8% 40.9% - 59.1% 43.6% - 56.4%
Construction 50% 45.8% - 54.2% 44.1% - 55.9% 46.5% - 53.5%
Tourism 50% 44.5% - 55.5% 43.9% - 56.1% 46.5% - 53.5%
IT services 50% 44.8% - 55.2% 42.9% - 57.1% 46.5% - 53.5%
All sectors (aggregate), EU-7 70% 66.8% - 73.0% 67.8% - 72.1% 68.9% - 71.0%
Food and beverages 70% 64.8% - 74.8% 64.1% - 75.3% 66.7% - 73.1%
Textile industries 70% 65.4% - 74.3% 64.2% - 75.3% 66.7% - 73.1%
Publishing and printing 70% 64.9% - 74.7% 64.8% - 74.7% 66.7% - 73.1%
Manufacture of pharmaceuticals 70% 59.8% - 78.5% 65.6% - 74.1% 66.6% - 73.2%
Manufacture of machinery and equipment 70% 63.1% - 76.1% 64.6% - 74.9% 66.7% - 73.1%
Automotive industry 70% 57.4% - 80.1% 66.0% - 73.7% 66.7% - 73.1%
Aerospace industry 70% 39.0% - 89.5% 61.0% - 77.7% 63.8% - 75.6%
Construction 70% 66.0% - 73.7% 64.3% - 75.1% 66.7% - 73.1%
Tourism 70% 64.8% - 74.8% 64.1% - 75.3% 66.7% - 73.1%
IT services 70% 65.0% - 74.5% 63.1% - 76.1% 66.7% - 73.1%
All sectors (aggregate), EU-7 90% 87.8% - 91.9% 88.5% - 91.3% 89.3% - 90.7%
Food and beverages 90% 86.2% - 92.8% 85.7% - 93.1% 87.7% - 91.9%
Textile industries 90% 86.7% - 92.6% 85.7% - 93.1% 87.7% - 91.9%
Publishing and printing 90% 86.3% - 92.8% 86.2% - 92.8% 87.7% - 91.9%
Manufacture of pharmaceuticals 90% 82.0% - 94.7% 86.9% - 92.5% 87.6% - 91.9%
Manufacture of machinery and equipment 90% 84.9% - 93.5% 86.1% - 92.9% 87.7% - 91.9%
Automotive industry 90% 79.8% - 95.4% 87.2% - 92.3% 87.7% - 91.9%
Aerospace industry 90% 58.7% - 98.3% 83.1% - 94.3% 85.4% - 93.2%
Construction 90% 87.2% - 92.3% 85.9% - 93.0% 87.7% - 91.9%
Tourism 90% 86.2% - 92.8% 85.7% - 93.1% 87.7% - 91.9%
IT services 90% 86.4% - 92.7% 84.8% - 93.5% 87.7% - 91.9%
confidence intervals at =.90
e-Business Interoperability
87 September 2005
Annex II: The e-Business Scoreboard 2005
Introduction
The e-Business Scoreboard approach was developed by the e-Business W@tch in 2004. It is an
instrument to compare and visualize the intensity of e-business activity across different sectors,
countries or size-bands, in different areas of business activity. Conceptually, the Scoreboard owes to
the Balanced Scorecard (BSC) approach, which suggests that an organisation should be viewed from
four perspectives, and that metrics (and targets) are to be defined for each perspective. Similarly, the
e-Business Scoreboard looks at ICT use by enterprises from four (inter-related) perspectives.
Component indicators represent the metrics for these perspectives.
The Scoreboard is composed of comp-
onent indicators which are taken from the
e-Business Survey 2005 by the e-
Business W@tch. These indicators can be
aggregated on two levels:
· 16 component indicators are, in a
first step, aggregated into four sub-
indices that represent major applic-
ation areas of e-business. The
diamond charts on the following pages
show these four dimensions of e-
business activity.
· The four sub-indices can then be
aggregated into the (overall) e-
Business Index.
Structure of the e-Business Scoreboard
E-Business
Index
A. Basic ICT
infrastructure
4 sub-Indices
(by business function)
E-Business
Index
B. Internal
processes
C. Supply-side
activity
D. Customer-
facing activity
16 component
indicators
A.1 Internet
A.2 LAN
A.3 VPN
A.4 Remote
B.1 Intranet
etc.
E-Business
Index
A. Basic ICT
infrastructure
4 sub-Indices
(by business function)
E-Business
Index
B. Internal
processes
C. Supply-side
activity
D. Customer-
facing activity
16 component
indicators
A.1 Internet
A.2 LAN
A.3 VPN
A.4 Remote
B.1 Intranet
etc.
The E-Business Scoreboard takes into account the percentages (diffusion rates) from all sectors and
show how a specific sector differs from the all-sector-average. An index value is based on mean
values and standard deviations.
70
Thus, index values express the multiple of the standard deviation (1
or (-1)) for a specific sector and the selected indicator. 0 equals the mean value for all sectors.
Indexes simplify multi-dimensional concepts. To correctly assess the validity and shortcomings of the
Scoreboard and its e-Business Index, the following notes are important to be taken into account:
· Weighting: Results are influenced by the selection of the underlying weighting scheme. In the
computation presented in this chapter, employment-weighted figures were used. This
emphasizes e-business activity in large firms and has an impact on the Index for sectors with
dominant large players (for instance the automotive and pharmaceutical industry).
· Component indicators: The selection of component indicators may have a bias towards
manufacturing activities, as some indicators in dimension B ("internal process") are more
relevant for manufacturing than for service sectors (e.g. ERP). The full list of component
indicators and their definition is given in Annex II.
· Relative comparison: The e-Business Index and the Scoreboards do not represent absolute
measures of e-business activity. The Scoreboard results depend on the respective set of
sectors (or countries etc.) that are compared to each other, as figures are derived from
computing standard deviations from the average of the respective set.
70
Constituting values are z-values, i.e. z = (x - mean(x))/stddev(x). This procedure results in a distribution with
mean(z)=0 and stddev(z)=1.
e-Business Interoperability
September 2005 88
Component indicators of the Scoreboard 2005
A. ICT infrastructure and basic connectivity
A.1 Enterprises connecting
computers with a LAN
= the percentage of employees from a sector working in enterprises that
have connected computers with a Local Area Network (LAN).
A.2 Internet connectivity = the percentage of employees working in enterprises that are
connected to the internet, with a supplementary indicator for the type
of internet connection in terms of bandwidth. The percentage of
employees working in enterprises that are connected with a bandwidth
of less than 2 Mbit/s is computed with a factor of 0.5, enterprises
connected with at least 2 Mbit/s bandwidth with a factor of 1.0. The
maximum value of 100 would be returned if all employees from a
sector work in enterprises connected to the internet with more than 2
Mbit/s bandwidth.
A.3 Remote access to the
company network
= the percentage of employees from a sector working in enterprises
where it is possible to access data from the company's computer
system from a remote location.
A.4 Enterprises with a VPN = the percentage of employees from a sector working in enterprises that
use a Virtual Private Network (VPN)
B. Internal business process automation
B.1 Use of an intranet = the percentage of employees working in enterprises that use an
intranet.
B.2 Use of online technology to
track working hours and/or
production time
= the percentage of employees working in enterprises that use online
technologies (other than e-mail) to track working hours and/or
production times
B.3 Use of EDM systems = the percentage of employees working in enterprises that use an
Enterprise Document Management system
B.4 Use of ERP systems = the percentage of employees working in enterprises that have
implemented an ERP (enterprise resource planning) system
C. Procurement and supply chain integration
C.1 Enterprises purchasing at
least 5% of their supplies online
= the percentage of employees working in enterprises saying that they
purchase at least 5% of their supplies online via the internet or other
computer-mediated networks (for example via EDI based connections
to their suppliers)
C.2 Use of specific IT solutions for
e-procurement
= the percentage of employees working in enterprises that use specific
IT solutions to support the selection of their suppliers and/or
procurement processes
C.3 Use of SCM systems = the percentage of employees working in enterprises that use an SCM
(supply chain management) system
C.4 Online management of
capacity and inventory
= the percentage of employees working in enterprises that that use
technologies to manage capacity and inventory online
D. Marketing and sales processes
D.1 Enterprises maintaining a web-
site with a CMS
= the percentage of employees working in enterprises that have a
website and use a content management system to maintain and
update the website
D.2 Use of CRM software systems = the percentage of employees working in enterprises that use a CRM
(customer relationship management) software to organise data about
their customers electronically
D.3 Enterprises selling at least 5%
of their goods & services online
= the percentage of employees working in enterprises saying that online
sales via the internet or other online networks (for example via an
extranet) constitute at least 5% of their total sales volume
D.4 Use of specific IT solutions for
marketing and sales processes
= the percentage of employees working in enterprises that uses specific
IT solutions to support marketing and sales processes
e-Business Interoperability
89 September 2005
Results: sectors in comparison
The e-Business Scoreboards visualize that the nature and impact of electronic business differs widely
between sectors, particularly between manufacturing and service sectors. There are several
underlying reasons; for example, the nature of e-business activities depends on whether the focus is
on B2B or B2C.
Manufacturing
· Among the 7 manufacturing sectors surveyed, electronic business activity has reached the
highest level of intensity in the automotive, pharmaceutical and aeronautics industries. The
rapid development in these sectors is mostly driven by the large international companies.
Supply-chain integration and the streamlining of procurement processes are common
objectives in these industries for which e-business solutions are attractive. In the machinery
and equipment industry, electronic business activity has not yet reached the same level of
intensity. At first sight, this confirms the findings of the Survey 2003. However, developments
in this sector have been quite dynamic since then. For example, e-business is increasingly
recognized as a useful means of providing customer service.
· The publishing and printing industry has a different e-business profile, as major segments of
this sector operate in B2C markets. ICT has a considerable impact on production and internal
work processes. Furthermore, customer-facing activities (online publishing, marketing,
advertising) are critical. On the other hand, processes with a high e-business potential such as
inventory and supply-chain-management are less critical in this sector.
· The food and beverages sector, and the textile and clothing industry, are late adopters of
ICT compared to the other manufacturing sectors studied. However, in the food and
beverages industry, there are signs of increasing e-business activity, mainly in response to
structural changes and new requirements. Important issues that promote e-business are food
safety and the digital integration of the value chain. RFID (Radio Frequency Identification)
based technologies could play an important role in these areas.
Construction
· ICT adoption and e-business activity in construction companies appears to be very limited
compared to most manufacturing sectors. The structure of the industry, which includes many
small craft companies, cannot fully explain this gap. An industry with a multitude of standards,
technical specifications, labels, and certification marks is not an optimal forum for drawing
benefits from electronic business. However, e-business tools have the potential to benefit
complex construction projects where there is a need to coordinate a large number of sub-
contractors.
Service sectors
· The computer related services sector is a special case with regard to e-business. Although
companies in this sector have Information Technology and e-business as their end product,
ICT also plays a significant role in the way that this product is produced, promoted and
provided. This specific way of using ICT distinguishes the IT services industry from the other
sectors analysed by the e-Business W@tch. Here, in this sector the use of ICT and the
production of related services are difficult to separate from each other.
· The IT services sector shares a common feature with tourism: in both industries, online
channels have become key tools for marketing, communication and interaction with
customers. In tourism, online booking and reservation services have been widely accepted
among consumers and business travellers, and "e-tourism" has truly taken off. However, the
great importance of ICT in this sector is not properly reflected in the e-Business Index. The
main reason is that e-business normally does not have the same significance in supply-side
activities and internal work processes (for example in hotels), as in manufacturing sectors.
e-Business Interoperability
September 2005 90
e-Business Scoreboards for 10 sectors (2005)
Food and beverages
-1,7
0,0
1,7
A
B
C
D
Max Average Food
Textile and clothing industry
-1,7
0,0
1,7
A
B
C
D
Max Average Textile
Publishing and printing
-1,7
0,0
1,7
A
B
C
D
Max Average Publishing
Pharmaceutical industry
-1,7
0,0
1,7
A
B
C
D
Max Average Pharma
Machinery and equipment
-1,7
0,0
1,7
A
B
C
D
Max Average Machinery
Automotive industry
-1,7
0,0
1,7
A
B
C
D
Max Average Automotive
e-Business Interoperability
91 September 2005
Aeronautics
-1,7
0,0
1,7
A
B
C
D
Max Average Aeronautics
Construction
-1,7
0,0
1,7
A
B
C
D
Max Average Construction
Tourism
-1,7
0,0
1,7
A
B
C
D
Max Average Tourism
IT services
-1,7
0,0
1,7
A
B
C
D
Max Average IT services
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 92
e-Business Index for 10 sectors (2005)
(Compound Index of 16 component indicators)
Benchmark based on firm-weighted data
1)
(indexed values: highest score = 100)
100
71
67
58
53
48
45
39
31
29
0 20 40 60 80 100
IT services
Aeronautics
Pharma
Automotive
Tourism
Machinery
Publishing
Textile
Construction
Food
Benchmark based on employment-weighted data
2)
(indexed values: highest score = 100)
100
98
95
87
72
69
58
54
54
36
0 20 40 60 80 100
IT services
Automotive
Pharma
Aeronautics
Machinery
Publishing
Food
Textile
Tourism
Construction
1) Firm-weighted data express e-business adoption as "% of firms in a sector with a certain activity", irrespective of the size
of the companies (i.e. small companies and large ones count equally). Results are mainly determined by the situation in
small firms, as there are many more small companies than large ones in the population of enterprises.
2) Employment-weighted data express e-business adoption as "activity in firms comprising …% of employment in a sector",
thus emphasising the situation in larger companies.
doc_987338818.pdf
The European Commission’s e-Business W@tch monitors the adoption, development and impact of electronic business practices in different sectors of the economy in the enlarged European Union.
The European e-Business Market Watch
European
Commission
Enterprise & Industry Directorate General
The European e-Business Market Watch
Special Report (September 2005)
e-Business Interoperability and Standards
A Cross-Sector Perspective and Outlook
Special Report (September 2005)
e-Business Interoperability and Standards
A Cross-Sector Perspective and Outlook
e-Business Interoperability
September 2005 2
The e-Business W@tch
The European Commission, Enterprise & Industry Directorate General, launched the e-Business W@tch to
monitor the growing maturity of electronic business across different sectors of the economy in the enlarged
European Union, EEA and Accession countries. Since January 2002 the e-Business W@tch has analysed e-
business developments and impacts in manufacturing, financial and service sectors. Results are continuously
being published on the Internet and can be accessed or ordered via the Europa server or directly at the
e-Business W@tch website (www.europa.eu.int/comm/enterprise/ict/policy/watch/index.htm or www.ebusiness-
watch.org).
This report is a Special Issue Study on e-Business Interoperability and Standards. It provides a cross-sector
perspective on e-business interoperability requirements and standards in the context of relevant public business
policy issues. The synthesis is based on the e-Business W@tch survey, specific business case examples and
desk research. The report is intended, in particular, for SME business managers and public policy strategists.
Disclaimer
Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use
which might be made of the following information. The views expressed in this report are those of the authors and
do not necessarily reflect those of the European Commission. Nothing in this report implies or expresses a
warranty of any kind. Results from this report should only be used as guidelines as part of an overall strategy. For
detailed advice on corporate planning, business processes and management, technology integration and legal or
tax issues, the services of a professional should be obtained.
Acknowledgements
This report was prepared by Lios Geal Consultants on behalf of the European Commission, Enterprise & Industry
Directorate General. It is a deliverable in the context of the e-Business W@tch, which is implemented by a team
consisting of empirica GmbH (co-ordinating partner), Berlecon Research, Databank Consulting, DIW Berlin, Lios
Geal Consultants, RAMBØLL Management and Salzburg Research, based on a service contract with the
European Commission.
e-Business W@tch would like to thank Ms Francoise Bousquet, ZFIB Conseil, for reviewing the draft report and
providing valuable comments and suggestions. Ms Bousquet is a member of the e-Business W@tch Industry
Advisory Board in 2005.
Contact
For further information about this Sector Study or about the e-Business W@tch, please contact:
Lios Geal Consultants Ltd
School Road
Castlegar
Galway
Ireland
Fax: (353-91)-773968
[email protected]
e-Business W@tch
c/o empirica GmbH
Oxfordstr. 2
D-53111 Bonn
Germany
Fax: (49-228) 98530-12
[email protected]
European Commission
Enterprise & Industry Directorate-
General
Technology for Innovation / ICT
Industries and e-Business
Fax: (32-2) 2967019
[email protected]
Rights Restrictions
Material from this report can be freely used and reproduced but not commercially resold and, if quoted, the exact
source must be clearly acknowledged.
Galway / Brussels, September 2005
e-Business Interoperability
3 September 2005
Table of Contents
Introduction to the e-Business W@tch............................................................. 4
Executive Summary.......................................................................................... 7
e-Business Interoperability & Standards: ..................................................... 10
1 Introduction............................................................................................. 10
1.1 Study structure.............................................................................................. 10
1.2 Review of related e-Business W@tch findings ........................................... 11
1.3 Objectives and scope of this study ............................................................. 13
1.4 Definition of key terms.................................................................................. 14
1.5 The B2B cross-sector approach .................................................................. 18
1.6 Architecture background.............................................................................. 20
1.7 European interoperability initiatives............................................................ 30
1.8 Other interoperability initiatives................................................................... 33
2 Survey results on Standards & Interoperability.................................... 35
2.1 The research questions................................................................................ 36
2.2 The e-Business Survey 2005........................................................................ 36
2.3 Do standards matter in innovation? ............................................................ 38
2.4 Current usage of EDI and plans for XML standards................................... 42
2.5 Comparative data between e-Business Surveys 2003 and 2005................ 46
2.6 Perceived standards development/implementation gaps .......................... 49
2.7 Open Source Systems .................................................................................. 52
2.8 Future via Web Services............................................................................... 53
2.9 Proposal on a functional view of enterprise size-bands ............................ 55
3 National Interoperability Initiatives ...................................................... 58
3.1 Case study on Construction (CRP Henri Tudor, Luxembourg).................. 58
Case Study: CRTI-B (CRP Henri Tudor, Luxembourg) ........................................ 59
3.2 The Story of BizDex (Standards Australia).................................................. 66
4 Policy Considerations and Recommendations for Action.................... 71
4.1 Sector level interoperability ......................................................................... 72
4.2 Cross-sector interoperability ....................................................................... 74
4.3 Standards policy ........................................................................................... 75
References...................................................................................................... 76
Annex I: The e-Business Survey 2005 – Methodology Report..................... 80
Annex II: The e-Business Scoreboard 2005.................................................. 87
e-Business Interoperability
September 2005 4
Introduction to the e-Business W@tch
e-Business W@tch – observatory and intermediary since late 2001
The European Commission’s e-Business W@tch monitors the adoption, development and impact of
electronic business practices in different sectors of the economy in the enlarged European Union. The
background of this initiative was the eEurope 2002 Action Plan, which provided the basis for targeted
actions to stimulate the use of the Internet for accelerating e-commerce, acknowledging that
"electronic commerce is already developing dynamically in inter-business trading" and that "it is
important for SMEs not to be left behind in this process." The eEurope 2005 Action Plan confirmed
and built further upon these objectives with Action 3.1.2 "A dynamic e-business environment", which
defined the goal "to promote take-up of e-business with the aim of increasing the competitiveness of
European enterprises and raising productivity and growth through investment in information and
communication technologies, human resources (notably e-skills) and new business models".
It is against this background that the European Commission, Enterprise Directorate General, launched
the e-Business W@tch in late 2001. The objective of this initiative is to provide sectoral analysis based
on empirical research, including representative enterprise surveys in countries of the European Union,
the EEA and Accession States, with special emphasis on the implications for small and medium-sized
enterprises (SMEs).
Since its launch, the e-Business W@tch has published more than 60 e-Business Sector Studies on 17
different sectors of the European economy, three comprehensive synthesis reports about the status of
electronic business in the European Union, three statistical pocketbooks and various other resources
(newsletters, special issue reports, etc). These are all available on the website at www.ebusiness-
watch.org (‘resources’).
The quantitative analysis about the diffusion of ICT and e-business is based to a large extent on
regular representative surveys among decision-makers in European enterprises. The e-Business
Survey 2005 covers more than 5000 enterprises from 10 different sectors across 7 EU member states.
In addition, more than 70 case studies on e-business activity in enterprises from all EU, EEA and
Accession countries are carried out, to complement the statistical picture by a more detailed analysis
of current e-business practices.
Survey results of the previous years have confirmed the initial assumption and rationale of the e-
Business W@tch that the sector in which a firm operates and the size of a company, rather than its
location, are the main determinants of its e-business activity. The large demand for the various
publications and statistics provided by the e-Business W@tch, and their exploitation by other research
institutions (for example, in the EITO Yearbook 2003 and in the OECD Information Technology
Outlook 2004), document the demand for sectoral e-business analysis. Facilitated by positive
responses and the growing interest in its analysis, the e-Business W@tch is increasingly developing
from an observatory into a think-tank and intermediary, stimulating the debate about the economic and
policy implications of e-business among stakeholders at an international level.
The wide-angle perspective: e-Business W@tch provides the "big picture" as a
basis for further research
The mission of the e-Business W@tch is to present a "wide-angle" perspective on e-business
developments and practices in the sectors covered. This has important implications regarding the level
of detail in which various issues can be explored, both in terms of the quantitative picture (survey) and
in terms of the qualitative assessment and background research.
Over the past 10 years, "electronic business" has increased from a very specific to a very broad topic
to be studied. The OECD proposes a definition of e-business as "automated business processes (both
intra-and inter-firm) over computer mediated networks". This definition is useful as it makes clear that
e-Business Interoperability
5 September 2005
e-business is more than e-commerce (which focuses on commercial transactions between companies
and their customers, be it consumers or other companies) and that e-business includes internal
processes within the company as well as processes between companies. Furthermore, the OECD
definition implicitly indicates that the focus and main objective of electronic business is to be found in
business process automation and integration, and the impacts thereof.
This implies that the potential scope for e-business analyses has also broadened. The measurement
of e-commerce transactions (the volume of goods and services traded online) can and should be
complemented by studies analysing the degree to which business processes, including intra-firm
processes, are electronically linked to each other and have become digitally integrated. Hence, it
becomes practically impossible to cover in depth all areas and facets of e-business in one study.
Thus, study scope needs to be carefully defined.
The e-Business W@tch Sector Studies apply a wide-angle perspective and zoom into selected
aspects of electronic business only. In general, studies with a wide-angle approach allow for a wider
range of issues to be covered and investigated at the same time. This, however, necessarily limits the
level of detail in which each single issue is explored. This must be considered when using the Sector
Studies prepared by the e-Business W@tch.
The role of economic analysis in the Sector Reports
In addition to the analysis of e-business developments, the e-Business W@tch Sector Studies also
provide some background information on the respective sector. Following the configuration of the
sector (on the basis of NACE Rev. 1.1 classification) at the introduction of each study, this overview
includes some basic industry statistics, as well as information about the latest trends and challenges
concerning the specific sector. Readers should not mistake this background information, however, as
the main topic of analysis. An e-Business W@tch "sector report" is not a piece of economic research
on the sector itself, but a study focusing on the use of ICT and e-business in that particular sector.
The introduction to the sector is neither intended to be, nor could it be a substitute for more detailed
and specific industrial analysis.
The data presented in each sector’s overview are mainly derived from official statistics prepared by
Eurostat, but are processed and refined by DIW Berlin. The purpose is to close the many gaps that
occur in the official statistics, with missing data being imputed on the basis of extrapolations and own
calculations.
The mission of the e-Business W@tch is to monitor, analyse and compare the
development of e-business in different sectors of the European economy – not the
sectors themselves.
Its objective is to provide reliable results, based on commonly accepted methodologies,
which are not readily available from other sources and would trigger the interest of policy-
makers, researchers, and other e-business stakeholders for more in depth analyses (or
statistical surveys).
The e-Business W@tch has adopted a “wide-angle” perspective in its approach and the
necessary trade-offs are transparently depicted in all its deliverables.
The definition of sectors and the adequate level of aggregation
Economic sectors constitute the main level of analysis for e-Business W@tch. In 2005, the sample
consists of ten sectors. Their configuration and definition are based on the NACE Rev. 1.1
classification of business activities.
The rather broad aggregation of different business activities into sectors in 2002-2004 made it
possible to cover a broad spectrum of the economy, but also caused some challenges for the analysis
of e-business developments. For instance, it was hardly possible to focus on individual sub-sectors in
much detail within a single sector report. The selection and definition of sectors proposed for 2005
e-Business Interoperability
September 2005 6
reflect these concerns. Six out of the ten sectors proposed are sub-sectors that were part of
(aggregated) sectors analysed in 2002-2004. The rationale for "zooming in" on former sub-sectors is
that the broad picture for the whole sector is now available from previous sector studies, and that this
seems to be the right time within the prospective life-cycle of the e-Business W@tch to focus the
analysis on more specific business activities.
The 10 sectors covered in 2005 were selected on the basis of the following considerations:
· The current dynamics of electronic business in the sector and the impact of ICT and electronic
business, as derived from earlier e-Business W@tch sector studies.
· Interest articulated by the industry in previous years on studies of this type.
· Policy relevance of the sector from the perspective of DG Enterprise & Industry.
· Roll-out strategy of 2003: New sectors (not covered in 2002/03 and/or 2003/04) have been
added, as well as specific industries which have only been covered as part of a larger sector in
the past
In 2005, the e-Business W@tch will also deliver four cross-sector studies. These Special Reports will
focus on a particular e-business topic of interest across different sectors rather than on a single sector.
The 10 sectors and 4 topics analysed in 2005
The 10 sectors which are being monitored and studied in 2004/05 include seven manufacturing,
construction and two service sectors. Four of these sectors (namely food and beverages, textile,
machinery and equipment and tourism) were also covered in the previous years of implementation,
while the other six were covered as part of (aggregated) sectors analysed during 2002-2004.
Exhibit: Sectors and topics covered by e-Business W@tch in 2005
Sector Studies NACE Rev. 1 Publication date(s) *
1 Food and beverages 15 July 2005 Sep. 2005
2 Textile industry 17, 18 July 2005
3 Publishing and printing 22 July 2005 Sep. 2005
4 Pharmaceutical industry 24.4 July 2005 Sep. 2005
5 Machinery and equipment 29 July 2005 Sep. 2005
6 Automotive industry 34 July 2005
7 Aerospace 35.3 Sep. 2005
8 Construction 45 July 2005 Sep. 2005
9 Tourism 55, 62.1+3, 92.3+5 Sep. 2005
10 IT services 72 July 2005 Sep. 2005
Special Topic Reports
A A User's Guide to ICT Indicators: Definitions,
sources, data collection
July 2005
B Overview of International e-Business
Developments
July 2005
C e-Business Standards and Interoperability
Issues
Sep. 2005
D ICT Security and Electronic Payments Sep. 2005
* There will be 1 report (in 2005) on 4 of the 10 sectors, and 2 reports on the other six.
e-Business Interoperability
7 September 2005
Executive Summary
Objectives of this study
This report is one of four special studies published by e-Business W@tch in 2005, in addition
to its sector studies. While sector studies present e-business developments from a specific
industry's perspective, special studies focus on a particular ICT related topic, across sectors.
This study focuses on the concepts, application and adoption of e-business interoperability
and standards. It is intended as a sourcebook of reliable current background information,
source data and indicative findings for SME business managers and public policy strategists.
Interoperability and Standards
Business interoperability between different companies is gradually being enabled by more
sophisticated, and yet easier to manage, internet based systems. Systems such as ebXML
have reached a point where they are now ready for full scale deployment. The lure of instant
“plug and play” web and grid services is allegedly not far away. Behind these powerful new
tools is a myriad of standards and standards development organisations, some proprietary
and others more open. All are seeking their rightful place in the emerging Business
Interoperability Frameworks. To make sense of all this, work is constantly underway to
rationalise the standards maze, by selecting the best technologies, proving them in pilots and
introducing mechanisms to eliminate duplication and manage conflicts among standards
developers.
Europe has a role to play, primarily to ensure that the needs and requirements of the
European SMEs are met as quickly and as efficiently as possible. However, Europe too must
contribute its fair share to the international initiatives on standards convergence and
interoperability testing.
Companies are expected to innovate regularly and continually. The same expectation should
be placed on our standards development organisations and to the ways in which companies
develop, select and implement B2B standards.
Enterprise Size-bands
SMEs are not a homogenous set. This study in its analysis of the take up of standards and
technology clearly shows that the adoption rates and future plans are highly dependent both
on the sectors and the size of the companies involved. One of the basic premises underlying
the research is that a sector led approach to implementation, that meets national business
and cultural requirements, is required to achieve the maximum benefits. This must include
mechanisms to help SMEs set challenging and realistic targets for their B2B
implementations, for accelerated development and harmonisation of sectoral standard
roadmaps, and for the adoption of all relevant business and technology agreements.
National Initiatives
The sector independent characteristics of national interoperability initiatives in Luxembourg
and Australia, which focus on methods to encourage and enable implementation of e-
business standards by and for SMEs, are summarised and proposed for consideration as
models for similar initiatives in other sectors and geographies.
The following observations have been noted from the survey analysis and the national
initiatives:
e-Business Interoperability
September 2005 8
· There is evidence, of a high level of commitment and practice across all of the
enterprise size-bands, that standards play a critical role and are taken into account
when making decisions on what technology and data to use in the introduction of new
products, services and processes. This focus on innovation is continued in the case
study on the CRP Henri Tudor collaborative approach to e-business implementation
within the construction sector in Luxembourg.
· When studied by enterprise size-band, interoperability with companies outside their
own sector is most important for medium sized enterprises, irrespective of their
sector.
· Subject to the absolute recognition of open voluntary participation, the role of a
national or regional standards body can usefully include application of industrial
strength project initiation criteria, coordination and management processes designed
to assist small and medium enterprises (SMEs) move to and benefit from online
trading operations.
· The longer term requirements for sustainable agile manufacturing and flexible service
delivery in B2B networks can be best met by using open, flexible and efficient
business trading frameworks. Interoperability, enabled by appropriate standards
development and testing environments, is essential.
The comparative cross-sectoral data and conclusions from the e-Business Survey 2005
indicate that the pace and direction of e-business development differs considerably between
sectors and between types of enterprise. In some sectors, internet based e-business is
already significantly changing the way companies interact with their customers and business
partners. Nonetheless, despite the apparent differences in take up, there are commonalities
when viewed in the context of an e-Business Interoperability Framework: all sectors utilise
similar core business processes and share the need for agreed cross-partner trading profiles.
Policy conclusions
The study recommendations focus on medium term actions which could directly contribute to
implementation of common standards based solutions in all sectors. For long term value,
transparent fairness and maximum impact (relative also to the additional goal of movement
towards standards convergence) the proposed actions are suggested to be focused primarily
at the sectoral, cross-sectoral, and standards policy levels. The study results are fully
consistent with, and actively complement, the practical focus on increased implementation
and use of technology proposed in support of the i2010 Action Plan
1
.
1
Seehttp://europe.eu.int/i2010
e-Business Interoperability
9 September 2005
Policy Objective Suggestion for policy Potential Initiator(s)
Increase awareness and support mechanisms,
at sectoral level, with emphasis on SMEs:
· encourage sector led initiatives, ideally led
by respected neutral organisations, similar to
that conducted by CRP Henri Tudor as a
way to accelerate the pre-competitive busi-
ness and technology agreements required
for effective national and regional implem-
entation of existing and emerging sectoral e-
business standards and guide-lines;
· ICT Innovation Centres
· Sector Industry
Associations
· National Standards
Bodies
· Member state business
development agencies
· proposed new High
Level ebXML
Implementation Group
· encourage and assist CEN/ISSS eBIF and
EBES to jointly compile and distribute infor-
mation on successful implementations of
ebXML and Web Services by SMEs;
· ICT Innovation Centres
· EU and national RTD
projects
Sector level
interoperability
· facilitate SME access (preferably free) to all
strategic eBIF information documents.
· DG Enterprise and
Industry
· CEN/ISSS eBIF and
EBES members
Cross-sector
interoperability
Review the enterprise size-band data presented
by sector and topic in this report in a cross-
sectoral workshop and establish a process to:
1) assist typical SME enterprise size-band
representatives establish and share appr-
opriate targets and standards roadmaps
for interoperable e-trade with their
business partners;
2) establish formal BPI (Business Process
Integration) mechanisms (e.g. piloting,
training and model sharing) to encourage
and assist SMEs integrate business
processes into their B2B implementations;
3) look for cross-sector commonalities.
Where relevant actively promote European
common cross-sector interoperability
standards and convergence;
4) improve European inputs to the global e-
business ISO/IEC/ITU/CEFACT Business
Standards Convergence framework and, in
the global context, also collaborate with
NIST eBSC Forum convergence activities.
· SME Associations
· Sector Industry
Associations
· DG Enterprise &
Industry
· CEN/ISSS eBIF and
EBES members
Standards Policy Investigate the potential for developing a Bizdex
2
like approach to some forthcoming European or
national standardisation and e-business imple-
mentation projects.
· National Standards
Organisations
· ICT vendors
· DG Enterprise and
industry
2
BizDex(www.bizdex.com.au) is an example of a successful PPP (public private partnership) model where the
standards body takes on a much greater role and responsibility for the costs, standards and integration tools
developed. In effect it becomes part of a wider business partnership and assumes risks in taking this
approach.
e-Business Interoperability
September 2005 10
e-Business Interoperability & Standards:
A Cross-Sector Perspective and Outlook
1 Introduction
Interoperability refers to the ability of ICT systems and applications to work seamlessly
together, and for diverse information resources to be systematically and consistently
accessible to applications, when required. Without standards there would be no inter-
operability. This cross-sector study on e-business interoperability is intended as a timely
contribution to standards based competitiveness policies, as seen from the viewpoint of
SMEs, especially those operating in the manufacturing sectors.
1.1 Study structure
The study is organised in the following chapters and main sections:
· Chapter 1 defines the background, objectives, scope and key terms including a
cross-sector Open-edi framework perspective on B2B e-business interoperability,
such as current XML-based approaches (ebXML, Web services). The main
challenges and status of business interoperability from a standards perspective, are
summarised by reference to relevant initiatives in Europe, and in the US.
· Chapter 2 presents the interoperability and standards related findings from the
e-Business Survey 2005. The summary and interpretation of the findings are used to
facilitate identification and discussion of specific policy related conclusions, and
specific actions that may be required, to improve the use and development value of
standards to all concerned.
· Chapter 3 focuses on the experiences, results and conclusions drawn from two
significant and representative national examples:
o A case study dealing with change in the construction industry in Luxembourg;
and,
o the story of Bizdex, the Australian standards policy initiative on B2B.
A summary of lessons, potentially applicable to all sectors, is presented following
analysis of these descriptions and their high level public policy implications.
· Chapter 4 draws attention to public policy challenges and provides a synthesis and
an outlook which dovetails with the priorities in the i2010 initiative, emerging
standards policy and standards take-up objectives within European and national
initiatives. Overall conclusions are drawn from evidence presented in the report.
e-Business Interoperability
11 September 2005
1.2 Review of related e-Business W@tch findings
The European e-Business W@tch Synthesis Reports
3
, and Sector Impact Reports provide
extensive information, by sector and across countries in Europe, on the application of ICT to
meet business objectives. These reports are framed within the concept of the extended
enterprise, in the sense that a company is constituted not only by its management,
employees and means of production, but also by a functioning network of business partners,
including customers and suppliers.
In the European e-Business Report 2003, detailed information from extensive surveys is
presented according to the following framework for electronic business:
· e-Readiness: ICT infrastructure and skills development
· e-Activity: e-Commerce (frequency and intensity)
· e-Integration: business processes within and between enterprises
· e-Impacts: effects of e-business activity on enterprises
The theme of e-Integration is continued in the European e-Business Report 2004, which
confirms business process integration (BPI) as the big issue. The report observes that
exchange of standardised data
4
is increasingly recognised as an important indicator of
e-business activity. A special trend section, derived from the second part of the e-Business
Survey 2003 (November) on the use of electronic data standards, notes the following:
· The share, of companies that exchange standardised data, increases with the size of
the firm. More than 60% of the large firms interviewed said that they did so;
· EDI based standards are mainly used in manufacturing sectors and in retail. Sectors
with a strong EDI legacy may be reluctant to switch to other standards;
· XML based standards appear to be widely used by firms in the business sector. It is
possible that awareness for XML is particularly high among the knowledge- intensive
sub-sectors of business services, where web-based services play a very important
role in delivering services and information to customers. More predictably, XML based
standards (including, for example, RosettaNet) are also used more than on average
in high-tech sectors (electronics, ICT services);
· The STEP standard is used only by a minority of firms; its share was less than 10% in
all of the sectors surveyed, even among the large companies.
3
e-Business W@tch / European Commission (2002/2003). The European e-Business Report 2003. A portrait of
e-business in 15 sectors of the EU economy. Luxembourg: Office for Official Publications of the European
Communities, 2003
e-Business W@tch / European Commission (2003). The European e-Business Report 2003. A portrait of e-
business in 15 sectors of the EU economy. Luxembourg: Office for Official Publications of the European
Communities, 2003
e-Business W@tch / European Commission (2004). The European e-Business Report 2004. A portrait of e-
business in 10 sectors of the EU economy. Luxembourg: Office for Official Publications of the European
Communities, 2004
4
The survey question was: “Are you exchanging standardised data with your buyers or sellers electronically?
With standardised data we mean electronic product catalogues, orders, invoices, delivery notes and similar
business documents. We do not mean plain e-mails.”
e-Business Interoperability
September 2005 12
Referring to the conclusions from the e-Business W@tch Workshop (Montpellier, November
19, 2003), held in conjunction with the IDATE Annual Conference, the same 2004 Synthesis
Report noted the issue of interoperability and the success factors for implementation of e-
standards in the following succinct paragraph:
Experts pointed at a number of important requirements for the successful
implementation of e-standards. Success factors include community consensus on
essential details and the successful implementation among early adopters, which
normally results in a faster and broader adoption process. Progress in the
interoperability between systems and components should promote better integration
of front office and back office data information systems. However, it will be crucial to
take into account sector-specific issues in technical aspects, organisational issues
and semantics. Adopting a sectoral standardisation approach could ease
development, but may lead to difficulties in cross-sectoral data exchanges.
1.2.1 B2B Interoperability
Thus, in summary, B2B interoperability is seen as the central technical and business
challenge that companies face in relation to conducting business as an extended enterprise.
Bearing in mind that, ideally, B2B interoperability must at least have a common sectoral
foundation, it is clear that the most important issue is the integration of business processes
between business partners
5
.
While the concept of business to business (B2B) interoperability is straightforward, its
realisation in general has been costly, difficult and complex, and for a long time mainly
confined to electronic data interchange (EDI) between the large industry players.
Because of the cost and complexity of EDI, benefits often were more confined to a
limited group of large organisations and may have contributed mostly to consolidation
rather than to other types of structural changes.
6,7
5
The successful introduction of integrated business processes between two companies, and realisation of the
mutual benefits to be derived, will be influenced to an extent by whether they have already been successful in
individually automating and standardising their own internal processes as well as the level of integration
between their individual back and front office systems. As will be clear, later in this chapter, the same
processes used for inter-business interoperability can be applied to ensuring proper understanding and
description of internal business processes.
6
Wigand, R., Steinfield, C., and Markus, M. L., IT Standards Choices and Industry Structure Outcomes: The
Case of the United States Home Mortgage Industry. To appear in the Journal of Management Information
Systems, 22 (2) Fall, 2005. (pre-publication version, last accessed August 23, 2005,http://ebusiness.tc.msu.edu/netindustry/page2/files/JMIS2005.pdf).
7
Steinfield, C., Markus, M.L., and Wigand, R.T. Exploring Interorganizational Systems at the Industry level of
Analysis: Evidence from the U.S. Home Mortgage Industry. To appear in Journal of Information Technology,
18 (4), December 2005 (pre-publication version last accessed August 23, 2005,http://ebusiness.tc.msu.edu/netindustry/page2/files/JIT2005.pdf).
e-Business Interoperability
13 September 2005
1.2.2 Enterprise size-band
The e-Business W@tch reports continually confirm the differences shown by companies of
different size-bands, even within the same sector. The results from the Business Survey
2003 (November) clearly show, for instance, that the perceived importance of specific
emerging technologies increases almost linearly with firm-size, with large companies being
particularly prominent. However, this finding is not consistent across all sectors.
In addition, the Pocketbook of e-Business Indicators (2005), drawn from the results of the
e-Business Survey 2005, shows that the diffusion of advanced e-business software solutions
for automating business processes increases steadily by company size. For example, in
2005, about 8-10% of small companies, more than 30% of medium-sized enterprises, and
nearly 60% of large enterprises in the EU had an Enterprise Resource Planning (ERP)
system.
Further study and analysis conducted via the new e-Business Survey 2005 has yielded more
positive and robust survey results differentiating between enterprise size-bands as well as
sectors. These findings are presented and discussed in this report (see Chapter 2).
1.3 Objectives and scope of this study
This special study examines the issues relating to interoperability and e-business standards
that were outlined in the previous section. It uses the results of tailored questions, directed at
the sectors targeted in the 2005 e-Business W@tch work, to see what, if anything, has
changed in the intervening two years since the e-Business Survey 2003. The principal, firm
level, data gathering mechanism is a cross-sectoral CATI survey on interoperability and
standards. This is complemented by a case study on collaboration at national level and by an
extensive desk research based description of the Standards Australia development of
BizDex.
Items covered in the e-Business Survey 2005 include questions on whether standards are
considered as critical (or not), and whether they are taken into account in development of
new processes and products. The survey also seeks to assess the expressed attitudes within
the sample population to intra- and inter-sector interoperability, the current and projected use
of EDI/XML standards, the main gaps that are perceived in some critical e-business
standards, current use of open source software (OSS), and the future importance of Web
Services. The intention of the subsequent data analysis is to identify the primary factors that
influence and direct the main attributes related to implementation of interoperable e-business
standards, particularly those aspects that are independent of the specific sector chosen.
The case study on CRTI-B, and the description of BizDex (Standards Australia), address real
live scenarios, and potential sectoral differences or similarities in technical, semantic and
organisational systems, especially those that are of particular relevance to SMEs.
e-Business Interoperability
September 2005 14
1.4 Definition of key terms
1.4.1 Interoperability
When discussing ways in which two systems, components or organisations can work
together the terms interoperability, interface and integration frequently occur. A good
practical definition of interoperability is cited in CEN Report CR 14300:1999 "Interoperability
of healthcare multimedia report systems"
8
, and repeated in the CEN/TC 251 "Short Strategic
Study: Health Information Infrastructure"
9
, published in 2005. This definition of interoper-
ability, in its mention of a specific task, usefully distinguishes interoperability from integration.
It also brings additional precision and operational clarity to the IEEE and ISO definition.
Interoperability (CEN Report CR 14300:1999)
a state which exists between two application entities when, with regard to a specific
task, one application entity can accept data from the other and perform that task in an
appropriate and satisfactory manner without the need for extra operator intervention
Interoperability (IEEE and ISO)
the ability of two or more systems to exchange data, and to mutually use the
information that has been exchanged
Interoperability (IDAbc
10
)
the ability of information and communication technology (ICT) systems and of the
business processes they support to exchange data and to enable the sharing of
information and knowledge.
Interoperability (Miller
11
)
the ongoing process of ensuring that the systems, procedures and culture of
an organisation are managed in such a way as to maximise opportunities for
exchange and re-use of information, whether internally or externally
8
CEN/TC251/WG IV Health Informatics. Interoperability of Healthcare Multimedia Report Systems. Version 1.0.
(http://www.tc251wgiv.nhs.uk/pages/pdf/pt34fwd.pdf, last accessed August 23, 2005)
9
CEN/TC251 Health Informatics (2005) – Short Strategic Study – Health Information Infrastructure – working
draft, interim report v0.4. (http://www.centc251.org/TCMeet/doclist/TCdoc00/N00-074.pdf, last accessed
August 23, 2005)
10
IDAbc (2004) European Interoperability Framework for pan-European eGovenment services. Page 5
11
Interoperabilityhttp://hylife.unn.ac.uk/toolkit/Interoperability.html (last accessed August 23, 2005)
e-Business Interoperability
15 September 2005
1.4.2 Business Perspective
This study is conducted from a business perspective. In order to have a practical business
meaning and interpretation, interoperability must be understood and expressed in the context
of a business standards interoperability framework. The European Interoperability Frame-
work (EIF)
12
for pan-European eGovernment Services, published in November 2004 by the
IDA
13
defines an interoperability framework as follows:
An interoperability framework can be defined as a set of standards and guidelines
that describes the way in which organisations have agreed, or should agree, to
interact with each other. An interoperability framework is, therefore, not a static
document and may have to be adapted over time as technologies, standards and
administrative requirements change.
It is therefore worthwhile to step back at the beginning and adopt a general picture as shown
in the third and fourth definitions above. By so doing it is possible to better understand that:
· interoperability is not an end, in itself;
· standards while necessary are not sufficient for interoperability; and,
· any study of inter-enterprise interoperability and the standards that enable
interoperability, must be based on an understanding of the business, social,
cultural and political circumstances in which the enterprises operate.
In addition, it becomes clear that to be interoperable an organisation must be actively
engaged in the ongoing process of ensuring that its systems, procedures and organisational
culture are managed in a way that maximises opportunities for internal and external
exchange and re-use of information, whether by means of automated processes using ICT or
not. This is a fundamental issue.
1.4.3 Standards and Standardisation
The definition in Directive 98/34/EC is essential, because it underlies the New Approach and
European standards policy. For completeness, other definitions are also included. The
ISO/IEC definitions of a standard and of standardisation are particularly important, because
of the global nature of B2B and the voluntary, open way in which ISO/IEC standards are
developed.
The CRTI-B
14
definition of a standard is included because of the emphasis on
implementation and on the importance of collaborative agreement between the parties of all
doing things in a certain way. This definition also includes all ‘technical specifications’ that
are produced by industry groups and other initiatives. The difference between a full
consensus standard developed via an open and non-discriminatory process and a
specifications delivered through other means is also of interest.
12
European Interoperability Framework for pan-European eGovernment Services (2004)
(http://europa.eu.int/idabc/servlets/Doc?id=19528, last accessed August 23, 2005); see also the complete EIF
specification (http://europa.eu.int/idabc/en/document/3473/5585, last accessed August 23, 2005)
13
Interchange of Data between Administrations (IDA), is a Community Programme managed by the European
Commission's Enterprise and Industry Directorate General. IDA supports the implementation of EU legislation,
from internal market regulations to consumer and health policies, by facilitating the exchange of information
between public administrations across Europe through the use of information technology.
14
Centre de Ressources des Technologies de l’Information pour le Bâtiment (Luxembourg). See Section 3.1 of
this report
e-Business Interoperability
September 2005 16
standard (Directive 98/34/EC)
a technical specification approved by a recognised standardisation body for repeated
or continuous application, with which compliance is not compulsory and which is one
of the following:
— international standard: a standard adopted by an international standardisation
organisation and made available to the public;
— European standard: a standard adopted by a European standardisation body and
made available to the public;
— national standard: a standard adopted by a national standardisation body and
made available to the public
standard (CRTI-B)
codified agreement between parties who recognise the advantage of all doing certain
things in a certain way
standard (EN 45020; and ISO/IEC)
document, established by consensus and approved by a recognised body, that
provides, for common and repeated use, rules guidelines or characteristics for
activities or their results, aimed at the achievement of the optimum degree of order in
a given context
standardisation (EN 45020; and ISO/IEC)
activity of establishing with regard to actual or potential problems, provisions for
common and repeated use, aimed at the achievement of the optimum degree of order
in a given context
1.4.4 Open Standards
Open standards of whatever flavour and source are favoured for sustainable e-business
interoperability. However, despite the rhetoric that pervades the concept, there is no
commonly accepted, universal definition of an ‘open’ standard.
A recent comprehensive attempt is outlined in Resolution GSC-10/04
15
of the 10th Global
Standards Collaboration meeting (Sophia-Antipolis, September 2005) which defines as
“open” a standard which meets the following fundamental elements:
(1) the standard is developed and/or approved, and maintained by a collaborative
consensus-based process;
(2) such process is transparent;
(3) materially affected and interested parties are not excluded from such process;
(4) the standard is subject to RAND/FRAND
16
Intellectual Property Right (IPR)
policies which do not mandate, but may permit, at the option of the IPR holder,
licensing essential intellectual property without compensation; and,
(5) the standard is published and made available to the general public under
reasonable terms (including for reasonable fee or for free).
15
Global Standards Collaboration, 10
th
meeting Sophia Antipolis, September 2005. Resolution GSC-10/04:
(Joint) Open Standards (http://portal.etsi.org/docbox/workshop/sos_interoperability/SOS2/SOS2_13 ANSI
Views on open standards.ppt, last accessed 29 September 2005)
16
Fair Reasonable and Non Discriminatory
e-Business Interoperability
17 September 2005
Legislators have offered many definitions, and generally received strong reactions in return.
Two specific instances include the Business Software Alliance
17
response to the IDAbc
definition and the definition offered by the Danish Government
18
. More particularly, for
example, the 5th paragraph of section 2.5 of the Initiative for Software report
19
refer to
examples from France, Belgium, European Union, and the US and notes that these
definitions have in common the following principles:
availability, non-discrimination, publication, low costs and protection of intellectual
property rights (although in many cases there are no royalties due).
The Initiative for Software Report further notes that, although open standards allow the
implementation of open source software or proprietary software, an important principle is that
in order to guarantee the flexibility in assessment of the best technological solution to
enhance interoperability, the choice as to which standard and especially which software is to
be used must not be imposed by the government. In other words, regulatory efforts to
promote interoperability should be clearly separated from advocacy for open source
software.
1.4.5 Scope of standardisation
Given the diverse range of elements that are important to enterprises, when they are
establishing interoperable business, it is evident that the technology aspects of
interoperability are invariably complex. Addressing technology interoperability issues via
standards presents a range of challenges: one of the most important of these is the extent of
the problem to focus on. Thus, some standards are created to solve relatively narrow specific
technical infrastructure problems, while others address broad general and technical
management issues:
· One distinction is whether the standardisation addresses components only, or
whether it specifies a structure into which specific system wide solutions can be
embedded. There is a practical outcome to the difference. Generally, the wider the
problem scope addressed by a standard, the greater is the risk of producing over-
specified, over-complicated, and under-performing standards;
· The narrow standards can sometimes be easier to deliver and adopt, and provided
they fit into a workable functioning overall architecture, may as such have a relatively
higher record of market success than broader standards. The latter usually also take
longer to define and are thus potentially subject to more distractions and roadblocks
along the way.
E-business interoperability requires both types of standards. This study therefore focuses on
two exemplars of both types of standards:
· The system wide approach to interoperability and sets of e-business standards as
shown for example in the developments associated with ebXML;
· The development of web services, in which the emphasis is on component standards
and their integration within an overall architecture.
17
Concerns raised over proposed definition of 'open standards'http://europa.eu.int/idabc/en/document/4018/357, last accessed 29 September 2005)
18
Danish Government defines "open standards" (http://europa.eu.int/idabc/en/document/3132/333, last
accessed 29 September 2005)
19
Considerations on Interoperability and the Public Procurement of Software in Latin America 3/1/2005
(http://www.softwarechoice.org/download_files/Lat_Am_InteropWP.pdf, last accessed 29 September 2005)
e-Business Interoperability
September 2005 18
1.5 The B2B cross-sector approach
During the design of the e-Business Survey 2005 questionnaire, attention was given to the
Berlecon Research
20
report on e-business standards. That report, compiled on behalf of the
German Federal Ministry of Economics and Labour, also used a user survey and addressed
the topic in terms of the following standardisation issues:
· Identification and classification of products and components;
· Exchange of catalogue data;
· Synchronisation of data;
· Transactions, e.g. transactions of invoices or orders;
· Processes.
No attempt has been made to replicate the Berlecon Research study on a wider scale. Their
work was based on extensive in-person interviews whereas, for practical purposes, the
e-Business Survey 2005 questions are geared towards simple yes/no or Likert-type scale
responses gathered in a twenty-minute computer-aided telephone interview (CATI). Thus, in
order to build up a comparative analysis of the status within different sectors, the questions in
the survey are framed, for instance, to determine:
· the attitude to standards importance and use;
· the level of satisfaction, or perceived gap, associated with the cross-sector facets,
such as “catalogues and classification” and “messaging”.
This study focuses specifically on B2B application-to-application trading and standards
issues. The reasons for this focus are clear. The primary reasons are that the work is being
conducted in the e-Business W@tch area and because of the availability of data from
tailored questions included in the e-Business Survey 2005.
It is also relevant that B2B e-business involves vast sums of money, whereas B2C is still a
small fraction of B2B. As quoted at the CSW Informatics XML Summer School, 28 July
2003
21
the size of the US B2B business alone, according to Forrester, will exceed 12 trillion
dollars in 2006. This represents a huge B2B growth and the estimate is also greater by more
than a factor of ten than the figures reported by US Census Bureau for 2000.
Notwithstanding the possibility that the true 2006 figure will probably lie somewhere lower
than the Forrester predictions, it is clear from widely accepted industry trends that the
economic benefits to be gained by focusing on B2B e-trading are certain to be very
worthwhile.
20
Berlecon Research / BMWA (2003): E-Business-Standards in Deutschland: Bestandsaufnahmen, Probleme,
Perspektiven. Report by Berlecon Research on behalf of the Bundesministerium für Wirtschaft und Arbeit
(BMWA), April 2003 (http://www.berlecon.de/research/en/reports.php?we_objectID=125, last accessed
August 23, 2005)
21
Maler, E., XML for e-business (2003). (xml.coverpages.org/Maler-CSW-xml-for-ebusiness.pdf, last accessed
August 23, 2005)
e-Business Interoperability
19 September 2005
Exhibit 1-1: e-Business market opportunity
Source: XML for e-business
Eve Maler at CSW Informatics XML Summer School, 28 July 2003.
Sectors addressed
The ten sectors addressed in the e-Business Survey 2005 are listed in Exhibit 1-2.
Abbreviations of the sector names, as shown in the second column of Exhibit 1-2, are used
for convenience in the tables and charts in this report.
Exhibit 1-2: Sectors in the e-Business Survey 2005
Sectors Addressed in e-Business Survey 2005 Abbreviation
Food and beverages Food
Textile industries Textile
Publishing and printing Publish
Manufacture of pharmaceuticals Pharma
Manufacture of machinery and equipment Machine
Automotive industry Auto
Aerospace industry Aero
Construction Constr
Tourism Tourism
IT Services IT Serv
e-Business Interoperability
September 2005 20
1.6 Architecture background
In general, the approach to achieving “Interoperability” depends on the context and the
individual perspectives concerned. In the e-business context, there are two main facets:
· Technical Interoperability (TI), which determines how different software programs in
different companies can interact; and
· Business Interoperability (BI). Also often known as ‘Collaboration’, BI concerns itself with
the semantics and the agreements between companies acting in trading communities. It
determines how different companies can align their respective business processes in
order to do business electronically.
Neither is sufficient on their own; both are essential and must be simultaneously addressed,
preferably within at least a common sector driven approach.
Business Interoperability is a far more complex issue than Technical Interoperability,
since it not only involves semantics, but also culture, language, business practices,
legislation and corporate politics. A necessary ingredient for doing business
electronically is also the presence of up-to-date and correct product information with
the partners in the Supply Chain. Product Catalogues, Data Alignment and
Classification of products are topics related to this issue. (Dick Raman, CEN/ISSS
WS/EBES
22
Chairman, 23 March 2004)
Trading globally, over electronic networks, depends on the trust networks established
between suppliers and purchasers and also on the enabling physical and logical
infrastructures.
And all of this must be as easy as making a telephone call, even with trading partners
who are complete strangers. After all, with one telephone call we nowadays already
can place an order. Computerisation should make life easier, not harder.
23
1.6.1 EDI
Electronic Data Interchange (EDI) was first introduced more than 20 years ago and since
standardised in United Nations Centre for Trade Facilitation and Electronic Business
(UN/CEFACT). Throughout that time, EDI has proven to be a successful long-standing and
long-lasting technology standard for electronic trading transactions.
EDI techniques enable the exchange of transactional information between independent
organisations based on standardised business documents. Traditional EDI systems employ
specialised communications networks, value-added networks (VAN), to obtain enterprise
qualities of service. Although EDI serves its particular task very well in the right set of
circumstances, the cost of implementation per additional trading partner is expensive, the
information itself is not human readable, and often the technologies require the use of private
networks involving per-transaction costs.
22
The CEN/ISSS eBES (e-Business Board for European Standardisation) Workshop is a focal point within
Europe for the standardisation of technologies to exchange electronic business data. WS/eBES is the
"European Entry point" for the UN-ECE/CEFACT electronic business standardisation process.
See also the Business Plan December 2004
(http://www.cenorm.be/cenorm/businessdomains/businessdomains/isss/activity/wsebes.asp, last accessed August 23,
2005)
23
van Blommestein F.B.E. and P.G.L. Potgieser (2005). ebXML for managers: a co-production of ECP.NL and
Interpay. p22. (http://www.ecp.nl/publications/ebXML_for_managers.pdf, last accessed August 23, 2005)
e-Business Interoperability
21 September 2005
These characteristics of traditional EDI are summarised in the introduction to the Open-edi
reference model:
The economic advantages of Electronic Data Interchange (EDI) are widely
recognised. However, the cost of setting up an EDI relationship has been very high
due to the need for detailed bilateral business and technical agreement between the
involved business partners. The initial high cost of establishing such an agreement
does not justify short term partnerships. It has also been found that implementations
involving the management of a large number of partners and their associated
agreements are not productive Consequently most EDI implementations have been
successful only in long term partnerships, and between a limited number of
partners
24
.
Open-edi lowers these barriers by introducing standardised business scenarios and the
necessary services to support them.
Open-edi
25
The ISO/IEC Open-edi Reference Model provides a reference framework for the
identification, development, and co-ordination of Open-edi standards. This framework
addresses separately the complementary business and technology perspectives of business
transactions. These perspectives are defined as follows:
· Business Operational View (BOV): a standards perspective on business
transactions regarding the making of business decisions and commitments among
organisations, limited to those aspects which are needed for the description of a
business transaction;
· Functional Service View (FSV): a standards perspective on business transactions
limited to those information technology interoperability aspects of IT Systems needed
to support the execution of Open-edi transactions.
These views are not independent. The FSV related standards must take into account the
BOV related standards and vice-versa. As shown in Exhibit 1-3, the effective inter-
relationship between these classes of standards is a critical factor of the Open-edi reference
model.
The BOV related standards are tools and rules by which business users, who understand the
operating aspects of a business domain, may create business trading scenarios. Registration
authorities, for instance, will reference the BOV related standards when considering
scenarios for registration.
The FSV related standards are used by the information technology experts to design and/or
build IT systems which support the business needs. These experts produce products and
services conforming to FSV related standards. These so-called “Open-edi systems” support
the execution of Open-edi transactions.
Open-edi scenarios, built using BOV related standards, formulate requirements which are
demands placed on the products and services conforming to FSV related standards
executing the corresponding Open-edi transaction. These demands, which ultimately specify
the required ICT system components, include:
24
ISO/IEC 14662:2004(E). Information technology – Open-edi reference model. Introduction, Page v.
(http://isotc.iso.org/livelink/livelink/fetch/2000/2489/Ittf_Home/PubliclyAvailableStandards.htm, last accessed
August 23, 2005)
25
ISO/IEC 14662:2004(E). Information technology – Open-edi reference model.
(http://isotc.iso.org/livelink/livelink/fetch/2000/2489/Ittf_Home/PubliclyAvailableStandards.htm, last accessed
August 23, 2005)
e-Business Interoperability
September 2005 22
· identification of the functional capabilities necessary to support Open-edi
transactions;
· formal specification of these functional components developed using FSV related
standards;
· specification and agreement on the quality of service required from the functional
capabilities for these Open-edi transactions.
The primary benefit within the Open-edi scenario, is that there is in principle no need for prior
agreement on technical and business details in order for two enterprises to engage directly in
B2B. As long as both implementations conform to the FSV related standards, the Open-edi
processes ensure acceptance and processing of that information, in the context of that
scenario. In that case, by reference to the scenario and without the need for further
agreement, one or more other Open-edi parties can start trading electronically. However, the
legal requirements and/or liabilities resulting from the engagement of an organisation in any
Open-edi transaction may be conditioned by the competent legal environment(s) or the
formation of a legal interchange agreement between the participating organisations.
Open-edi parties need to observe rule-based behaviour and possess the ability to make
commitments in Open-edi (e.g. from business, operational, technical, legal and/or audit
perspectives). Open-edi essentially remained a concept until the advent of internet EDI.
Exhibit 1-3: Open-edi Reference model
BOV related
standards
FSV related
standards
Business aspects
of
business transactions
Information technology
aspects of
business transactions
Functional Service View
Business Operational View
Viewed as
B
U
S
I
N
E
S
S
T
R
A
N
S
A
C
T
I
O
N
S
Comply with
Covered by
Comply with
Covered by
Open-edi Reference Model
Inter-related
Internet EDI (XML/EDI)
Since the first appearance (1996) in Japan of Internet EDI, the simplicity of system
configuration, low management costs and essentially no usage fees have made it an
attractive proposition in comparison to traditional proprietary-EDI or EDI over private VANs
(Value Added Networks). This and other aspects related to XML/EDI are well documented in
the Internet EDI (XML/EDI): introduction guidebook
26
, published by the Electronic Commerce
Promotion Council of Japan.
26
Electronic Commerce Promotion Council of Japan. Internet EDI (XML/EDI): introduction guidebook, March
2003 (http://www.ecom.jp/ecom_e/press/20030529/InternetEDIGuidebook.pdf, last accessed August 23,
2005).
e-Business Interoperability
23 September 2005
1.6.2 XML – eXtensible Markup Language
The eXtensible Markup Language (XML) is a subset of SGML
27
. Its goal is to enable generic
SGML to be served, received, and processed on the Web, in the way that is widely possible
with HTML. XML has been designed for ease of implementation and for interoperability with
both SGML and HTML.The XML specification
28
defines a standard way to identify structures
by adding markup to documents containing structured information. Structured information
contains both content (e.g. words, tables, graphics, pictures) and some indication of what
role that content plays. The term "document" refers to traditional documents, like this one,
and also to wide range of other XML "data formats". These include vector graphics,
e-commerce transactions, mathematical equations, object meta-data, server APIs, and many
other kinds of structured information. As a very general rule, few documents exhibit no
structure. Thus practically all documents exhibit some structure and can be represented in
XML.
Unlike HTML, which has fixed tag semantics and tag sets, XML specifies neither semantics
nor a tag set. XML is a meta-language for describing markup languages and as such
provides the flexibility to define tags and the structural relationships between them that are
applicable to any domain of choice. Since there is no predefined tag set, there cannot be any
preconceived semantics. All of the semantics of an XML document will be defined either by
the applications that process them or by XML schemas or stylesheets. A convenient glossary
of XML terms is available online via the XML Acronym Demystifier
29
.
1.6.3 ebXML
The electronic Business using XML (ebXML) initiative began in November 1999 with the goal
to “enable anyone, anywhere to do business with anyone else”. The first complete
specifications were delivered in May 2001 after extensive collaboration between members of
UN/CEFACT and OASIS.
Fact Box:
ebXML (electronic business using eXtensible Markup Language). A single set of
internationally agreed upon technical specifications and common XML
semantics to facilitate global trade. The ebXML framework for e-business is a
joint initiative of UN/CEFACT and OASIS. (www.ebxml.org).
UN/CEFACT is the United Nations Centre for Trade Facilitation and Electronic
Business, the international body whose mandate covers worldwide policy and
technical development in those areas. Headquartered in Geneva, it has
developed and promoted many tools for the facilitation of global business
processes including UN/EDIFACT, the United Nations Directories for Electronic
Data Interchange for Administration, Commerce and Transport. Since 1999, it
has collaborated with OASIS in the development of ebXML. (www.uncefact.org)
OASIS (Organization for the Advancement of Structured Information Standards)
is a not-for-profit, global consortium that drives the development, convergence
and adoption of e-business standards. (http://www.oasis-open.org)
27
Standard Generalized Markup Language, ISO/IEC 8879:1986(E)
28
Extensible Markup Language (XML) 1.0 (Third Edition) W3C Recommendation 04 February 2004.
(http://www.w3.org/TR/REC-xml/, last accessed August 25, 2005)
29
XML acronym demystifierhttp://www.xml-acronym-demystifier.org/, last accessed August 23, 2005
e-Business Interoperability
September 2005 24
ebXML is unique in the breadth of its standards vision and is built on the previous Open-edi
standards efforts toward a shared global Internet-based B2B framework. ebXML is
complementary to many existing standards, such as legacy EDI, XML-based business
document standards, and Web Services.
The general technical and business design goals that underlie ebXML developments are
outlined as follows
30
in the European ebXML Information Centre web pages:
- Enable simple, easy and ubiquitous electronic business through the use of XML;
- Use W3C XML technical specifications holding recommended status to the maximum
extent practicable;
- Provide a global cross-industry open, interoperable standard for business-to-business
and business-to-consumer trade;
- Coalesce the structure and content components of divergent XML initiatives into a
single usable XML business standard;
- Provide impetus so that common resources currently engaged in short-term vertical
solutions may/can be marshalled to reach a common long-term, horizontal solution;
- Support vertical and horizontal segments of industry and business participants;
- Avoid proprietary solutions that impose financial or software requirements constraints
on ebXML users to buy, install or programmatically support any ebXML unique
software products in the conduct of business information exchange;
- Strive to minimize costs of doing business electronically;
- Provide multi-lingual support;
- Accommodate national and international trade requirements;
- Provide a migration path from accredited EDI and developing XML business
standards to standards EDI/XML standards framework
The first phase of the project was completed in May 2001 with the production of an
architecture and other key specifications to allow e-Business. Using ebXML, companies now
have a standard method to exchange business messages, conduct trading relationships,
communicate data in common terms and define and register business processes. ebXML
activity is still ongoing under the control of the two bodies, UN/CEFACT and OASIS, that
oversaw the core project. The specifications are being refined and projects are underway
that demonstrate the viability and real-world use of ebXML.
The ebXML initiative is clearly modelled on the Open-edi architecture. As shown by studies
and reports
31
, produced by amongst others the ebXML Marketing Group, it effectively meets
the need of enterprises, of any size and in any geographical location, to be able to conduct
business electronically in a simple, reliable and cost-effective manner. ebXML achieves this
by providing companies with a standard method to exchange business messages, conduct
trading relationships, communicate data in common terms and define and register business
processes. It thereby makes it easier for organizations to interface with others within and
outside their industry, open up new markets with less effort than before and, at the same
time, cut costs and simplify process associated with traditional document exchange.
30
eBES has established a European web sitehttp://www.ebxml.eu.org/about_ebxml.htm to complement the
www.ebXML.org web site and provide key information focused on the particular needs of the European user
community
31
ebXML Adoption Update, December 2003.
(http://www.ebxml.org/documents/ebxml_adopt_update_122203.pdf, last accessed August 23)
e-Business Interoperability
25 September 2005
As a clear international acceptance that ebXML standards enable enterprises in any industry,
of any size, anywhere in the world to conduct business over the internet, the International
Standards Organisation (IS0) published a suite of four ebXML standards as ISO technical
specifications, ISO/TS 15000
32
:
· ISO/TS 15000-1: ebXML Collaborative Partner Profile Agreement;
· ISO/TS 15000-2: ebXML Messaging Service Specification;
· ISO/TS 15000-3: ebXML Registry Information Model;
· ISO/TS 15000-4: ebXML Registry Services Specification.
ebXML for managers
'ebXML for managers' is the English version/translation of the original Dutch booklet 'ebXML
voor managers'. Published and co-produced in December 2004 by Interpay and ECP.NL, the
booklet explains ebXML from a business perspective. As the title indicates it is intended for
use by business managers. It explains the EDI precursor background of ebXML, shows the
application possibilities by use of concrete recent business examples and gives an indication
of what companies should do to be able to use ebXML and to benefit from its use.
The booklet presents a 4-step process to describe ebXML and its introduction in a business
context. The following text and Exhibit 1-4 are adapted from the booklet.
Exhibit 1-4: ebXML in four steps
Modelling Profiling Contracting Exchange
Design Time Run Time
ebXML
Standardized
Process models
Company profile Agreement
ebXML in four steps
Source: ebXML for managers (2005)
The Four Steps
In step 1 the business processes are analysed and modelled. The result is a set of diagrams
and a number of candidate sub-processes and candidate data elements. These elements are
then placed in the ebXML registry and harmonised by UN/CEFACT with the processes and
data of other sectors. The aim is to reuse as many of the processes and data as possible so
that they can be used for information between the sectors. In general, at present, data and
processes are being modelled for many sectors, usually through trade associations or other
national sectoral initiatives.
32
ebXML OASIS Standards Approved Under ISO/TS 15000 Designation, 29 March 2004
(http://xml.coverpages.org/ISO-ebXML.html, last accessed August 23)
e-Business Interoperability
September 2005 26
In step 2 this data is made context dependent. Companies first determine in which context
(sector, region, product types, etc.) they will operate. This will determine the kind of data they
should use in their processes. For example a trader in perishable goods will include a best
before date in his delivery message while a steel manufacturer will not. The profiling is
performed entirely in the background. The only additional requirement is to add decisions
that the ebXML software itself cannot decide on the basis of the stored information. These
are typically the company rules that the trader must comply with, e.g. payment on delivery or
afterwards by invoice.
While the first two steps involve manual modelling activities, step 3 can be fully automated.
Companies that wish to do electronic business find each other’s profiles in the ebXML
Registry (or they simply send it to one another). If the two profiles match, they can be
combined into an ebXML agreement. This is an XML file or a set of XML files that is used by
the ebXML software in administration systems or web browser to control the collaboration
between the companies.
In step 4, the actual electronic transactions based on ebXML can start. Governed by the
agreement, the messages are extracted from the company applications, converted into XML
messages, packaged in secure network envelopes and sent via the internet. At the receiving
end the messages are unpacked, checked and confirmed. It is then read into the application.
All of this takes place automatically within the framework of a monitored business process.
This ebXML approach is set to become the preferred solution worldwide for regulated e-
business between partners. The approach is applicable to any business, and in any sector.
Furthermore a wide range of commercial and open source software (see www.freebxml.org)
is available to assist implementation and operation of the four steps.
The booklet also outlines how those who want to use ebXML in their sector should proceed.
It highlights the need for knowledgeable and expert staff to ensure effective implementations.
Another factor critical for success is that the ebXML infrastructure must be designed in
accordance with the standard, and NOT specifically for any of the partners.
Using some additional ebXML terminology, the following stages apply in implementation and
operation:
· Defining the company’s Business Processes;
· Describing the Semantics in Core Components;
· Determining where in the company’s process what information is needed from the
partner;
· Defining how to allow partners access to the company’s information (Messaging, Web
Services);
· Using the company’s Collaboration Protocol Profile (CPP);
· Storing the information in a Repository;
· On request by one or other partner, the CPPs of two trading partners that want to do
business are then matched to produce a Collaboration Protocol Agreement (CPA).
Both the CPP and CPA are machine readable XML documents. The CPA can be directly
used by middleware
33
or Enterprise Resource Planning (ERP)
34
systems to monitor and
manage network traffic.
33
Software that connects two otherwise separate applications: for example, there are a number of middleware
products that link a database system to a Web server. This allows users to request data from the database
using forms displayed on a Web browser, and it enables the Web server to return dynamic Web pages based
on the user's requests and profile.
34
ERP (Enterprise Resource Planning) is an industry term for the broad set of activities supported by multi-
module application software that help a manufacturer or other business manage the important parts of its
e-Business Interoperability
27 September 2005
Loosely bound
As part of the movement away from proprietary platforms, Web services rely on loose, rather
than tight, couplings among Web components. According to Brian Travis, SOAP consultant
and author, "Systems that rely on propriety objects are called tightly coupled because they
rely on a well-defined but fragile interface. If any part of the communication between
application and service object is disrupted, or if the call is not exactly right, unpredictable
results may occur." Traditional EDI is an example of a tightly-coupled framework for doing
electronic commerce. Loosely coupled systems allow for flexible and dynamic interchange in
open, distributed Web environments.
e-Business interoperability framework (ebXML based)
A simple graphic model summarising the components of the ebXML architecture outlined in
the previous section, together with additional considerations that need to be managed as part
of an e-Business Interoperability Framework is Exhibit 1-5. The chart is a variation on the
one presented by Schuldt
35
at the NIST e-Business Standards Convergence Forum meeting,
May 29, 2003).
Exhibit 1-5: e-Business Interoperability Framework
Business Applications (generally sector specific)
Partner
A
Outreach &
Policy
Business Processes
Component Elements
Registry & Repository
Trading Partner Profile
Transport & Package
Security
Partner
B
Technical Environment (generally partner unique)
Adoption of ebXML
The OASIS ebXML Awareness Team, with the assistance from OASIS member
organisations and partners, have compiled a report giving a global picture of the status of
ebXML adoption
36
. This December 2003 report summarises the status of around a hundred
completed, ongoing or planned ebXML-related projects. It also notes the increased
awareness of the extensive ebXML-related implementations and other activity already in
place across the globe.
The European Commission's Interchange of Data between Administrations (IDA) published a
study in September 2003, "Business to Business Frameworks for IDA Networks," stating:
ebXML is the only framework that is at the same time generic and flexible, and can be
used for inter-administrations relations. Moreover, ebXML is clearly the only trend for
organised business communities. The general recommendation is to follow ebXML
business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers,
providing customer service, and tracking orders. ERP can also include application modules for the finance and
human resources aspects of a business. Typically, an ERP system uses or is integrated with a relational
database system.
35
Schuldt, Ron. e-Business standards reuse, convergence, and deployment.
(http://www.mel.nist.gov/div826/msid/sima/ebsc/files/aia.pdf, last accessed August 23, 2005)
36
ebXML Adoption Update, December 2003.
(http://www.ebxml.org/documents/ebxml_adopt_update_122203.pdf, last accessed August 23)
e-Business Interoperability
September 2005 28
standards as much as possible. This is coherent with the fact that many exchanges
between European administrations reflect the interactions between those
administrations and the national business world
37
.
1.6.4 Web services
Web services are XML applications mapped to programs, objects, or databases or to
comprehensive functions. Using an XML document created in the form of a message, a
programme
· sends a request to a web service across a network; and,
· optionally, receives a reply, also in the form of an XML document.
Web services standards define the format of the message, specify the interface to which the
message is sent, describe conventions for mapping the contents of the message into and out
of the programmes implementing the service, and define mechanisms to publish and to
discover web services interfaces.
ebXML relationship to Web Services and the Semantic Web
ebXML and Web services are complementary sets of service-oriented architecture
technologies. In current practice, a number of their various elements are implemented in
combination. Because of this, a natural cross-fertilisation has occurred between the
technologies. For example, the ebXML Messaging Specification uses SOAP (Simple Object
Access Protocol) message headers, while its reliability model is being set as the standard for
Web services through the OASIS Web Service Reliable Messaging Technical Committee.
The complementarity of both ebXML and Web services is also mentioned in the previously
referenced “Business-to-Business Frameworks for IDA Networks” study published in
September 2003 by the European Commission's IDA (Interchange of Data between
Administrations):
Web Services and ebXML are not competing frameworks. They can be viewed as
serving two different B2B models and will continue to be used in parallel
36
.
ebXML provides core web services for e-Business. Exhibit 1-6: Core services for e-Business
shows how the ebXML specifications are positioned in the centre. The ebXML
implementation foundation comprises four components: messaging (ebMS), collaboration
profiles (CPPA), business process (BPSS) and metadata registry.
When considered as part of a wider component based web service offering, the technical
details of the wide range of standards yet undecided and under development for Web
Services becomes quite complex and diffuse. Many different proprietary offerings and groups
are struggling for primacy. Details of these standards and discussions are outside the scope
of this report as they are neither relevant nor required in this business perspective.
Nonetheless, Exhibit 1-6 provides a brief glimpse at the complexity, and hence uncertainty,
surrounding current web service standards. Thus, in general, when the choice permits and
the business needs demand, it is considered a safer option to adopt the proven EDI/XML
(ebXML) solutions now and to wait until web service standards settle into a more stable
configuration. As both approaches will coexist for some considerable time, the investment in
ebXML will continue to pay dividends for the foreseeable future.
37
IDAbc. Business to Business Frameworks for IDA Networks, September 2003
(http://europa.eu.int/idabc/en/document/1564/5587, last accessed August 23, 2005)
e-Business Interoperability
29 September 2005
Exhibit 1-6: Core services for e-Business
38
Source: Webber, David (20030909). Q&A with David Webber, Co-chair of the ebXML Joint Marketing Team
(http://www.developer.com/xml/article.php/3074481, last accessed August 23, 2005)
1.6.5 Grid Services
Will there ever be stable Web Service standards
39
? Future interoperability capabilities will be
greatly influenced by the transition from Web Services to Grid Services. Web Services
connect applications across large heterogeneous networks. As Web Services become widely
implemented and supplanted, the nature of applications will change to become more like
virtual enterprises: drawing on distributed resources as and when required. Thus, many
applications will be constructed dynamically from available services, depending on the
functionality that is needed or available. The expectation is that the standards requirements
focus will shift from application connectivity standards to infrastructure requirements, such as
the need to communicate across different operating systems, access files that are managed
by different file systems, operate in an environment where there are multiple administrative
domains, each with its own security approach, and operate in an environment where
individual resources can fail.
If, as some contend, the market for Web Services has peaked, and Grid Services are already
the next big venture, it is likely that there will never be fully stable Web Service standards. In
that event it is advisable for SME managers to be very cautious before risking their business
on unproven Web Services. ebXML represents a far safer and more viable option at this
time.
38
See Webber, David (20030909). Q&A with David Webber, Co-chair of the ebXML Joint Marketing Team
39
Grid computing - today and tomorrow: another view. Grid Today Vol. 1 No. 9 August 12, 2002
(http://www.gridtoday.com/02/0812/100221.html, last accessed 23 August 2005)
e-Business Interoperability
September 2005 30
1.7 European interoperability initiatives
The issue of interoperability has dominated standards work for well over a decade. For
example, in the mid 90s, ISOIEC JTC 1 established a Special Working Group reporting
directly to the JTC 1 plenary on Standards Conformance and Interoperability. While there
was some interest in this work it was generally perceived as being an additional overhead
and after 2-3 years the responsibilities of the group were evolved to the technical
committees. More recently there has again been a surge in interest in interoperability within
standards organisations.
European Standardisation organisations
Both CEN and ETSI have groups focused on interoperability. To a first approximation:
· CEN/ISSS Workshop eBIF
40
(e-Business Interoperability Forum) is a strategic policy
group which addresses business interoperability issues. CEN/ISSS eBES (e-business
Board for European Standardisation) Workshop, the "European Entry point" for the UN-
ECE/CEFACT electronic business standardisation process, produces consensus pre-
standards. The two groups are complementary and compatible.
· ETSI via its Interoperability PlugTests
41
and its recent focused conferences on
interoperability
42
is geared to address the technical issues.
Fact Box:
CEN and ETSI – European standardisation and interoperability
organisations
CEN is a multinational, multi-sector, highly decentralized organisation aimed
primarily at facilitating the emergence of coherent consensus between
economic partners who, within the framework of national delegation, or direct
industry participation depending on the ultimate deliverable, involve themselves
voluntarily in technical negotiations leading to the adoption of European
Standards and other CEN deliverables.
CEN/ISSS (Information Society Standardisation System) provides market
players with a comprehensive and integrated range of standardisation services
and products, in order to contribute to the success of the Information Society in
Europe. www.cenorm.be
ETSI, the European Telecommunications Standards Institute is an independent,
non-profit organisation, whose mission is to produce telecommunications
standards for today and for the future. Based in Sophia Antipolis (France), the
ETSI unites 688 members from 55 countries inside and outside Europe,
including manufacturers, network operators, administrations, service providers,
research bodies and users. The activities in telecommunications, broadcasting
and related standardisation are supplemented by interoperability testing
services and other specialisms. ETSI's prime objective is to actively support
global harmonisation.http://www.etsi.org
40
http://www.cenorm.be/cenorm/businessdomains/businessdomains/isss/activity/ebif.asp, last accessed 29
September 2005
41
http://www.etsi.org/plugtests/, last accessed 29 September 2005
42
http://www.etsi.org/pressroom/Previous/2005/2005_05_sos.htm, last accessed 29 September 2005
e-Business Interoperability
31 September 2005
The European ebXML Information Centrehttp://www.ebxml.eu.org/ was developed by eBES.
It complements the www.ebXML.org web site by providing key information in several
Community languages focused on the particular needs of the European user community and
by providing guidance to users on related subjects such as “How to migrate to ebXML”.
Unfortunately, the ebXML Information Centre is a little out-dated. Information is not current,
despite the fact that it is supposed to be maintained by eBES in collaboration with ebXML.org
and the ebXML Joint Marketing Team.
The aim of the European ebXML Information Centre is to add value to the international
ebXML deliverables by providing information in different European languages, adding a
missing component to meet European requirements where needed. Through this it aims to
assist in the education of user communities, developers and business experts on ebXML in a
comprehensive yet understandable manner.
The specific objectives of the European ebXML Information Centre are to:
· Disseminate outputs from the ebXML project;
· Support the dissemination of emerging standards in ebXML, including the outputs
from OASIS and UN/CEFACT, and also the outputs from the eBES workshop;
· Provide a central resource for organisations and individuals to access information on
the current state of developments in ebXML, and in wider XML standardisation;
· Provide a reference repository for ebXML standardisation related resources;
· Provide information to help the migration of EDI standards and systems to XML.
Each of the above groups has been relatively successful in relation to their stated goals and
individual schedules. In particular all have been very successful in bringing together technical
experts and managers and in establishing an extensive body of literature, presentations and
links to other organisations active in interoperability worldwide. This also includes two-way
links to the FP7 projects Interop NOE, ATHENA IP and the eBSC (e-Business Standards
Convergence) Forum based in US and for which NIST provides the Secretariat.
However successful eBIF has been for its current members, and the organisations they
represent, the multiplier effect of the limited number of active participants and limited
resources in eBIF is not sufficient to ensure that the information gathered is effectively
disseminated to all of the European business and technical managers who can use it. This is
effectively every SME manager in Europe. Both the frequency and content of dissemination,
and the methods of reach need to be appropriately increased.
What is required for such a breakthrough in implementation rates of EDI/XML to occur? This
is the key question. EDIFACT offered almost the same inter-company service level vista as,
for instance, ebXML does. EDIFACT was picked up by the large companies, yet hardly ever
by SMEs. In all probability, unless specific action is taken, the same could happen again and
the question becomes moot. Active dissemination, increased awareness and visible
leadership are required to show that ebXML is intuitively easier for SMEs to implement and
use, with consequent benefits for their companies, customers and suppliers.
e-Business Interoperability
September 2005 32
European Research and Technology Development Projects
Some highlights from the current active interoperability projects, especially any plans to work
with or involve SMEs in implementations, are summarises in the following table, Exhibit 1-7.
Exhibit 1-7: European RTD Projects on Interoperability
INTEROP
FP6 Network of
Excellence
www.interop-noe.org
The project is now entering the second half of its planned 36 month
lifespan. The main work following the FP5 IDEAS project is on:
- Architecture and platforms
- Enterprise modelling
- Enterprise ontologies
The scientific value added resulting from the fusion of these three multi-
disciplinary components has confirmed, to the consortium members, the
potential of an emerging research topic and associated establishment in
Europe of a virtual laboratory on Interoperability for Enterprise Software
and Applications (IESA). A proposal for creation of a European Master’s
degree programme in interoperability, when implemented will add
considerable value to the European Research Area. There is a good
public release of approved documents. Deliverable 12.1 Methodology to
implement services and develop take up actions towards SMEs is
available from the site and outlines the proposed methodology to
implement services and to develop take up actions towards SMEs.
Note: CRP Henri Tudor, the source of the business case in this report, is
a core member of the INTEROP NoE.
ATHENA
FP6 Integrated project
www.athena-ip.org
ATHENA builds upon the FP5 IDEAS project, with many of the original
project partners continuing to work together. The main objectives are to
lay down the foundation for long term research into interoperability from
a business perspective. Deliverable 3.5 ATHENA Contribution to
Interoperability Action Plan (Version 1, March 2005) identifies five initial
key component areas for a business interoperability framework: value
model, benchmarking, community and consensus building and e-
business digital divide. The latter relates to addressing the gulf that is
opening up between enterprises from different size-bands, and the
assistance that can be given to help SMEs understand and achieve the
benefits of e-business interoperability. ATHENA plans to work with
some SMEs, for the establishment of an Enterprise Interoperability
Centre (EIC), and for mechanisms to make the concept of
interoperability meaningful in business terms to a business audience.
The EIC will be terminated in 2007, based on current schedules, unless
it is independently viable by then.
Each of these projects could contribute to increasing take up of e-business in all sectors
across Europe. To do this credibly, they need access to, and support from, a wide range of
companies. They also need to establish positive partnerships with standards development
organisations and e-business interoperability standards policy groups in order to effectively
avoid duplication and realise the potential synergies that exist. At present, however, it
appears that a strong focus on collaboration with policy groups such as eBIF and
contributions to e-business standards convergence is lacking. Perhaps there is an
expectation that the work of UN/CEFACT Management Group Framework and eBSC
Model/Framework will deliver the latter in due course (see next section).
e-Business Interoperability
33 September 2005
1.8 Other interoperability initiatives
Two other major initiatives are of interest:
· ISO/IEC/ITU/CEFACT MoU Management Group Framework;
· NIST e-Business Standards Convergence (eBSC) model/framework.
ISO/IEC/ITU/CEFACT MoU Management Group Frameworkhttp://www.itu.int/ITU-T/e-business/mou/ provides access to an April 2005 presentation which
outlines the goals and achievements of the Memorandum of Understanding (MoU). The
business requirement is clear: e-business is becoming a cornerstone of the world economy;
full benefits for consumers, industry and government demand a coherent set of information
and communication technology standards that are “open, interoperable and internationally
accepted” so that they can:
· support dynamic development of e-business;
o across the manufacturing and service industries;
o along the global supply chain from supplier to consumer;
o throughout the lifecycle of products, which may be decades;
· and, provide effective services to the citizen.
The basic requirement identified in the MoU is for a single clear and unambiguous set of data
definitions and relationships as the basis for defining sharable sets of data for the different
processes in electronic business. Using this it will be easier to achieve modularity,
consistency and interoperability between the various standards used. The MoU Management
Group is the coordination authority for developing an integrated, modular architecture of
information for Electronic Business. The architecture must include as a minimum:
· clear, unambiguous definitions of the information, capable of interpretation into
multiple languages;
· fixed relationships between elements of information;
· hierarchies of information elements;
· identification of information that should be maintained through registration authorities.
The MoU recognises the responsibility of the participating International User Groups for
contributing to the specification of the requirements for standards for electronic business,
although they do not have a unique responsibility. Within this context, an agreed and
regularly updated division of responsibilities is issued. While most of the organisations
participating are global, CEN/ISSS is a “user signatory” to the MoU and participates in
Management Group activities.
NIST e-Business Standards Convergence (eBSC) model/framework
The e-Business Standards Convergence (eBSC) Forum is a collaborative effort open to
industry, government and global organisations and associations with active e-business
initiatives, standards development, conformance or interoperability testing activities.
Participants in the eBSC Forum are encouraged to work on the tasks defined by the Forum,
contribute to achieving convergence of e-business standards and cross-industry inter-
operability and champion these efforts in their industry and organisation. The results of the
eBSC Forum will be made available to the public on a royalty-free basis.
43
43
http://www.mel.nist.gov/div826/msid/sima/ebsc/
e-Business Interoperability
September 2005 34
Common framework
Exhibit 1-8: MoU Framework for e-business Standards
T
h
e
M
o
U
o
n
e
T
h
e
M
o
U
o
n
e
- -
B
u
s
i
n
e
s
s
S
t
a
n
d
a
r
d
s
B
u
s
i
n
e
s
s
S
t
a
n
d
a
r
d
s
e
B
u
s
i
n
e
s
s
R
e
q
u
i
r
e
m
e
n
t
s
Process Models, modelling tools and templates
User view
eg STEP ARM,
Information
in context
eg STEP AIM,
BIE
Core
information
eg STEP IR, TDED,
Core components,
BSR, ISO 15418
Aggregated
resources
eg STEP ARs,
Aggregate CC
Reference data
Code lists
Dictionaries
Catalogues
Object identifiers eg Shipping labels, UID
Terminology
Product
Classification
Data
S
c
e
n
a
r
i
o
m
o
d
e
l
l
i
n
g
Security
Non-repudiation
Access control
Availability
Confidentiality
Authentication
Integrity
Naming
conventions
Repositories
Legal and Commercial eg CPPA, DDR, IPR
Core ICT standards, eg RFID, AIT, telecoms, character sets
EDI
Language
bindings
Web
services
XML
eg ebXML,
UBL
STEP Part 28
Text
encoding
Other
encoding
eg ASN.1
Conformance
testing
Guidance eg MIG, PLCS DEX
Representation
Tech.
docs.
The MoU Framework for e-business standards is shown in Exhibit 1-8. It is aligned with the
Open-edi model, includes CEFACT and OASIS models; and is actively supported by the
NIST eBSC activity. Ideally the MoU Framework and the eBSC Framework/matrix will
converge to a single model in the short term
44
. Any sector will then be able to use the
converged framework model as a basis for e-Business Interoperability.
However, that is not an easy task. One of the difficulties in standards convergence is that few
standards overlap 100%. There are aspects on each standard that might be ideal in a
converged standard but then the problem of existing deployments of both standards remains.
When the number of standards to be converged increases the number of inter-linkages to be
managed grows much faster than just an n-squared problem as it could, for instance, be
necessary to simultaneously combine and restructure several different standards from
different sources. The challenge is that real convergence requires active good-will and
participation, not only from the bodies that create the standards, but also from those who
have created/deployed or are about to create/deploy existing or emerging standards. It is
envisaged that the converged model will also include an open registry for e-business
standards work. For this metadata and a federated update mechanism is expected to be put
in place, with moderation for consistency.
44
Aerospace Industries Association. Presentation at eBSC Meeting on May 6, 2005http://www.mel.nist.gov/div826/msid/sima/ebsc/files/aia_ebiz_interop_strategy.pdf
e-Business Interoperability
35 September 2005
2 Survey results on Standards & Interoperability
This chapter presents the background to and the analysed results of some of the survey
data. The intent is to accurately describe the results from the survey and to summarise and
present these results in a readable and usable manner. To this end, as far as possible all
results are expressed in terms of enterprise size-bands. No explicit reference is given to
weighting the results for employment or national distributions.
The interpretation of the charts and tables included in this section would require extensive
micro-analysis and details on the circumstances of the companies concerned. That is not the
purpose of the report. The objective is to take a high-level view of e-business interoperability
and standards issues and describe what is found. The following Socratic type dialog taken
from Bruno Latour’s unpublished draft A prologue in the form of a dialog between a student
and his (somewhat) Socratic Professor
45
emphasises the importance of an accurate
description. In the extract, S denotes the student and P denotes the professor:
S – But you always need to put things into a context, don’t you?
P — I have never understood what context meant, no. A frame makes a picture look
nicer, it may direct the gaze better, increase the value, but it doesn’t add anything to
the picture. The frame, or the context, is precisely the sum of factors that make no
difference to the data, what is common knowledge about it. If I were you, I would
abstain from frameworks altogether. Just describe the state of affairs at hand.
S — ‘Just describe’. Sorry to ask: but is this not terribly naïve? Is this not exactly the
sort of empiricism, or realism, that we have been warned against? I thought your
argument was, how should I say? more sophisticated than that.
P — Because you think description is easy? You must be confusing description, I
guess, with strings of clichés. For every hundred books of commentaries, arguments,
glosses, there is only one of description. To describe, to be attentive to the concrete
states of affairs, to find the uniquely adequate account of a given situation-- I have,
myself, always found this incredibly demanding.
The underlining is not in the original extract. It has been added to emphasise the point being
referenced for this report regarding the importance of accurate descriptions prior to any
analysis and commentary.
The information about the attitude of companies in each of four enterprise size-bands across
9 sectors is an important asset. It is essential vital that the information be described and
presented just as it is. The primary purpose of the following pages therefore is to present a
rich summary of the information, in a format that is as readable and understandable as
possible. There are commentaries in each sub-section. However the primary value of this
chapter lies in the accuracy of the description. Only through that will it be possible to derive
the true and uniquely adequate account of interoperability across the sectoral and enterprise
size differences.
45
Latour, Bruno. A prologue in form of a dialog between a student and his (somewhat) Socratic professor
(www.ensmp.fr/~latour/articles/article/090.html, last accessed August 23, 2005)
e-Business Interoperability
September 2005 36
2.1 The research questions
The application of technology to business must be driven by business strategy, not the other
way around. ICT is just a tool. Standards and interoperability are each a means to an end.
They are not ends in themselves. In this vein, interoperability is best viewed as a continuum.
It is not a binary option: either 100% present or not. There are different levels and nuances of
interoperability possible. Interoperability is generally a multi-layered service, with specific
measurable value to the business partners involved, rather than solely an abstract idealised
binary choice. The research questions addressed in the study are therefore:
· How do companies perceive the importance and role of standards for e-business
interoperability, specifically application to application interoperability?
· What constitutes the essential cross-firm and cross-industry elements of EDI-based
trading and its current successors? What interoperability elements of B2B ICT
infrastructures need to be harmonized or standardized and what are the current
perceptions regarding some specific standards issues? What are the implications for
standards policy from the result?
· Are interoperability frameworks now the main driver in e-business standards
activities? What are the overall implications, with particular relevance to
implementation issues and SMEs?
· Do replies to the above questions imply a requirement for dramatic change and
innovation in standards policy?
The responses to the e-Business Survey 2005 are analysed and presented according to firm-
size and industry sector. Note that geographical region is not considered a major factor in
B2B interoperability requirements, and thus the analysis and data presented makes no
reference to national identities.
2.2 The e-Business Survey 2005
e-Business W@tch collects data on the use of ICT and e-business in European enterprises
by means of representative surveys. The e-Business Survey 2005, which was the third
survey after those of 2002 and 2003, had a scope of 5,218 telephone interviews with
decision-makers in enterprises from seven EU countries (the EU-7, i.e. Czech Republic,
France, Germany, Italy, Poland, Spain and the UK), which account for roughly 75% of the
EU-25 population and GDP.
The survey was carried out as an enterprise survey: data collection and reporting focus on
the enterprise, defined as a business organisation (legal unit) with one or more establish-
ments. Interviews were carried out in January and February 2005. Except for the aeronautics
industry, where only 163 company interviews could be realised due to the small universe of
firms in this sector in the EU-7, about 560 interviews per sector were conducted.
46
In contrast to the surveys of 2002 and 2003, the survey of 2005 considered only companies
that used computers. Thus, the highest level of the population ("base") was the set of all
computer-using enterprises that were active within the national territory of one of the
respective countries, and that had their primary business activity in one of the sectors
specified by NACE Rev. 1.1 categories. Therefore it makes a difference if a figure represents
a percentage of "all companies" (as in 2003) or a percentage of "companies using
46
The survey was conducted using computer-aided telephone interview (CATI) technology. Field-work was
coordinated by the German branch of Ipsos GmbH (www.ipsos.de) and conducted in co-operation with local
partner organisations.
e-Business Interoperability
37 September 2005
computers" (as in 2005). Differences are much less pronounced, though, when figures have
been weighted by employment.
47
The second important difference between the 2003 and
2005 surveys concerns the configuration of sectors. Three very large sectors (retail, health,
business services) that had a major impact on aggregate results in 2003 were not continued
in 2005. Instead, another huge sector (construction) was introduced. For these reasons,
direct comparisons of aggregate results should be cautiously made and only with explicit
reference to these differences.
Sample Sizes
The sample size per sector and per enterprise size-band is shown in Exhibit 2-1.
Exhibit 2-1: e-Business Survey 2005: Sample Size per Sector per Enterprise size-band
Enterprise
Size-band
F
o
o
d
T
e
x
t
i
l
e
P
u
b
l
i
s
h
P
h
a
r
m
a
M
a
c
h
i
n
e
A
u
t
o
A
e
r
o
C
o
n
s
t
r
T
o
u
r
i
s
m
I
T
S
e
r
v
Enterprise
size-band
Totals
s1-micro 194 188 192 182 192 179 88 192 193 196 1796
s2-small 145 146 148 160 147 149 42 145 145 146 1373
s3-medium 168 171 170 140 169 167 20 169 171 171 1516
s4-large 64 56 53 50 57 70 13 60 58 52 533
Sector
Totals 571 561 563 532 565 565 163 566 567 565 5218
This special cross-sector study makes no reference to the country distributions. It is
considered that while there may be cultural differences in the attitude to standards, and
differences in attitudes to business collaboration and take-up of technology standards, the
differences between countries also reflect the existing sector distributions.
Enterprise size-bands
This report concerns the status, attitude and behaviour of firms to e-business interoperability
and standards. In view of this subject matter, the report uses unweighted data on the number
of firms by sector. Where relevant and statistically correct, information is presented by
enterprise size-band. Because of the low number of companies surveyed in the aerospace
sector, caution is advised when working with enterprise size-band data for that sector.
Treatment of "don’t know" answers
The replies to the questions in the e-Business Survey 2005, which provide the raw data for
the analyses in this chapter, are generally answerable by a simple yes or no. In those cases
the data presented first excludes the Don’t Knows e.g. the fraction of those who reply in the
affirmative are calculated (per enterprise size-band, per sector) by dividing the number who
respond yes by the sum of the numbers who respond either with yes or no. This fraction is
then converted directly into a percentage figure.
A “Don’t Know” for direct questions, with an expected answer of yes/no, may arise due to
lack of immediate knowledge on the part of the survey respondent, or may also be due for
instance to uncertainty about the question, or indeed their company strategy in a particular
area. In all cases it is possible for the reader of this report to make alternative calculations by
47
Employment-weighted figures should be read as "enterprises comprising x% of employees" in the respective
sector (or country). Employment weighting is useful because, due to the significantly greater number of micro-
than non-micro-enterprises, un-weighted figures would effectively represent mainly the smallest sizes of firms.
e-Business Interoperability
September 2005 38
combining the information given on the effective sample sizes in the analysis together with
the data in Exhibit 2-1: e-Business Survey 2005 Sample Size per Sector per Enterprise size-
band.
Exclusion of tourism sector
As this report is concentrating to a large extent on interoperability in the manufacturing
sectors, the tourism sector was excluded from the standards questions. This means that, in
most instances presented in this report, the overall survey population size is reduced by 567
i.e. from 5218 to 4651 companies.
48
Further information
More detailed information about the survey methodology, including information about
sampling and the business directories used, the number of interviews conducted in each
country and sector, and data on non-response rates, are available in the Methodology Annex
and on the e-Business W@tch website at www.ebusiness-watch.org/about/methodology.htm.
2.3 Do standards matter in innovation?
Although not the first question addressed as part of the “Standards Group” of questions in
the e-business Survey 2005, the question on the importance attributed to standards in
relation to innovation is one of the most important questions in the entire set. Thus the
question and the responses to the question are addressed first in this analysis.
A steady stream of new products, services and business processes are pre-requisites for the
jobs and sustainable growth envisaged in the Lisbon Agenda. Some innovations do not
require consideration of existing or new standards. Some do. How can one distinguish
between the two types?
This survey question was direct. It reads “Does your company take into account industry
standards and specifications when making decisions on what technology and data standards
to use for new product, services or business processes?" The spectrum of the response is
clear, but complicated, as can be seen from Exhibit 2-2.
The resounding answer to this question is "Yes – standards do matter". The enterprise size-
band trend is similar for all sectors. It should be noted that the lower value of the large
companies in the Aerospace for medium and large enterprises is marked in red in the table.
The number of observation points is low and this means that the associated error margins,
and confidence intervals widen. Nonetheless, apart from these two elements the rest of the
graphic is meaningful and can be considered as accurate.
The fundamental measure of the value of standards is the number of implementations or the
number of enterprise strategies that explicitly include standards as a necessary critical
element. Three quarters of all of the large enterprises across the companies confirm that
they take standards into account, whereas the figure is much lower at between 20-30% for
micro companies, with small and medium companies taking up intermediate positions in
each of the sectors.
48
The exclusion of the tourism sector from the standards questions was mistakenly not taken into account in
compiling some of the tables in the e-Business W@tch publication "A Pocketbook of e-Business Indicators
2005". The corrected figures are contained in this report. Additional differences, if any, can be attributed to the
exclusion of "Don’t Knows" from the analysis for this report.
e-Business Interoperability
39 September 2005
Full assessment of these results would require a panel of sector and standards experts who
can compare their sectors with deep knowledge of the parameters that contribute to choice
of standards. This could be a very simple task, but there is a distinct benefit for all from
completing the business and technology views and documenting the findings for use by all
companies within the sector and across sectors.
Exhibit 2-2: Do standards influence decisions on new products, services or processes?
0
10
20
30
40
50
60
70
80
90
100
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s3-small s2-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
Size-
band
Avg
s1-micro
19.3
(187)
20.4
(181)
32.8
(180)
31.8
(170)
33.2
(187)
21.4
(173)
22.6
(84)
20.0
(180)
59.3
(189)
30
(1531)
s3-small
26.3
(133)
29.0
(138)
48.6
(140)
41.6
(154)
44.4
(142)
42.0
(143)
35.0
(40)
28.1
(139)
71.1
(142)
41
(1171)
s2-medium
57.8
(161)
43.7
(158)
60.5
(157)
8.2
(129)
59.5
(163)
62.7
(153)
66.7
(18)
44.0
(159)
74.7
(166)
59
(1264)
s4-large
80.0
(60)
59.3
(54)
75.5
(49)
71.1
(45)
76.8
(56)
76.5
(68)
45.5
(11)
67.9
(53)
86.5
(52)
74
(448)
SectorAvg
39
(541)
34
(531)
49
(526)
48
(498)
48
(548)
46
(537)
33
(153)
34
(531)
70
(549)
46
(4414)
Graphic: Percentage of firms by size-band within sector that take technology or data standards into account in new product,
service or process development. In % of firms. Base: All firms, excluding Tourism sector and Don’t Knows.
Table cells : Percentage of firms within enterprise size-band, or column/row totals, and N data in round brackets.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 40
2.3.1 I s i nt r a-sec t or al i nt er oper abi l i t y c r i t i c al f or e-busi ness?
Again the answers are generally a resounding yes. Typically 40% of large firms across all
sectors believe that intra-sectoral standards are critical for them to do business. At the same
time there are possibly up to 60% of large companies that do not consider these standards to
be essential. The picture is even more pronounced when micro companies are examined.
The lowest micro company data figure is reported by the food sector. The percentage
considering e-business standards as critical for success is less than 10%. The responses
received relate to the demand for information on standards and to a lesser extent for
participation and access to influencing the standards process.
Exhibit 2-3: Is interoperability within your sector critical for your e-business?
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
Size-
band
Avg
s1-micro
8.3
(60)
25.3
(75)
27.2
(103)
14.8
(88)
25.0
(76)
18.3
(71)
13.7
(51)
12.2
(74)
32.7
(165)
21.9
(763)
s3-small
26.4
(53)
23.9
(67)
31.5
(89)
20.0
(95)
20.3
(79)
22.5
(80)
20.8
(24)
15.3
(59)
36.4
(129)
25.5
(675)
s2-medium
36.8
(95)
27.7
(94)
35.2
(125)
34.4
(90)
31.5
(108)
34.2
(111)
46.2
(13)
16.5
(97)
37.4
(139)
32.3
(872)
s4-large
55.3
(38)
40.0
(35)
40.9
(44)
38.9
(36)
39.0
(41)
51.0
(49)
40.0
(5)
37.8
(37)
46.7
(45)
43.9
(330)
SectorAvg
30.5
(246)
27.7
(271)
32.7
(361)
24.9
(309)
28.0
(304)
30.2
(311)
21.5
(93)
18.0
(267)
36.4
(478)
29.0
(2640)
Base: All firms, excluding Tourism sector. Analysis excludes Don’t Knows and NULLS (current best case scenario)
Graphic: Percentage of firms by size-band within sector excluding Don’t Knows and NULLs.
Table cells : Percentage of firms by size-band within sector, or column/row totals, and N data in round brackets.
To be read as “…% of enterprises excluding Don’t Knows and NULLs, in the … size-band in the … sector, consider that
interoperability is critical for e-business between their enterprise and other enterprises IN the same sector.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
41 September 2005
2.3.2 I s i nt er -sec t or al i nt er oper abi l i t y c r i t i c al f or e-busi ness?
First observation is that it is the large companies that have the biggest requirements for inter-
sector interoperability. In some cases (pharmaceutical, automotive, and aeronautics) the
expectations of the medium sized companies are seen to soar way beyond those of the other
enterprise size classes. As previously observed the table data highlighted in red indicates
that little confidence should be placed on those particular enterprise size-band data values
for Aerospace.
A comparative analysis of the responses regarding inter- and intra-sector indicates a greater
demand will be met for each of the 9 sectors, by focusing on convergence of standards
within sectors. This is not surprising. Neither on reflection is the higher critical need
expressed by SMEs for cross-sector standards. It is however unlikely without some direct
action that the “tail (small companies) will ever wag the dog (large companies)”.
Exhibit 2-4: Is interoperability with companies in other sectors critical for your e-business?
0
5
10
15
20
25
30
35
40
45
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
Size-
band
Avg
s1-micro
10.2
(59)
23.0
(74)
20.4
(103)
12.6
(87)
16.0
(75)
13.2
(68)
7.8
(51)
2.7
(73)
24.7
(162)
16.2
(752)
s3-small
25.0
(52)
13.6
(66)
29.2
(89)
14.6
(96)
12.7
(79)
17.9
(78)
4.0
(25)
13.1
(61)
28.1
(128)
19.4
(674)
s2-medium
25.3
(95)
19.6
(92)
27.4
(124)
26.7
(90)
19.6
(107)
29.6
(108)
23.1
(13)
13.5
(96)
30.4
(138)
24.4
(863)
s4-large
42.1
(38)
33.3
(36)
34.1
(44)
17.1
(35)
37.5
(40)
22.4
(49)
20.0
(5)
25.0
(36)
31.8
(44)
30.3
(327)
SectorAvg
24.2
(244)
20.9
(268)
26.7
(360)
17.9
(308)
19.3
(301)
21.8
(303)
9.6
(94)
12.0
(266)
28.0
(472)
21.5
(2616)
Base: All firms, excluding Tourism sector. Analysis excludes Don’t Knows and NULLS (current best case scenario)
Graphic: Percentage of firms by size-band within sector excluding Don’t Knows and NULLs.
Table cells : Percentage of firms by size-band within sector, or column/row totals, and N data in round brackets.
To be read as "…% of enterprises excluding Don’t Knows and NULLs, in the ... size-band in the ... sector, consider that
interoperability is critical for e business between their enterprise and other enterprises IN the same sector.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 42
Key messages from Section 2.3
Common points in all discussions on the responses:
Looking at the data points for each sector, and the average values per sector
and per enterprise size class for the entire sample, a set of questions can be
addressed to many of the charts:
· What is the appropriate target, and why should it be so, for the measured
value per enterprise size-band?
· What circumstances will yield a basically identical percentage across all
enterprise size-bands in a given sector (as shown most nearly for instance
in the IT services sector)?
The answer to both questions is most likely to be strongly sector structure
dependent. In that case, it is useful to understand the underlying driving forces
and so help SMEs to set their own goals with a clear sector specific
understanding of what standards must be taken into account in their work.
Such detailed sector level answers, to the range of the questions asked, would
produce a set of powerful sector specific standards roadmaps, which
depending on how the roadmap construction and maintenance processes are
conducted could become a valuable resource for all enterprises in the sector.
Such roadmaps could also identify whether there were a characteristic
signature in terms of the relative values of the average responses across
sectors per standard area. The roadmap could also be the basis for a cross-
sectoral review of common standards and potential for increased
harmonisation between sectors.
Taken in conjunction with other additional questions, such as those in the
following sections, the roadmaps would acquire several dimensions which can
be drilled down to get an overview on common interoperability practices and
targets for all layers and levels of interoperability.
2.4 Current usage of EDI and plans for XML standards
There is nothing particularly exceptional about the figures shown Exhibits 2-5 and 2-6. Large
companies dominate EDI usage, especially in the Food and Automotive sectors. The IT
services sector is low in reported EDI usage, but the leader by far in the reported use of
XML-based standards for EDI. The interesting question is what should the values be for a
given enterprise size-band in a given sector (e.g. what values do the leaders in each of the
size-bands achieve or aim to achieve?). In addition what is the rationale for the projections
and how can the ideal figures be achieved? What collaboration is required to facilitate and
accelerate the transition to XML?
A comparison of Exhibits 2-5 and 2-6 indicate that sectors with highest implementation of
EDI (Food and Automotive) also have the lowest implementation level of XML. Construction
is low on both categories.
e-Business Interoperability
43 September 2005
Exhibit 2-5: Use of EDI-based standards by enterprise size-band per sector
0
10
20
30
40
50
60
70
80
Food Textile Publish Pharma Machine Auto Aero Constr ITServ
s1-micro s2-small s3-medium s4-large
Base. All enterprises, excluding Tourism and Don’t Knows (N=413,454,468,409,487,420,139,492,464)
Source: e-Business W@tch (e-Business Survey 2005)
Exhibit 2-6: Use of XML-based standards by enterprise size-band per sector
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Base. All enterprises, excluding Tourism and Don’t Knows (N=413,454,468,409,487,420,139,492,464)
Source: e-Business W@tch (e-Business Survey 2005)
A further series of Exhibits 2-7 to 2-10 provides a separate set of analyses of the percentage
of types of EDI used by enterprise size-band and by sector. The tables are easy to read but
are relatively unexceptional in the absence of the micro-level detail on the sectors and
countries that would explain the figures. Having a view on the rate at which companies were
planning to move from EDI to XML would be more interesting. This is provided in the
following sub-section.
e-Business Interoperability
September 2005 44
Exhibit 2-7: Use of EDI and types of EDI used per enterprise size-band
Percentage usage by each type of EDI
Horizontal (three) rows sum to 100 (N) data in last row
% of Enterprise
Size-band …
(N) Use EDI
Of this size-band
...% use Standard
EDI
Of this size-band
...% use Internet-
based EDI
Of this size-band
...% use both
standard and
Internet-based EDI
Micro (1498) 2.9 22 37 41
Small (1122) 8.0 29 39 32
Medium (1230) 18.6 33 34 33
Large (440) 41.4 39 25 36
Average per
sampled firm
(4290)
12.7 34 32 34
(173) (164) (177)
Base: All firms, excluding Tourism sector and Don’t Knows. N data in round brackets.
Table cells : Percentage of sampled firms by enterprise size-band that use EDI-standards. Within these the percentage by size-
band that use specific types of EDI-standards.
Source: e-Business W@tch (e-Business Survey 2005)
Exhibit 2-8: Use of EDI and types of EDI used per Enterprise size-band
5
9 10
14
20
15
41
44
40
40
27
36
0%
20%
40%
60%
80%
100%
Standard EDI Internet-based EDI Both
s4-large
s3-medium
s2-small
s1-micro
Base: All firms, excluding Tourism sector and Don’t Knows. N data in round brackets.
Table cells : Percentage of sampled firms by enterprise size-band that use EDI-standards. Within these the percentage by
enterprise size-band that use specific types of EDI-standards.
Source: e-Business W@tch (e-Business Survey 2005)
Of which …
Enterprise
Size-Band
%Firms that use
EDI-standards
%Firms that use
Standard EDI
%Firms that use
Internet-based
EDI
%Firms that use both
standard and Internet
based EDI
Micro 7.9 5 9 10
Small 16.5 14 20 15
Medium 42.1 41 44 40
Large 33.5 40 27 36
(N) (544) (173) (164) (177)
e-Business Interoperability
45 September 2005
Exhibit 2-9: Type of EDI use: percentage of each type of EDI per sector
37
40
33 34
26
29
46
43
22
37
29
38
34
31
30
15 21
28
25
31
29
32
43
41
38
36
50
0%
20%
40%
60%
80%
100%
F
o
o
d
T
e
x
t
i
l
e
P
u
b
l
i
s
h
P
h
a
r
m
a
M
a
c
h
i
n
e
A
u
t
o
A
e
r
o
C
o
n
s
t
r
I
T
S
e
r
v
Both
Internet-based EDI
Standard EDI
Base: All firms, excluding Tourism sector and Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005)
Plans for move from EDI to XML standards
Approximately 10% (544) of the survey population indicated they would change from EDI to
XML over the next 12 months. This number was not sufficient to do a meaningful sector
based analysis. Therefore, the statistic presented here refers only to the enterprise size
analysis.
Exhibit 2-10: Intends to replace EDI by XMl within the next 12 months
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
%yes
s1-micro
s2-small
s3-medium
s4-large
Base. Companies that use EDI. Excluding Tourism, NULLs and Don’t Knows The full sample set was 544. Don’t knows by size
class (u,s,m,l) was 5, 11, 30, 22 hence N= 38, 79, 199, 160
To be read as …% of respondents per enterprise size-band … reported that they intended to replace EDI-based solutions for
electronic data interchange with XML based solutions within 12 months.
Source: e-Business W@tch (e-Business Survey 2005
The micro-companies indicated the highest percentage of intention to move from EDI to
XML. This is consistent with the lower running costs, and re-assuring to an extent that such a
large proportion was prepared to make the move. It is possible of course, as there is no
visibility on the sectoral de-composition that the small companies are moving in accordance
with the similar type move indicated by the large companies.
e-Business Interoperability
September 2005 46
2.5 Comparative data between e-Business Surveys 2003 and
2005
It is not usually easy to compile useful comparative data from different surveys. This is also
true for comparisons between the results of the e-Business Surveys 2003 and 2005. The
reasons are clear. The sectors included vary from survey to survey, in line with the policy
areas that are uppermost at the time of design; and also the countries in which the survey is
conducted change from survey to survey. Thus only limited comparability is possible as the
configuration of countries differs by sector. In addition, the questions are not usually all kept
constant. The matters raised depend on the requirements prevalent at the time of design.
However, in keeping with the contention that sectors tend to transcend the national
perspectives in line with the European freedoms of movement and easier cross-country
trading, it was decided to select a question that was common to both surveys and analyse
the data returns for the same sectors in both surveys.
The chosen question, for comparison purposes, was practically identical in both surveys:
Please tell us which of the following standards your company uses. Do you use … (item a-e)
a) EDI-based standards, for example EDIFACT, EANCOM, ANSI X12, or TRADCOM;
b) XML-based standards such as cXML, UBL, RosettaNet, xCBL;
c) the STEP standard for the exchange of product model and design data;
d) Proprietary standards agreed between you and your business partner;
e) Any other technical standards.
The resulting comparative data are presented in Exhibit 2-12.
Moreover, two somewhat related sectors, namely ICT services and IT services were included
in the comparison. Data for 2003 is in % of enterprises per enterprise size-band within
sector. Likewise, data for 2005 is also in % of enterprises per enterprise size-band within the
same or directly related sector. For comparative purposes, both charts include “Don’t Knows”
in the calculations. Data presented represent the arithmetic mean of all countries surveyed in
the sector. As noted in the Exhibit footnote, the countries differed between the two surveys.
The conclusions are striking. Data indicate that there has been a multi-fold increase in the
usage of all types of EDI, and of the other technical standard categories listed, across all
enterprise size-bands. Of course the difference may be attributable, at least in part, to the
change in the basic selection process for firms to be interviewed (the 2005 study was
confined to those companies that used computers). Thus, the 2005 figures would tend to be
elevated over the 2003 data. The variation in the countries surveyed for the same sector in
the different surveys may also have an impact.
However, it is believed that the differences are in fact real and represent a significant
increase in e-business take up within the textile sector.
e-Business Interoperability
47 September 2005
Exhibit 2-11: Comparative data for types of standard used
From e-Business Survey 2005
17.2
9.2
8.7
6.0
1.6
5.1
4.2
14.8
17.0
30.8
6.2
9.2
18.8
13.0
32.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Textile Auto IT Serv
EDI XML STEP Prop Other
From e-Business Survey 2003
6
5
1
2
3
5
9
15
3
5
7
2
20
3 0
0
2
4
6
8
10
12
14
16
18
20
Textile Automotive ICT services
EDI based XML based STEP Proprietary standards Other
Base (2005): all enterprises from the sectors, EU7 (DE, ES, FR, IT, UK, CZ, PL). N=561, 565, 565
Base (2003): all enterprises from the sectors, EU5 (DE, ES; FR, IT, UK). N=501, 501, 501
In % of enterprises by enterprise size-band, including Don’t Knows for comparative purposes.
Source: e-Business W@tch (2003 and 2005)
The main reason for this confidence is the great collaborative development that has been
accomplished during the past few years in Europe by the companies involved in the
CEN/ISSS Workshop TEX-SPIN (TEXtile Supply Chain Integrated Network) which produced
CWA 14948
49
Guidelines for XML/EDITEX messages in the textile/clothing sector. The
ongoing work of the follow-on workshop CEN/ISSS Tex-Weave demonstrates the continued
interest. The TEX-SPIN Workshop was promoted by a European consortium led by Euratex,
the European Apparel and Textile Organisation based in Brussels.
The relative usage per sector of standards in addition to EDI and XML is indicated in Exhibit
2-13. The significant information to notice is that for each sector there is a high percentage
49
CEN/ISSS. CWA 14948. Guidelines for XML/EDITEX messages in the textile/clothing sector.
(http://www.cenorm.be/cenorm/businessdomains/businessdomains/isss/cwa/textilecwa.asp, last accessed
August 23, 2005).
e-Business Interoperability
September 2005 48
use of proprietary and other standards. Taking Other to mean bilateral standards mutually
agreed between partners and Proprietary to mean standards defined for instance by the
major partner, it is evident that there is a huge opportunity for application of a more open
framework. Such a move will increase flexibility of partner agreements and ultimately save on
costs for each of the partners.
Exhibit 2-12: Type(s) of other standards in use, by sector
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
STEP Proprietary Other
Food TextilePublishPharma Machine Auto Aero ConstrIT Serv Avg
EDI-based
22.2
(531)
13.9
(527)
8.4
(511)
16.7
(491)
7.1
(524)
18.8
(517)
9.2
(153)
5.4
(520)
10.1
(516)
12.7
(4290)
XML-based
8.5
(527)
9.4
(524)
17.2
(516)
11.1
(486)
8.6
(524)
6.7
(511)
8.3
(156)
6.1
(522)
35.2
(528)
12.7
(4294)
STEP
1.1
(529)
1.7
(519)
2.5
(517)
2.9
(490)
6.0
(529)
5.7
(512)
7.1
(156)
2.3
(521)
4.7
(516)
3.5
(4289)
Proprietary
14.8
(541)
15.7
(528)
19.9
(522)
16.3
(498)
17.6
(539)
18.2
(527)
21.6
(153)
12.4
(532)
33.3
(522)
18.6
(4362)
Other
5.4
(540)
6.6
(528)
12.5
(520)
9.0
(489)
10.1
(533)
10.0
(519)
12.0
(158)
9.1
(528)
20.5
(517)
10.4
(4332)
Base: All firms, excluding Tourism sector and Don’t Knows.
Graphic: Percentage of firms by sector using STEP, Proprietary or Other technical standards for exchange of electronic data.
Table cells : Percentage of firms within enterprise size-band, or column/row totals, and N data in round brackets.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
49 September 2005
2.6 Perceived standards development/implementation gaps
An important standards policy and strategy related finding, from the e-Business Survey 2005,
is an indication of the level of dissatisfaction shown in Exhibits 2-13 and 2-14 concerning
some vitally important standards areas:
· Systemic business functionality:
o data protection and privacy
o information and information systems security
o identity management and authentication
o digital rights management
· Business transaction functionality
o product/component catalogues and classification
o transaction processing / business messaging
The concerns, reported by enterprise size-band within each sector, may be caused by
inadequate standards, or due to a lack of widespread implementation of existing standards.
The precise cause is not the issue right now. It is sufficient to know that significant levels of
concern have been voiced across all sectors and across all enterprise size-bands. The
variation within sectors across different enterprise size-bands indicates that not all firms see
the issues in the same light. Likewise, the variation between sectors on specific standards
issues indicates that there are differences of perception across sectors on even the most
systemic of fundamental standards needs such as security.
Data in Exhibit 2-13 indicate, in particular, that there are strong reservations about security
and data protection/privacy standards/implementation. These perceived gaps must be
addressed in the same timeframe that new XML standards for trading are being introduced. If
not, or if there is not at least a plan, then the potential benefits from investment in XML will be
stunted. However the picture may not be as bleak as it first seems. Security of the messages
and data protection around the transactions and other personal information can be overlaid
onto ebXML applications, for instance, before these capabilities are introduced.
The levels of dissatisfaction for Digital Rights Management and Identity Management are
also relatively high across all sectors. These are noted and merit a detailed analysis of the
causes for the differences in each sector studied. It is not clear for instance whether the DRM
concerns in the aerospace industry relate to in-flight entertainment or to intellectual property
rights in relation to design elements of the aircraft components. It is recommended that
experts in each sector consider this data and determine to the best of their abilities the root
causes for the reported values.
Once that is done it would be instructive and likely also very productive to pool the views of
each of the sector experts and produce a consolidated cross-sector view of each of the
standards areas examined.
The contrast between these figures per sector to the results from a related question in the e-
Business Survey 2003 (November) is striking. When asked, in 2003, whether they see
obstacles to electronic business stemming from a lack of technical standards a majority
(about 3 in 4 companies) said they did not see any obstacles, leaving less than 20% of firms
perceiving problems and 7% undecided. There were hardly any differences by sector.
Comparing size-bands, the awareness for obstacles was slightly higher among medium
sized and large enterprises than among small firms.
e-Business Interoperability
September 2005 50
Exhibit 2-13: Significant standardisation development or wider implementation is required:
systemic business functionality
Note: The charts below are valid for all sectors except Aerospace. Due to the lower sample sizes, special caution
needs to be exercised in any deductions regarding this analysis by enterprise size-band in the Aerospace sector.
Data Protection or Privacy
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Information and Information Systems Security
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Identity Management and Authentication
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Digital Rights Management
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Base: Companies who take standards into account when developing new products or processes.
To be read … % of firms in the … enterprise size-band within the … sector who report that they take standards into account
when developing new products or process consider that standards for …(specify name of standards area) need to be improved
significantly or implemented widely in order to be able to realise the full success of e-business in that sector.
Responses are expressed in % of firms per enterprise size-band within sector, excluding Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005).
e-Business Interoperability
51 September 2005
Data in Exhibit 2-14 indicate significant levels of concern ranging up to 50% among the
sampled companies, in particular the medium size-band enterprises.
Exhibit 2-14: Significant standardisation development or wider implementation is required:
business transaction functionality
Note: The charts below are valid for all sectors except Aerospace. Due to the lower sample sizes, special caution
needs to be exercised in any deductions regarding this analysis by enterprise size-band in the Aerospace sector.
Product / Component Catalogues & Classes
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Trans Processing & Business Messaging
0
10
20
30
40
50
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
Base: Companies who take standards into account when developing new products or processes.
In % of firms. To be read …% of firms in the … sector who report that they take standards into account when developing new
products or process consider that standards for …(specify name of standards area) need to be improved significantly or
implemented widely in order to be able to realise the full success of e-business in that sector.
Responses are expressed in % of firms per enterprise size-band within sector, excluding Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 52
2.7 Open Source Systems
Responses to the three questions on the current level of adoption of open source
technologies, in the e-Business Survey (2005), indicate a strong uptake of Open Source
Systems. This is perhaps a good indicator for readiness to adopt, for instance, the free
ebXML code available via www.freebXML.org.
Exhibit 2-15: use of Open Source (in % of firms per enterprise size-band)
Database
0
10
20
30
40
50
60
70
80
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
N (Sector) =548, 540, 531,505, 551, 543, 159, 551, 554
Operating System
0
10
20
30
40
50
60
70
80
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
N (Sector) = 552, 549, 563, 514, 555, 546, 161, 555, 559
Browser
0
10
20
30
40
50
60
Food Textile Publish Pharma Machine Auto Aero Constr IT Serv
s1-micro s2-small s3-medium s4-large
N (Sector) = 555, 542, 536, 515, 552, 544, 161, 547, 556
Base: All Companies, excluding Tourism sector.
Sample response (N) per sector varies per standards issue and is shown at the foot of each chart.
Responses are expressed in % of firms per enterprise size-band within sector excluding Don’t Knows.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
53 September 2005
Micro and small enterprises are broadly similar in their implementations rates of open source
operating systems, databases and web browsers. This is not to say that they use such open
tools exclusively. However, it does indicate a relatively strong foothold for this technology.
Medium enterprises trail large enterprises, but only by a relatively narrow margin of around
10 percentage points for each of the three technologies.
2.8 Future via Web Services
The vision of web services is that application software will be developed or assembled from
components which are designed as re-usable services. This vision is in line with the search
for a different business model for software (pay-per-use, utility computing, application
hosting) that large software vendors are leading.
Exhibit 2-16: Future Importance of Web Services to Enterprises by size-band and by sector
0
10
20
30
40
50
60
70
80
90
100
Food Textile Publish Pharma Machine Auto Aero Constr Tourism ITServ
s1-micro s2-small s3-medium s4-large
Food Textile Publish Pharma Machine Auto Aero Constr Tourism ITServ Total
s1-micro
21.8
(165)
27.4
(164)
37.3
(169)
38.6
(153)
28.9
(166)
25.7
(152)
31.3
(80)
25.0
(168)
41.3
(172)
58.2
(182)
34.0
(1571)
s2-small
33.8
(130)
34.1
(123)
47.8
(138)
40.0
(145)
36.2
(127)
32.0
(128)
47.5
(40)
33.1
(136)
39.7
(131)
69.6
(138)
41.2
(1236)
s3-medium
43.4
(152)
46.3
(147)
62.1
(161)
51.9
(129)
51.9
(160)
47.3
(148)
56.3
(16)
37.2
(156)
50.0
(158)
73.2
(168)
51.8
(1395)
s4-large
48.4
(62)
50.0
(52)
63.5
(52)
65.3
(49)
58.5
(53)
61.3
(62)
50.0
(12)
50.9
(55)
55.4
(56)
84.3
(51)
59.1
(504)
(N) = Sample size per enterprise size-band, per sector, excluding Don’t Knows (4706)
Base: All companies, excluding Don’t Knows. N=4706
To be read … % of firms in the … enterprise size-band within the … sector stated that they consider integration of IT
components by means of Web Services will be important for their company.
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 54
Over three years ago in February 2002, at the 2
nd
Annual Diffuse Conference entitled “Will
web-services revolutionize e-commerce” a key objective was to provoke discussion on what
web-services would bring to interoperability in the widest context and how web services will
deliver on promises to transform businesses. At the same time web services were being
promoted and marketed by commercial companies as the “next leap” in software. At the
conference warning bells were sounded.
The presentation on ECIMF (E-Commerce Integration Meta-Framework), developed by a
sub-group of the CEN/ISSS WS on e-commerce, was particularly cautious. Their conclusion
was that use of web services would help to achieve interoperability, but mostly in the lower,
technical syntax levels. For true Plug & Play use, the other interoperability aspects such as
differences in business process specifications, differences in semantics and differences in
business contexts (economic aspects) were considered to be in-adequately addressed.
Today no one will deny that this technology is in its “disillusion phase”. After being hyped by
major vendors – a cycle not uncommon for new technologies – the next expected phase is a
more realistic one of modest but continuous growth.
The evidence from the e-Business W@tch data indicates the beginning of what appears to
be a concerted intention by SMEs to move to web services. Exhibit 2-19 reflects the upbeat,
but time indeterminate, responses received to the question on how important Web Services
will be to their e-business in the future. What is important though is that the intentions to
move to web services will likely be easier when EDI/XML solutions have already been widely
implemented. Thus it is believed that evidence of a concerted effort now to implement
EDI/XML, and specifically ebXML will in time ably assist in meeting the future goal of web
services.
e-Business Interoperability
55 September 2005
2.9 Proposal on a functional view of enterprise size-bands
In his presentation to the Modelling Workshop organised by eBIF, Huemer
50
proposed a
theoretical information model for the types of systems that it is believed are likely to be used
by companies in each of the enterprise size-bands. Exhibit 2-17 outlines the main ideas
behind the proposal: only large and medium companies would have in-house application
developers, and thus the only company types who would be significantly interested in EDI.
Small companies, it was postulated, would prefer to buy COTS (Commercial Off-the-Shelf
Software) for their B2B needs and micro companies would be content to use browser-based
systems. It was considered that this classification is feasible and the data was therefore
mined to see if the tentative conclusions were valid in practice.
Exhibit 2-17: Proposed B2B Functional Classification of Enterprise Size-bands
Size-Band B2B functionality commonly used by Enterprises within the size-band
Large
Enterprises
· run business applications
· develop software or customise software, i.e. control their interfaces
· more or less able to participate in B2B
Medium and
some Small
Enterprises
· run business applications
· buy (or rent, or free) off-the-shelf software
· need Off-the-Shelf Software with B2B Functionality
Micro and
some Small
Enterprises
· do NOT run business applications
· act similar to consumers, and are satisfied with “browser-based“ e-commerce
· micro- and some small enterprises need Commercial Off-The-Shelf Software (COTS) that
are a combination of ERP systems and B2B software for communication
In keeping with this scenario, three specific conditions are required to be simultaneously
satisfied:
· ERP vendors must implement common B2B scenarios in their products;
· business processes must be unambiguously defined, i.e. it is not sufficient to merely
have ambiguous business documents, even those that may work satisfactorily in
current manual processes;
· Business processes must be defined in their business context.
Analysis of the proposition
The following Exhibits 2-18, 2-19 and 2-20 present the compiled information on types of
systems used by type of enterprise. Based on the data in the tables, it is clear for instance
from Exhibits 2-18, 2-19 that while micro-enterprises have the lowest level of use of in-house
software, the difference between the enterprise size-bands overall is not that significant in
that or in the other IT solutions used for procurement/sourcing or in marketing/sales. Thus at
the current level of available data there is not sufficient evidence to support the proposition
that there is a clean cut between the choices for software approaches and products between
the different enterprise size-bands. Once there are readily available COTS products with
inbuilt standardised (for instance ebXML capabilities) it is likely that these will be in high
demand by all enterprise size-bands and assuming the marketing price is well set will be
particularly attractive for the micro and small enterprises.
50
Huemer, Christian (2005) and Brigit Hofreiter. Introduction to UN/CEFACT modelling methodology.
Presentation at eBIF Modelling Seminar, Brussels, 1 July 2005. (ftp.cenorn.be/public/ebif, last accessed
August 23, 2005)
e-Business Interoperability
September 2005 56
The main argument however on the relative adoption of specific IT solutions is confirmed by
Exhibit 2-8 Use of EDI and types of EDI used per enterprise-size band and in Exhibit 2-20
These clearly show that in general micro and small enterprises trail medium and large
enterprises in their adoption of EDI and specific IT solutions for marketing and sales
operations. There is clearly a large potential market and opportunity here that needs to be
addressed in order to achieve the increased industry competitiveness demanded in order to
meet the Lisbon Agenda.
Exhibit 2-18: IT Solutions used for sourcing or procurement
Packaged
s/w
In-House
s/w
Asps
Solutions
Suppliers’
Solutions
e-marketplaces,
trading networks
%firms N %firms N %firms N %firms N %firms N
s1-micro 69.9 146 51.7 147 33.1 145 36.6 142 26.9 145
s2-small 65.4 156 64.6 158 33.8 151 39.2 153 25.0 156
s3-medium 75.9 303 70.1 304 34.3 297 28.2 298 22.5 298
s4-large 70.3 155 71.8 156 34.9 152 39.2 148 29.5 149
Average 71.4 760 65.8 765 34.1 745 34.3 741 25.3 748
Base data: companies who support sourcing or procurement processes by specific IT solutions. The number of companies in
each enterprise size-band is shown under columns marked N. To be read as “of those firms supporting their sourcing or
procurement processes by specific IT solutions …% of the firms in enterprise size-band … use IT solutions of type …
COTS: Commercial off-the-shelf software; a standard software package, implemented in the company
IH S/W: In-house developed software; customised company-specific IT solutions
ASP: Software services provided by ASPs, i.e. Application Service Providers
SSS : Functionalities offered via sales solutions of suppliers
e-Mark : Functionalities offered on e-marketplaces or trading networks
Source: e-Business W@tch (e-Business Survey 2005)
Exhibit 2-19: IT Solutions used for marketing or sales processes
Packaged
s/w
In-House
s/w
ASPs
Suppliers’
Solutions
e-markets
%firms N %firms N %firms N %firms N %firms N
s1-micro 68.3 142 53.9 141 27.3 132 16.7 132 24.6 138
s2-small 73.6 182 61.8 186 35.7 182 17.7 175 21.1 180
s3-medium 67.9 318 69.9 322 28.7 317 19.0 311 18.2 314
s4-large 66.4 140 71.6 141 27.7 137 30.1 133 21.7 138
FirmAverage 69.1 782 65.4 790 29.9 768 20.2 751 20.6 770
Base data: companies who support marketing or sales processes by specific IT solutions. The number of companies in each
enterprise size-band is shown under columns marked N. To be read as “of those firms supporting their marketing or sales
processes by specific IT solutions …% of the firms in enterprise size-band … use IT solutions of type …
COTS: Commercial off-the-shelf software; a standard software package, implemented in the company
IH S/W: In-house developed software; customised company-specific IT solutions
ASP: Software services provided by ASPs, i.e. Application Service Providers
SSS : Functionalities offered via sales solutions of suppliers
e-Mark : Functionalities offered on e-marketplaces or trading networks
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
57 September 2005
Exhibit 2-20: Enterprises, by enterprise size-band, supporting marketing or sales processes by
specific IT Solutions
Companies currently supporting marketing or sales processes by specific IT Solutions
Food Textile Publish Pharma Machine Auto Aero Constr Tourism IT Serv AvgTotal
s1-micro 5.8 3.7 6.8 7.9 4.7 5.1 9.4 3.7 10.1 23.8 8.1
s2-small 7.0 9.8 17.9 17.8 8.4 8.2 5.0 3.5 18.1 37.9 14.0
s3-medium 17.0 12.4 29.1 26.2 20.6 19.9 25.0 11.0 23.5 40.6 22.2
s4-large 22.6 20.4 51.1 29.2 20.0 22.4 7.7 21.4 30.4 52.3 28.3
FirmAverage 11.3 9.6 20.3 17.5 11.9 12.3 10.1 7.6 18.2 34.9 15.7
Base data: companies who support marketing or sales processes by specific IT solutions. To be read as “of those firms
supporting their marketing or sales processes by specific IT solutions …% of the firms in enterprise size-band … use IT
solutions of type …
Source: e-Business W@tch (e-Business Survey 2005)
Summary conclusions for Chapter 2
Throughout Chapter 2, the enterprise size-band views show that take-up of
various standards by micro and small companies generally trails the
medium and large companies in terms of the percentage number of firms in
their respective size-bands that have implemented or replied in the affirmative
to the various issues.
The main observations drawn from the chapter are that an analysis of
interoperability and standards by enterprise size class within sector is possible
and has been achieved. In order to extract and infer useful business guidance
based on the analysis, a sector roadmap of interoperability framework
standards should be compiled by a representative multi-disciplinary team of
business experts. The individual sectoral roadmaps can then be mapped into a
comparative cross-sectoral roadmap of the standards in use / to be used;
While there is no exact figure on the appropriate target level that SMEs should
establish, for instance, for EDI/XML adoption it could be suggested that a target
equal to or higher than the best of class companies in that enterprise size-band
would be appropriate.
e-Business Interoperability
September 2005 58
3 National Interoperability Initiatives
The need for a sectoral as opposed to a firm level approach to interoperability is clearly
enunciated in the 1998 paper by Laopodis and others
51
. It states:
to modernize industry necessitates a prudent approach …to proceed promote
collaborative-approaches per sector and cross-sector in areas where critical
mass of interested stakeholders can be formed, and introduce interoperability
through standardized open solutions built on consensus and which can
therefore co-exist in a competitive environment.
The national interoperability initiatives described in the following two sections have adopted
this prescription. Each of the descriptions provides a clear example of good practice and val-
uable insights into how effective PPP (public private partnership) can be in these areas. Both
describe national e-business interoperability initiatives. The first is drawn from recent devel-
opments in Luxembourg, the second from equally recent and ongoing initiatives in Australia.
3.1 Case study on Construction (CRP Henri Tudor,
Luxembourg)
Construction projects are increasingly being managed in a virtual collaborative environment.
More so than ever before, there is an increasing business need, during the entire life cycle of
a construction project and its subsequent usage, for architects, engineers, construction and
other AEC (Architecture, Engineering, Construction) partners to share and mutually update
information on products and services. According to the multi-part CEN/ISSS European
eConstruction Framework
52
agreed in December 2003
the eConstruction future is essentially towards model based and object
oriented
53
project/company/market information management and sharing via
open standards (IAI-IFC, ISO-12006-3, bcXML, CEN/ISSS eConstruction)
over the web (Semantic Web, Web Services)
Current information on the level of ICT adoption and e-business activity in 2005 is contained
in the companion volumes in this series of e-Business W@tch reports. See in particular,
Electronic Business in the Construction Sector (2005 Special Report No. 08-I and No. II) for
specific conclusions, outlook and implications for the industry and policy.
CRTI-B is helping to achieve the high level of business interoperability needed between large
and small companies within the building sector in Luxembourg. Their specific approach is
described in the following case study. Although the objectives and content issues are
directed specifically at the AEC environment the networking and communications strategies
adopted are in many cases sector-independent. Many of the same critical factors arise in
considering the establishment of a network of SMEs and the mechanisms for creation and
consensus on an interoperability framework in other sectors. Accounting for some specifics
characteristic of the construction industry, the lessons presented have been generalised in
order to be directly useful to any national interoperability project addressing similar
approaches in other sectors.
51
Laopodis, V., Conte, A., and Eleftheriadou, I. (1998). A methodology for introducing interoperability in
industrial sectoral applications of electronic commerce
52
CEN/ISSS. CWA 14946: European eConstruction Framework (EeF) - Context and Scope for “eConstruction”.
(March 2004)
53
Covering data and functionality aspects in an integrated way.
e-Business Interoperability
59 September 2005
CASE STUDY: CRTI-B (CRP HENRI TUDOR, LUXEMBOURG)
Abstract
The study outlines the processes by which CRTI-B, a Department of the Public Research
Centre Henri Tudor, established and managed a formal national e-strategy via a
representative network of construction sector stakeholders. It outlines how this
voluntary network developed, adopted and integrated an agreed common national
interoperability framework for e-construction, Build-IT, into everyday successful usage.
The lessons for national and regional interoperability initiatives are identified and
summarised together with generic guidelines on how to implement similar platforms
which can contribute to specific added-value business practices. The generic
conclusions drawn from this experience are being applied to other sectors within
Luxembourg.
Case Characteristics
Full name of the company Centre de Recherche Public Henri Tudor
Location of the company Luxembourg
Year of foundation 1987
Company size (no. of employees) large (250+)
Turnover in last financial year € 19.5M
Primary customers SMEs
URLhttp://www.tudor.lu/
E-Business Focus
Quality and Business performance äää
Public support for e-Business äää
Co-operation for interoperability äää
Interoperability Standards ää
ä = some relevance / in implementation stage; ää = important / used in day-to-day business;
äää = very important / critical business function
Background
The Centre de Recherche Public Henri Tudor is the national research, development
and innovation centre responsible for ensuring increased experimentation, use and
adoption of the most promising ICT applications by private companies (mostly SMEs)
and public sectors in Luxembourg. The members (regulation authorities, national
federations of designers, industry, craftsmen, etc.) of the Luxembourg CRTI-B (Centre
de Ressources des Technologies de l’Information pour le Bâtiment) are dedicated to
enhancing national construction and building industry competitiveness.
The construction industry
The building trade is, on the one hand, a mature industry characterised by high
professional skills in architecture, design, construction, aesthetics and the relevant
legal aspects required for land contracts and development approvals. Very hetero-
geneous project teams have learned over time how to work to tight deadlines and
interlinked inter-dependent schedules in order to deliver projects to the specifications
required, on time and within budget. On the other hand, the growing market pressures
for more housing and institutional building programs, together with higher expectations
from customers and increasingly stringent necessary environmental constraints, has
ensured that it is no longer sufficient to adopt a “business as usual” approach.
e-Business Interoperability
September 2005 60
Nonetheless, despite a large usage of specific software (CAD, planning, monitoring),
there is a very low usage of cross-trade electronic exchanges (e-procurement or
collaboration platforms) within the construction industry – and not only in Luxembourg.
This picture is consistent with the results from the e-Business W@tch 2005 survey
which indicates that the construction industry has the lowest expressed critical
business need for interoperability within its own sector (6.5% of construction firms
using computers) and for interoperability with firms outside the sector (5.2% of
construction firms using computers). Pro-rata these figures also indicate that the
maturity of e-business in the construction industry may take longer to achieve than in
other sectors. In this respect the schedule for interoperability in the construction sector
adopted by CRTI-B for its Build-IT initiative, as shown in Exhibit 3-1 below, is realistic.
Exhibit 3-1: Build-IT Project Schedule
However, the primary reason for the schedule edging out to 2008 is that significant
change takes time to be socialised, i.e. accepted and widely implemented. Notwith-
standing specific requirements that exist and may emerge for modifications in applic-
able regulation (e.g. e-procurement, authentication) or in technology norms, the adopt-
ion of interoperable e-business in construction is significantly gated by sociological
factors.
The strategic objectives
The primary goal of Build-IT is to enhance the competitiveness and the quality of the
production process in the building trade by the usage of ICT. This goal is served by
targeted strategic initiatives as outlined in the following two sections. These initiatives
involved multi-competence teams organised in thematic workgroups.
e-Business activities
Several early initiatives established a high level of openness and cooperation. For
example, the first activities related to the production of national paper-based norms for
mutual contractual activities between stakeholders required little need for CRP Henri
Tudor intervention and only low levels of interaction among the stakeholders. By the
end of 2002, the CRP and all of the stakeholders had together defined and agreed an
ICT innovation strategy, which was an impressive achievement within that narrow time
frame. This section outlines each of the major steps through which this was accompl-
ished and the challenges that had to be addressed and overcome along the way:
e-Business Interoperability
61 September 2005
· The approach started by understanding the need to educate the designers,
constructors and craftsmen to enable them to benefit from recognising and
adopting the appropriate interoperability standard, and thereby, realise the
benefits generated from ICT opportunities;
· The first socialisation of construction professionals to ICT usage and
experimentation with an electronic interchange interoperability platform was
accomplished in 2001 with the assistance of the architects’ national
representative body. This generic platform (Forum Altavista) for improved e-
collaboration between professionals has since been customised and
commercialised for the construction sector by a start-up (www.forum-
network.com) located at the CRP start-up incubator (www.technoport.lu);
· An early decision was made to adopt a formal methodology (CASSIS:
www.cassis.lu), which enabled all to participate equally in defining the
e-construction IT strategy and particularly in the development of e-procurement
in public building projects;
· An internet portal (www.crtib.lu) was created and dedicated explicitly to the
sector which supplies professionals with information about standards (tendering
and procurement) and which also supports asynchronous electronic
collaboration within the working groups.
e-Construction Standards
In compliance with the e-strategy, the national Build-IT project was designed with a
major objective: to increase the use of e-business in the sector and at same time to
ensure international interoperability by adoption of a standardized digital plan (Industry
Foundation Classes (IFC) standard and Building Information Model Philosophy). This
initiative had the following intrinsic characteristics:
· The IFC created by the International Alliance for Interoperability (www.iai-
international.org) were adopted unanimously by all stakeholders;
· A series of information events with specialists and software editors informed all
concerned about the IFC standard;
· Some specific studies and R&D projects were also undertaken:
· A longitudinal study was conducted to identify and quantify the real needs;
· Co-ordination software was developed to meet the needs identified;
· A special project was used to initiate early positive movement within the
sector;
· Pilot projects were conducted in the chosen application area to validate and
demonstrate the benefits of ICT.
Results realised and lessons learned
In 2002, the Luxembourg building sector comprised some 400 enterprises employing
12,000 workers, and producing 7% of Luxemburg’s GDP
54
. The successful
management of the Build-IT processes has accelerated the sustained learning required
for adoption of IFC classes by these Luxembourg enterprises. See Exhibit 3-2 IFC
Interoperability Framework for a schematic overview of the linked capabilities which
serve the specific needs of each stakeholder.
54
http://www.eiro.eurofound.eu.int/2002/10/feature/lu0210102f.html, last accessed August 23, 2005.
e-Business Interoperability
September 2005 62
Exhibit 3-2: IFC Interoperability Framework
Proof of success for e-construction
The mobilisation and meetings have specific action oriented objectives and
demonstrable results. Influential stakeholders receive and share information and, in
turn, implement knowledge and innovation processes which improve the quality and
level of formalisation of the sectoral e-governance and business interoperability
strategies. Since the establishment of the first working groups in 1991, active
participation is consistent and of high quality. The range and scope of the initiatives
within the building sector has also increased:
· over 60 different stakeholders are active across 7 on-going working groups and
met no less than 23 times during 2004;
· 77 stakeholders received advanced information and training on IFC standards
in the first six months of 2005. This gives the respective stakeholders the
knowledge, confidence and power to experiment and learn by doing;
· Not all ICT innovation initiatives need direct facilitated intervention. At any given
time, CRTI-B initiatives are directly supporting e-business activities in about 10
public or private organisations.
Lessons learned
BuildIT is designed to meet, amongst others, the requirements of public building
projects and related administrative processes. As such it is explicitly based on
established sectoral standards and specifications. Nonetheless, at a generic level the
overall approach is applicable to practically any sector. All comprehensive projects of
that nature must be designed to emphasise and take fully into account the sociological
aspects of the interactions, and the change management structures which are needed
to support the individuals and their respective expert roles vis-à-vis the network
organisation and their own company goals.
· The change process begins with a mobilisation of competencies in which
partners in a given sector take an active part in establishing learning groups and
working projects. For this to be effective, a formal nationally defined e-strategy
agreed by all the sectoral stakeholder representatives is the first priority. As
observed by Jean-Pol Michel, Directeur CITI/CRP “an agreed formal e-strategy
is a major asset at the political and social levels. The public transparency of the
strategy allows each actor to position their own goals within the ‘consortium’
e-Business Interoperability
63 September 2005
ones. Without this transparent trust baseline, a technical framework alone would
be a poor asset”;
· Establishing and reinforcing trust and confidence between the involved
stakeholders, and a sense of partnership in a common cause, is a pre-requisite.
In-person discussion must be promoted by bringing, at least initially, all
stakeholders (where possible) around the same table. The respective roles
must be clear and the skills and needs they each bring to the table must be
mutually understood. Within a given sector, at minimum it is essential to have
as core participants a neutral research centre offering skill sets as follows:
- coordination, standard survey, ICT expertise, connections with other
research institutes in Europe, as well as all of the relevant professional
organisations;
· Change and knowledge processes for interoperability are as important as the
end-result. Change is a continuous process. Early experimentation and
implementations at all stages are required to establish momentum and technical
electronic interchange platforms for early adopters. These early adopters need
to be well supported as they are potential best sponsors for change. At every
level, but particularly at the assessment and architectural level, these early pilot
successes provide good challenges and establish a strong fellowship and
esprit-de-corps. They also demonstrate the feasibility of addressing more
strategic and longer term technical and business challenges.
· Sustaining long term activities, based on a clear strategy agreed between the
stakeholders active in the sector, is critical in order to be able to adjust and lead
the evolution of the sector. This should be managed in waves of change e.g. a
first strategy was defined at the creation of the CRTI-B in 1990, and a second e-
strategy was defined in 2002 in order to renew the ‘e-ambition’ of the CRTI-B
network.
· The working processes and national norms for contractual activities must be
open to continuous improvement. Ideally this delicate balance of maturation and
renewal will be ensured through formal working groups. This adaptability is an
important semantic-level asset of the framework, as otherwise the norms in
practice might ultimately constrain the interpretation of business activities and
business-related objects. It is also a good asset from the cultural point of view. It
will be easier to promote an interoperability framework where cooperation is
the common way of work and where terms and definitions are formally shared
between actors. A good maturity at the semantic level will benefit both the
technical level (derivation of technical requirements, adoption of technical
standards for ICT common tools) and the business level (cooperative change of
business practices)
· Any interoperability framework must be dynamic. Networked knowledge and
innovation management processes must also be systematically deployed in
order to improve the “e-knowledge and e-innovation of the sectoral
stakeholders”. This can be achieved by means of a business and technology
watch function, coupled with shared awareness events such as meetings,
demonstrations, training, pilot projects, and celebrations of success.
e-Business Interoperability
September 2005 64
Additional Generic Guidelines
Technical, semantic and business process aspects are important but a common
business focus coupled with strong political leadership and social network
management take precedence. Speaking on the goal of a standardised digital building
plan for e-construction, Jean-Pol Michel noted that:
“From our experience, technical issues do not mobilise the good actors,
neither does the question of interoperability. Only added-value business
opportunities ensure strong mobilisation. So even if interoperability is our goal,
the strategy has to focus on ICT applications that demonstrate clear
advantage. For example, in the tourism sector, we are addressing an
attractive and non-critical ICT application (geo-localised information system)
with expectations for a clear and direct return on the investments for all.
Consequently, each stakeholder is mobilized on this client oriented added-
value service. Resolution of the interoperability, semantic and technical issues
will come after.”
To emphasise the importance of this point Jean-Pol Michel continued:
“The ICT adoption and the related interoperability issue are mainly a change
issue on the business. We have to address this change management issue
rather than merely focus on the technical or semantic issues. For example, in
order to deploy the national electronic marketplace for the training offer in
Luxembourg, we do not only propose an interchange electronic standard but
we have first studied the changes required in the business processes in order
to publish the new electronic course database and have also proposed
dedicated tools with which to effectively address this business process
change”.
Given the construction industry structure in Luxembourg, it is clear that SMEs, as a
significant group of the primary stakeholders, are critical to the change management
processes. However, it is generally accepted that neither they nor their federations can
maintain sufficient internal staff or pay for external consultants to access the necessary
competences required for cross-sector collaboration on e-standards and inter-
operability. In this context, the neutral role of a public body (such as CRTI-B performed
in e-Construction sector) is essential for informed consensus and assured global
interoperability. At the simplest level, this role must be structured to ensure that
important issues are adequately discussed under a neutral chairman and with all
required information (where possible) immediately to hand so that the implications are
understood prior to decision by the partners.
In a technology-rich and changing environment the public body therefore requires
significant current multidisciplinary competences in the areas of change management,
business process modelling, technology developments and semantics in order to
manage and optimise the knowledge process. Only when this is the case can the
public body support the large variety of activities required to address the social, political
and cultural issues that can otherwise and inevitably block the path to sustained
successful change management and technology adoption.
Conclusion
The CRP Henri Tudor Innovation Platform (IPF) is applied in the building and other
sectors, such as healthcare, training, and ICT services. It has, thus, resulted in a
national Luxembourg counterpart to the European Technology Platform (ETP) which is
e-Business Interoperability
65 September 2005
applicable to e-business developments and realisation of associated interoperability in
–practically- any business sector.
For similar success elsewhere, such networked organisations should be based on:
· an agreed sector-specific national objective;
· a well managed action plan; and,
· an expert network mobilising multi-disciplinary competencies with
representatives from each of the major stakeholders (e.g. users, suppliers,
regulators, researchers, trainers).
Essential support infrastructure will include an appropriate portfolio of R&D, training,
conferences, workgroups, pilot experiments, and formal interoperability certification,
coupled with active measurement and tracking of specific impact indicators related to
the national goals.
References and acknowledgements
This case study was compiled by Henry J. F. Ryan, Lios Geal Consultants, on behalf of the e-
Business W@tch.
References:
· Interviews with Jean-Pol Michel, Directeur du Centre d’Innovation pour les
Technologies de l’Information (CITI), Centre de Recherche Public Henri Tudor, and
email inputs from Damien Hanser, CRP Henri Tudor (CITI), in July 2005.
· Desk research and various documents on Build-IT authored by Jean-Pol Michel, Michel
Brachmond, Damien Hanser, Anne Rousseau and others.
Key messages from Section 3.1
The CRP HenriTudor BuildIT initiative and sectoral support mechanism has
successfully increased SME awareness and compatible e-business
implementation, at a particular sectoral level.
The same approach is readily applicable to other sectors. Similar sector-led
initiatives in other member states in the same or different sectors, ideally led by
respected neutral organisations equivalent to CRP Henri Tudor, are
recommended as a positive way to accelerate the pre-competitive business and
technology agreements required for effective national and regional
implementation of existing and emerging sectoral e-business standards and
guidelines.
e-Business Interoperability
September 2005 66
3.2 The Story of BizDex (Standards Australia)
The BizDex Mission is to be a trusted and independent, not-for-profit, consortia of
government and recognized standards bodies, committed to B2B standards simplification,
partnering with private enterprise to deliver low cost, scaleable, B2B interoperability to all
Australian businesses
55
.
Bizdex is a public-private partnership initiative which has been successfully applied to e-
business in the wheat production sector. The BizDex repository of integration schema and
BizLink connector may be used by any community to reduce integration setup costs –
particularly for small businesses. The concepts are equally applicable to establishing
business links within and between different sectors and service areas including Energy,
Health, Banking, Automotive, Retail, Steel, Human Resources, Utilities, Agriculture.
Australia’s sectoral and market-led development of B2B e-business has been actively led
and supported by a national PPP (public private partnership) program established at the
initiative of the former National Office of the Information Economy (NOIE). As facilitator of the
technical and business collaboration required to increase e-business uptake, NOIE convened
an Interoperability Forum in April 2002. This brought together key business stakeholders to
assess the development of e-business and to identify ways to enhance existing government
and industry initiatives aimed at increasing the level of e-business interoperability. Over 70
organisations from the standards, vendor, service provider, industry and government end-
user communities attended. Following the forum, the NOIE partnered with Standards
Australia to create BizDex - a framework to enable SMEs and large enterprises to readily,
and at low cost, engage with trading partners through B2B.
The background to this innovative approach is described in a 2001 report
56
The main driver for e-commerce to reach its full potential will be companies
collaborating to develop whole-of-industry solutions and deliver shared benefits. To
achieve this, companies will need to share their understanding of business
information and workflow processes, and agree on how they can best automate their
interchanges for efficiency. This will then free business resources to concentrate
more on competitive issues such as product quality and price.
The 2001 report further noted that the overwhelming emphasis in most national e-commerce
strategies at that time was on assisting firms. Australia differed in that the support was
addressed to the sectors.
Through the Standards Australia governance process an implementation strategy was
quickly established. BizDex was successfully completed in November 2003, with a set of key
design documents describing how interoperability could be facilitated by a national
framework. The deliverables and many other excellent comprehensive reports are freely
available from www.bizdex.com.au.
The interoperability framework is an open technical and commercial infrastructure that is
operated by non-aligned trusted bodies, namely, government and standards organisations.
The framework is ebXML compliant and comprises:
· a governance structure for collaborative development of standards;
· a repository of standards, messages and components;
55
BizDex: a one page overview.http://www.bizdex.com.au/files/BizDex-One Page Overview.pdf, last
accessed 23 August 2005
56
Australian Government. Department of Communications, Information Technology and the Arts (2001). B2B
e-Commerce: capturing value online. (http://www.dcita.gov.au/ie/publications/2001/10/b2b_e-commerce, last
accessed August 23, 2005)
e-Business Interoperability
67 September 2005
· a registry of businesses and their B2B profiles;
· a repository of re-usable schema that permit organizations to comply with, and bind
to, BizLib processes.
· an open integration platform for small businesses that have no pre-existing
middleware;
· an open commercial framework to provide incentives to deployment.
The components significantly reduce the cost of B2B integration. As announced by
Standards Australia (October 2003):
A cornerstone of BizDex is its proposed ownership structure. In a nutshell Bizdex is a
piece of national infrastructure similar to the roads network. This means that Bizdex
requires a collaborative approach to both investment and management; a balance of
public funding and private investment, coupled with a balance between regulation and
free enterprise. Such an approach promotes a high level of interoperability and trust,
thereby helping Australian organizations to avoid an operating environment plagued
by standards proliferation, technical lock-in and high switching costs. It also provides
a commercial incentive for private enterprise to rapidly populate BizDex content,
thereby enabling all Australian organizations to share in the benefits offered by e-
business.
57
In December 2003, the BizDex results of the technical proof-of concept work were presented
to over 100 organisations in open industry consultation forums in Sydney and Melbourne.
This included a demonstration connecting the SAP financial management system used by
many large firms, to the Quickbooks accounting package used by many small businesses.
The objective of these consultation forums was to demonstrate the outcomes and gather
feedback from industry representatives. Opinions were taken on the potential for BizDex to
assist the take up of e-business in Australia, as well as an assessment of the likelihood of
organisations making use of BizDex should a production service be deployed. At that time
the Working group proposed that BizDex be established as a not-for-profit entity that
supported infrastructure based around a collection of open standards-based components
including:
· a library of public e-business standards;
· a registry of businesses and their technical interface requirements; and
· integration tools such as a connector from small business software applications to
corporate software applications.
A possible business model, involving a call for Australian industry funding, was developed.
The call for industry funding was made in the first half of 2004. This did not attract sufficient
support to enable immediate and full scale deployment. Nonetheless, progress continued to
be made. In late 2003, Standards Australia led a Consortium partnered with Red Wahoo, the
Australian Wheat Board (AWB), AWB Grainflow, Freight Australia (now Pacific National) and
Sun Microsystems to trial business process e-enablement of the wheat supply chain via an
ITOL grant. Standards Australia were thus able to pilot the BizDex framework in the wheat
industry with Red Wahoo as solution architects. The results of this work along with several
case studies, technical papers and reports from a February 2005 Workshop on the future of
Bizdex are published.
58
Standards Australia, as the owners of the BizDex name, continue to
formulate the future formation of the BizDex service.
57
Standards Australia. BizDex: a one page overview.http://www.bizdex.com.au/files/BizDex-
One%20Page%20Overview.pdf, last accessed 23 August 2005
58
see www.bizdex.com.au
e-Business Interoperability
September 2005 68
Since the completion of the initial funded BizDex project, Red Wahoo undertook to self-fund
the detailed design and implementation of the BizDex design specifications. In tandem, its
Monteverdi suite of products (seehttp://www.redwahoo.com/white_papers.html) was
created. Demonstrating that there are significant commonalities between private and public
use of e-business and interoperability requirements, in October 2004, Red Wahoo were
engaged by AGIMO (an Australian Federal Government department within the Federal
Department of Finance) to define detailed use cases for specification of GovDex – a service
designed to facilitate and enable low cost interoperability of G2G and G2B transactions
modelled on BizDex. They have since been retained to work with several government
agencies to pilot the identified use case.
Scenarios for the future of Bizdex
An open workshop to determine the way forward for BizDex was held on February 8, 2005 at
the Standards Australia offices, Sydney. The workshop was attended by approximately 30
representatives from a variety of end users, government bodies, standards bodies and
industry associations. Each participant was provided with information on the BizDex
Framework, recent case studies, and options available to those undertaking or wanting to
undertake e-business. The discussion paper
59
issued in advance of the forum outlines four
possible scenarios together with an assessment of the potential activities, likely cost/revenue
model, advantages, disadvantages and role for vendors for carrying BizDex forward.
In summary, the four options identified in the subsequent Workshop Report
60
are presented
in Exhibit 3-3.
The meeting included presentations on several case studies:
· Optimising the Wheat Supply Chain
· Steel Online
· LIXI – lending industry XML initiative (i.e. mortgage lending industry)
· Perspective of a company (Boral)
The first and last of these cases had been successfully conducted using BizDex.
While there was support for all options at the meeting, Option 4 was preferred by a narrow
margin. This approach is deemed high-risk and challenging to model short and medium term
demand and revenue. There was also support for a phased approach incorporating a staged
adoption of each option in turn.
59
Standards Australia. Discussion paper: BizDex and e-business standards development: working together to
create a way forward January 2005. (http://www.bizdex.com.au/download.html, last accessed August 23,
2005)
60
Standards Australia. End-user e-business & interoperability workshop, February 8, 2005. Workshop report.
(http://www.bizdex.com.au/files/Workshopreportv2.pdf, last accessed August 23, 2005)
e-Business Interoperability
69 September 2005
Exhibit 3-3: BizDex Future Option Scenarios
Option Aims, roles and key functionality for the option
1 Share Experience
Aim: To provide a focal point for organisations or industry groups that are looking to establish
standards, in the process of developing standards, or have deployed standards.
Potential activities:
· convene meetings of end-users developing standards to share experiences;
· publish information and case studies on standards development.
2 Define Methods and Processes
Aim: To provide end-users with advice on methods and processes that could be used to develop
standards in green-field scenarios or to re-develop existing standards.
Potential activities:
· convene meetings of end-users developing standards to share experiences;
· conduct consultation process to obtain endorsement from both end-users and vendors for a
defined “Australian standard” for e-business standards development;
· publish document detailing agreed methodology;
· act as a referral service for end-users to contact vendors who use the approved method.
3 Develop, manage and maintain standards
Aim: To assist end-users with advice on methods and processes to develop standards, manage the
standards throughout their lifecycle and provide advice on deployment options.
Potential activities:
· provide leading input to international standards forums to seek acceptance or inclusion into
international standards;
· share an understanding of the Australian and Asia-Pacific business context;
· understand the business drivers for change within a client industry;
· identify opportunities for electronic commerce cooperation and improvement;
· aid client partners to form consortium projects to advance these opportunities;
· aid uptake of technology and application usage;
· recommend architectural patterns and infrastructure to support e-business efficiency;
· provide a repository facility to manage the local context usage of the reference standards;
· provide certification services for subsequent standards usage;
· provide compliance checklists for deployment frameworks.
4 Develop, Maintain, Manage and Deploy Standards.
Aim: To assist end-users to develop standards and manage them throughout their lifecycle, as well as
to host a registry of business information and integration solutions.
Potential activities: As for option 3 with the following additions:
· a registry of businesses and their technical interface requirements;
· a marketplace for vendors to sell integration tools that make use of the standards held in the
repository to connect common business applications.
Source. Standards Australia. End user e-business & Interoperability Workshop report. February 8, 2005.
(www.bizdex.com/au, last accessed August 23, 2005)
e-Business Interoperability
September 2005 70
Summary of the BizDex national collaboration for SMEs
The Australian economy includes multiple industry-specific communities. Bizdex is a public-
private partnership initiative which has been successfully applied to e-business in the wheat
production sector. The BizDex repository of integration schema and BizLink connector may
be used by any community to reduce integration setup costs – particularly for small
businesses. The concepts are equally applicable to establishing business links within and
between different sectors and service areas including Energy, Health, Banking, Automotive,
Retail, Steel, Human Resources, Utilities, Agriculture.
Bizdex is not about picking standards for industry. Instead, through its collaborative approach
to e-business it provides the technical infrastructure, methodology and governance which
industry can then use to manage change and variation between standards in common
usage. Managing standards is not the core interest of most businesses. Managing standards
is beyond the means of most SMEs, and can act as an inhibitor to large scale deployment
and take-up of e-business initiatives in and across supply chains. Bizdex helps SMEs and
industry generally to widely deploy their chosen B2B solutions, by reducing the cost of
compliance with the standards used in their trading communities.
Key messages from Section 3.2
The BizDex work is an example of a successful PPP (public private
partnership) model where the standards body takes on a much greater role and
responsibility for the costs, standards and integration tools developed. In effect
it becomes part of a wider business partnership and assumes risks in taking this
approach.
This experience should be studied at first hand and the possible applicability of
similar initiatives being introduced in Europe investigated. This could be
introduced, for example, as a special topic within a workshop conducted by the
e-Business Interoperability Forum (eBIF), or by DG Enterprise and Industry, and
the attitudes of the different stakeholders elicited in a neutral climate.
Clearly a change of this magnitude would not be undertaken lightly. The
important issue at first would be to fully understand the BizDex model and how
it might or might not suit the European SME circumstances and needs such as,
for example, the multi-cultural and multi-lingual environment.
It is recommended that a more extensive description of the BizDex experiences
covering both achievements and challenges is compiled, and made available
within Europe, and that any meeting in Europe to discuss the approach await
until after the BizDex future plans are known.
e-Business Interoperability
71 September 2005
4 Policy Considerations and Recommendations for
Action
The eEurope follow-up initiative "i2010" outlines three policy priorities:
· to create an open and competitive single market of information;
· to increase EU investment in ICT research by 80%
61
;
· to promote an inclusive information society.
B2B interoperability via standards is particularly set to help deliver on the first objective. The
key to this is knowing how best to bring SMEs into the digital B2B fold without causing
unnecessary expense or loss of management time to small and micro companies in
particular.
Exhibit 4-1: Recommendations for Policy Action
Policy Objective Suggestion for policy Potential Initiator(s)
Increase awareness and support mechanisms,
at sectoral level, with emphasis on SMEs:
· encourage sector led initiatives, ideally led
by respected neutral organisations, similar to
that conducted by CRP Henri Tudor as a
way to accelerate the pre-competitive
business and technology agreements
required for effective national and regional
implementation of existing and emerging
sectoral e-business standards and guide-
lines;
· ICT Innovation Centres
· Sector Industry Associations
· National Standards Bodies
· Member state business
development agencies
· proposed new High Level
ebXML Implementation Group
· encourage and assist CEN/ISSS eBIF and
EBES to jointly compile and distribute
information on successful implementations
of ebXML and Web Services by SMEs;
· ICT Innovation Centres
· EU and national RTD
projects
Sector level
interoperability
· facilitate SME access (preferably free) to all
strategic eBIF information documents.
· DG Enterprise and Industry
· CEN/ISSS eBIF and EBES
members
Cross-sector
interoperability
Review the enterprise size-band data presented
by sector and topic in the interoperability report
in a cross-sectoral workshop and establish a
process to:
· assist typical SME enterprise size-band
representatives establish and share
appropriate targets and standards road-
maps for interoperable e-trade with their
business partners;
· Establish formal BPI (Business Process
Integration) mechanisms (e.g. piloting,
training and model sharing) to encourage
and assist SMEs in integrating business
processes into their B2B implementations;
· Look for cross-sector commonalities.
Where relevant actively promote European
common cross-sector interoperability
· SME Associations
· Sector Industry Associations
· DG Enterprise & Industry
· CEN/ISSS eBIF and EBES
members
61
NB. This proposal, if approved, would apply to the Community funding.
e-Business Interoperability
September 2005 72
standards and convergence;
· Improve European inputs to the global e-
business standards convergence
ISO/IEC/ITU/CEFACT Business Standards
Convergence framework, and in the global
context, also collaborate with NIST eBSC
Forum convergence activities
Standards Policy Investigate the potential for developing a Bizdex
like approach to some forthcoming European or
national standardisation and e-business imple-
mentation projects.
· National Standards
Organisations
· ICT vendors
· DG Enterprise and industry
4.1 Sector level interoperability
As stated by David White,
62
Director, European Commission, Enterprise & Industry
Directorate General, in September 2005,
The realisation of i2010 goals will very much depend on “platforms, services and
applications being able to talk to one another and to build an economic activity on the
information received” This is what we understand as “Interoperability”. It is complex,
not limited to the infrastructure level but encompasses semantic interoperability,
organisational interoperability and even regulatory interoperability.
Competitiveness of SMEs
The report SMEs in Europe 2003
63
reveals that there were 19.3 million enterprises, in the
European Economic Area and Switzerland, providing employment for 140 million people.
More than 99% of these enterprises were SMEs; 92% with less than 10 employees; and,
about half of all enterprises (those providing employment and income to the self-employed
and family workers only) having no employees at all
64
. More than two thirds of all jobs were in
SMEs, with almost one third of all jobs provided by large enterprises. Medium term
developments (1998-2003) show that, despite fluctuations over time, employment increased
in SMEs (and in particular in micro and small enterprises), whereas in large enterprises
employment decreased.
As stated in the same report, this is remarkable as real turnover and value added growth
have been smaller in SMEs than in large enterprises. So, large enterprises increased their
production more and sold more products and services than SMEs. In effect large enterprises
have become more efficient, more quickly than SMEs. In practice this may have been
influenced by a combination of downsizing and retrenchment rather than solely through
business efficiencies. Thus detailed study of the data in the survey analysis requires sector
experts who can distinguish the causative factors. In the case of the cross-sector results
62
White, David. Interoperability and standards
(http://portal.etsi.org/docbox/workshop/sos_interoperability/SOS2/SOS2_14%20David_White_Interoperability_
and_Standards.doc, last accessed 29 Sep 2003)
63
SMEs in Europe 2003 (Observatory of European SMEs 2003, No. 7)
(http://europa.eu.int/comm/enterprise/enterprise_policy/analysis/doc/smes_observatory_2003_report7_en.pdf,
last accessed 29 Sep 2003)
64
Highlights from the 2003 Observatory (Observatory of European SMEs 2003, Number 8)
(http://europa.eu.int/comm/enterprise/enterprise_policy/analysis/doc/smes_observatory_2003_report8_en.pdf,
last accessed August 23, 2005)
e-Business Interoperability
73 September 2005
presented here this means that input is required from business industry experts from the
relevant sectors.
Increase SME awareness of the business and support move to B2B
Evidence from the Luxembourgish and Australian initiatives outlined in previous chapter
shows that specific targeted actions at sectoral level to facilitate e-trading partnerships by
increasing awareness and support for faster SME take up and implementation of flexible
standard based approaches to B2B is recommended, required and can be effective. Broad
policy initiatives are suggested based on the following observations drawn from the survey
results and other information published on SME efficiencies relative to large firms:
· the awareness and adoption data from the enterprise size-band analysis per sector
from e-Business W@tch indicates an almost linear relationship between B2B related
activities and enterprise size;
· micro, small and medium enterprises trail one another and seriously lag behind large
companies in the adoption rates for B2B related technologies; and,
· the lower efficiency of SMEs relative to large firms noted in the report “SMEs in
Europe 2003”.
Involve the stakeholders
When implementing interoperable systems, standards alone are insufficient. Steps must be
taken to accelerate the efficiency and hence competitiveness of SMEs by increasing
awareness and support for SMEs in relation to adopting EDI/XML based solutions (ebXML
and Web services).
As shown by the CRTI-B Case Study it is essential to involve the various stakeholders in a
structure which, although relying on existing standards, focuses on the primary
interoperability needs, and proceeds on a time controlled cycle to develop and implement
functioning systems. If this is done properly then standards can trigger innovation directly by
codifying accumulated technological experience and by forming a baseline from which new
technologies emerge. Standards can also act as a catalyst for innovation indirectly because
they increase global competitiveness, which in turn spurs innovation.
General Observations
The growth observed in use of EDI and other standards between the e-Business 2003 and
2005 studies is heartening. However, there is a difference between adopting specific
standards and making those standards part of everyday business for all occasions. The
following activities could be considered to enhance the actual use of e-standards in business
transactions:
· Subject to interest and support from industry and national agencies, the Commission
could establish, in conjunction with the European Standards Organisations and
relevant other bodies such as Chambers of Commerce, and User/SME Associations
and organisations, a new high level ebXML implementation group to advise on
ebXML introduction, implementation and application in all sectors across Europe. The
charter of this group would be to develop a systematic support plan to accelerate the
sporadic implementations and identify/overcome barriers to progress. It is envisaged
that the High Level Group will select at least one sector, with significant information
exchange and trading links to other sectors, and use that as the nucleus for priming
the roll-outs.
· The proceeding and presentations delivered at all eBIF meetings could be freely
accessible to all. The rationale for this suggestion is that eBIF is by its charter not a
e-Business Interoperability
September 2005 74
standards making body. It operates as a forum and information repository for those
companies, especially SMEs that are interested in establishing interoperable
business connections with partners in Europe. In addition a category of free
corresponding member could be added to the current membership lists which will
entitle those who sign up to free electronic copies of all documentation. Such
corresponding members could also be entitled to participate in and encouraged to
contribute papers, case studies and information about interoperability
implementations, developments and conferences.
· Where relevant, subsets of information tailored to particular SME group interests
or general information related to standards convergence or cross-sector studies
should be compiled and individually targeted to specific companies and sector
associations in accordance with dissemination profiles.
4.2 Cross-sector interoperability
Europe should follow more closely, and contribute where relevant to policy and business
requirements, to the e-business technology framework and standards convergence
underway in the ISO/IEC/ITU/CEFACT MoU Management Framework Group. In addition,
within the longer term global considerations, partnership collaboration is also recommended
with the standards’ matrix and convergence themes of the NIST eBSC Forum.
CEN/ISSS already has commitment to provide input to such globally focused activities, as
evidenced for instance by the eBES and eBIF goals. However, stakeholder participation and
external awareness/profile of relevant activities in these two groups are relatively low. For
example, interest from national standards bodies is very limited – indeed EDI standardisation
and delegations to the UN/CEFACT process has usually been the responsibility of national
organisations other than the national standards bodies. In addition, in terms of their
investments and active standards participation European arms of multi-national ICT vendor
companies, and many European research projects, generally favour direct influencing of
international standards and global consortia. Consequently European standards framework
activities, so essential for effective interoperability which depends heavily on the system
architectures adopted, are generally seriously under-resourced. It is critical that Europe
overcome these barriers and contribute to facilitating the e-business technology framework
and standards convergence necessary for global e-business outreach.
Business Process Standards
A common feature of all of the newer approaches to interoperability is the need for a
systematic approach to understanding and modelling the business processes. Thus, at this
time business managers should where possible be focusing on the requirements and
standard methodologies that will support business process description and modelling.
e-Business Interoperability
75 September 2005
4.3 Standards policy
Ideally, strategic investment decisions enable long term stability and growth potential. At the
same time it is vital to have an inbuilt flexibility. In fact according to Mintzberg
65
strategies
need not be deliberate; they can also emerge:
strategies can form, as well as being formulated. A realised strategy can emerge in
response to an evolving situation, or it can be brought about deliberately, through a
process of formulation followed by implementation. But when these planned
intentions do not produce the required actions, organisations are left with unrealized
strategies.
This is the approach that appears to have been adopted in formulating the i2010 Action Plan.
The broad outlines have been proposed and agreed. The way to achieve the plan, tailor
some of the edges and keep a strong focus on benefits for SMEs is now open to debate. The
essence of debate – if it is not to degenerate into a futile discussion on semantics – is that
there must be evidence on which to make specific choices. This evidence may be a hunch, a
rough back of the envelope calculation, or it may be something stronger and more scientific.
The evidence from e-Business W@tch presented in this report and elsewhere should be
used to inform the planning for SMEs in responding to a changing world of technology and
electronic business relationships.
Realizing, in particular with reference to successful Public Private Partnership work, that
there are options available within EDI/XML solutions (ebXML, Web Services) to this end
consideration should be given within the national standards bodies, European standards
organisations and the European Commission to specific public private partnerships similar to
the BizDex initiative in Australia.
In deciding what is to be accomplished technologically, the policy criteria must be "the good
of man, of society and of business”. In planning for the use of technology, both decision
makers and policy planners sometimes seem to operate on other grounds. Often appearing
to decide based on either or both of two other principles: a) "what is technically possible to
do, ought to be done" – whereby feasibility is elevated into a normative concept; and b)
"maximal efficiency and productivity" - even if this entails minimal individuality, creativeness,
and the elimination of differences.
Certainly it is possible to wait and see what new standards emerge in the areas of web
services, ontologies, grids and the rest of the semantic web. It is possible to wait for better
and more complicated standards, which will for instance eventually enable automated agent-
based trading between applications. However in determining the standards’ winner in
network markets, expectations are crucial and can easily be self-fulfilling: the product or
technology expected to prevail does prevail
66
.
Visibly choosing or supporting a business interoperability framework now can make a
world of difference in the adoption rate. The issue is not what is the best standard; it is not
always the best standard that wins out. The ideal outcome is that the winning technology
used to assist inter-enterprise business trading, increases flexibility and competitiveness and
can be easily adopted and applied by all industries, regardless of size and location.
65
Mintzberg, Henry (1987). Crafting strategy. Harvard Business Review, July-August 1987, pp 66-75.
66
Shapiro, Carl (1999) and Hal R. Varian. Information rules: a strategic guide to the network economy. Harvard
Business School Press. ISBN 0-87584-863-X. Page 211
e-Business Interoperability
September 2005 76
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22 (2) Fall, 2005. (pre-publication versionhttp://ebusiness.tc.msu.edu/netindustry/page2/files/JMIS2005.pdf,
last accessed August 23, 2005)
XML acronym demystifier (http://www.xml-acronym-demystifier.org/, last accessed August 23, 2005)
e-Business Interoperability
September 2005 80
Annex I: The e-Business Survey 2005 –
Methodology Report
The e-Business W@tch collects data on the use of ICT and e-business in European enterprises by
means of representative surveys. The e-Business Survey 2005, which was the third survey after those
of 2002 and 2003, had a scope of 5,218 telephone interviews with decision-makers in enterprises from
seven EU countries (Czech Republic, France, Germany, Italy, Poland, Spain and the UK).
67
Interviews
were carried out in January and February 2005, using computer-aided telephone interview (CATI)
technology.
Questionnaire
The general design of the questionnaire builds on the ones used in the previous surveys of 2002 and
2003 in order to ensure a basic continuity of the research approach. However, new modules on
security and interoperability have been added, while other modules have been reduced (mostly the
ones on perceived impacts of e-business, where little new evidence was to be expected compared to
the findings of 2003).
New questions were also introduced in the e-commerce related modules, reflecting the developments
in electronic business and changing perspectives in research, in particular the emphasis on electronic
business processes. An important focus of the 2005 survey was on the use of ICT systems to support
e-procurement and online sales processes. These questions complement the previously used
questions on online purchasing and selling activity.
The questionnaires of all three surveys (2002, 2003, 2005) can be downloaded from the e-Business
W@tch website at www.ebusiness-watch.org/about/methodology.htm.
Population
In contrast to the surveys of 2002 and 2003, the 2005 survey considered only companies that used
computers. Thus, the highest level of the population was the set of all computer-using enterprises
which were active within the national territory of one of the 7 countries covered, and which had their
primary business activity in one of the 10 sectors specified on the basis of NACE Rev. 1.1 categories.
Evidence from previous surveys shows that this does not make a noticeable difference for medium-
sized and large firms, as the share of firms that use computers can be expected to be 99% or more in
all sectors and countries covered. Differences are relevant, however, for micro and small enterprises,
in particular in the food and beverages industry, the textile industry, construction and tourism. In these
four sectors, 10-30% of micro enterprises and 4-15% of small firms (depending on the country and
sector) do not use a computer.
68
Therefore it makes a difference if a figure represents a percentage of
"all companies" (as in 2003) or a percentage of "companies using computers" (as in 2005).
Differences are much less pronounced, though, when figures have been weighted by employment.
The 10 sectors that have been selected for the 2005 survey are extremely heterogeneous in terms of
their size. Construction is by far the largest with about 2.3 million enterprises in the EU-25. At the other
end of the range are the aerospace and pharmaceutical industries with only about 2,200 and 3,900
firms respectively in the EU-25. This is a factor of about 100 between the largest and smallest sector.
This imbalance has clearly implications for the achievement of survey quota and the impact of
weighting on sector data and on aggregate results.
67
These seven countries are frequently referred to as the "EU-7" in this report. They account for roughly 75% of
the EU-25 population and GDP.
68
Non-computer users include typically small craft firms (textile, construction), bars, restaurants or pensions (in
tourism), and small food producing companies.
e-Business Interoperability
81 September 2005
Table 1: Population coverage of the e-Business Survey (2005)
NACE Rev. 1.1
No.
Section Division / Group
Sector name (as used by e-Business W@tch)
01 DA 15 Manufacture of food products and beverages
02 DB 17, 18 Manufacture of textiles (17), wearing apparel; dressing & dyeing of fur (18)
03 DE 22 Publishing, printing and reproduction of recorded media
04 DG 24.4, 24.5 Manufacture of pharmaceuticals (24.4), soap and detergents, cleaning and
polishing preparations, perfumes and toilet preparations (24.5)
05 DK 29.1 – 29.5 Manufacture of machinery and equipment (not included: Manufacture of
weapons and ammunition, domestic appliances)
06 DM 34 Manufacture of motor vehicles, trailers and semi-trailers
07 DM 35.3 Manufacture of aircraft and spacecraft
08 F 45 Construction
09 H, I, O 55, 62.1, 63.3,
92.3+5
Tourism, including hotels and restaurants (55), parts of air transport (62), travel
agencies and tour operators (63.3), and parts of recreational, cultural and
sporting activities (92)
10 K 72 Computer and related activities
Sampling frame and method
No cut-off was made in terms of minimum size of firms. The sample drawn was a random sample of
companies from the respective sector population in each of the seven countries, with the objective of
fulfilling minimum strata with respect to company size class per country-sector cell. Strata were to
include a 10% share of large companies (250+ employees), 30% of medium sized enterprises (50-249
employees), 25% of small enterprises (10-49 employees) and up to 35% of micro enterprises with less
than 10 employees. Samples were drawn locally by fieldwork organisations based on widely
recognized business directories and databases (see Table 2).
Table 2: Directories from which samples were drawn (2005)
Country Directory / database
CZ Czech Republic Albertina Business Database (database of economic subjects with >1m entries)
DE Germany Heins und Partner Business Pool
ES Spain Dun & Bradstreet
FR France SIREN file from INSEE (the French National Statistics Institute)
IT Italy Dun & Bradstreet
PL Poland Kompass Polska
UK United Kingdom Dun & Bradstreet
The survey was carried out as an enterprise survey: data collection and reporting focus on the
enterprise, defined as a business organisation (legal unit) with one or more establishments. In some of
the sectors, target quota in the larger enterprise size-bands could not be accomplished in each of the
countries. In these cases, interviews were shifted to the next largest size-band (from large to medium-
sized, from medium-sized to small).
Fieldwork
Fieldwork was coordinated by the German branch of Ipsos GmbH (www.ipsos.de) and conducted in
cooperation with its local partner organisations (see Table 3) on behalf of e-Business W@tch. Pilot
interviews prior to the regular fieldwork were conducted with 12 companies in Germany in December
2004, in order to test the questionnaire (structure, comprehensibility of questions). The survey had a
scope of 5,218 interviews, evenly spread across the seven countries covered. About 565 interviews
per sector were conducted (see Table 4), except for the aeronautics and the pharmaceutical industry.
Due to the small population of firms in these sectors, it was not possible to achieve the target quota. In
the aerospace industry, only 163 company interviews could be realised in the seven countries
covered. In this sector, practically the entire population of companies was contacted.
e-Business Interoperability
September 2005 82
Table 3: Market research companies having conducted the fieldwork in the e-Business Survey 2005
Country Fieldwork organisation
CZ Czech Republic Ipsos Czech Republic, Skolska 32/694, 110 00 Praha 1
DE Germany Ipsos GmbH, Papenkamp 2-6, 23879 Mölln
ES Spain Ipsos ECO Consulting, Avda. de Burgos, 12.-8
a
, 28036 Madrid
FR France Ipsos Insight Marketing, 99, rue de l'Abbé Groult, 75739 Paris Cedex 15
IT Italy Demoskopea S.p.A., Via Salaria 290/ Via Rubicone 41, 00199 Rome
PL Poland Ipsos, ul. Pulawska 39, 02-508 Warsaw
UK United Kingdom Continental Research, 132-140 Goswell Road, EC1V 7DY London
Table 4: Number of interviews conducted by sector and country (2005)
Sector CZ DE ES FR IT PL UK TOTAL
Food and beverages 85 80 82 80 86 83 75 571
Textiles and clothing 85 76 81 80 81 83 75 561
Publishing and printing 84 80 82 80 79 83 75 563
Pharmaceutical industry 54 83 81 76 81 82 75 532
Machinery and equipment 85 80 81 77 84 83 75 565
Automotive industry 85 80 81 80 81 83 75 565
Aerospace industry 20 38 15 39 23 3 25 163
Construction 84 81 83 80 80 83 75 566
Tourism 84 80 82 80 82 83 76 567
Computer related services 84 80 82 78 82 84 75 565
TOTAL 750 758 750 750 759 750 701 5218
Table 5: Interview contact protocol: completion rates and non-response reasons (2005)
CZ DE ES FR IT PL UK Total
1 Sample (gross) 2632 7247 8796 10123 5082 7825 13104 54809
1.1 Telephone number does not exist 126 880 680 373 340 959 870 4228
1.2 Not a company (e.g. private household) 42 130 220 200 44 214 115 965
1.3 Fax machine / modem 40 56 10 0 359 248 116 829
1.4 Quota completed > address not used 191 361 3357 1623 351 1161 3856 10900
1.5 No target person in company 57 344 186 98 72 109 691 1557
1.6 Language problems 2 16 14 14 1 0 0 47
1.7 No answer on no. of employees 10 8 3 1 0 0 8 30
1.8 Company does not use computers 11 80 194 332 41 30 567 1255
Sum 1.1 – 1.8 479 1875 4664 2641 1208 2721 6223 19811
2 Sample (net) 2153 5372 4132 7482 3874 5104 6881 34998
2.1 Nobody picks up phone 212 366 335 892 1080 1333 6 4224
2.2 Line busy, engaged 60 52 6 68 60 438 0 684
2.3 Answering machine 42 133 20 1208 79 137 463 2082
2.4 Contact person refuses (refusal at
reception, switchboard)
472 931 2010 2024 755 1613 1695 9500
2.5 Target person refuses 388 2125 184 693 142 122 2591 6245
2.6 No appointment during fieldwork period 42 13 395 202 0 261 298 1211
2.7 Open appointment 77 935 363 1584 968 371 1008 5306
2.8 Target person is ill / not available 10 3 47 0 2 0 0 62
2.9 Interview abandoned 91 56 22 57 28 79 119 452
2.10 Interview error, cannot be used 9 0 0 4 1 0 0 14
Sum 2.1 – 2.10 1403 4614 3382 6732 3115 4354 6180 29780
3 Successful interviews 750 758 750 750 759 750 701 5218
Completion rate (= [3] / [2]) 34.8% 14.1% 18.2% 10.0% 19.6% 14.7% 10.2% 14.9%
Average interview time (min : sec) 17:07 19:06 17:29 17:15 20:51 21:15 19:53 19:00
e-Business Interoperability
83 September 2005
Non response: In a voluntary telephone survey, in order to achieve the targeted interview totals, it is
always necessary to contact more companies than just the number equal to the target. In addition to
refusals, or eligible respondents being unavailable, any sample contains a proportion of "wrong"
businesses (e.g., from another sector), and wrong and/or unobtainable telephone numbers. Table 5
shows the completion rate by country (completed interviews as percentage of contacts made) and
reasons for non-completion of interviews. Higher refusal rates in some countries, sectors or size bands
(especially among large businesses) inevitably raises questions about a possible refusal bias. That is,
the possibility that respondents differ in their characteristics from those that refuse to participate.
However, this effect cannot be avoided in any voluntary survey (be it telephone- or paper-based).
Feedback on the fieldwork
No major problems were reported from the fieldwork with respect to interviewing (comprehensibility of
the questionnaire, logical structure). The overall feedback from the survey organisations was that
fieldwork ran smoothly and that the questionnaire was well understood by most respondents. The
main challenge was the fulfilment of the quotas, which was difficult or impossible in some of the
sectors, in particular among the larger size-bands. Specific remarks from fieldwork organisations,
however, point at some differences in the local situation (see Table 6).
Table 6: Comments by national fieldwork companies on their experience (2005)
Country Comments
CZ Czech
Republic
· It was more difficult to complete interviews with very small companies. They were less
willing to participate in an interview.
· Respondents often felt that questions about a firm's profit or turnover are not adequate.
The interviewers mentioned that these questions were several times a cause of
abandoning the interview.
DE Germany · In total fieldwork ran smoothly and the questionnaire was easy to understand and
interesting for most of respondents.
· Answering the question about turnover as well as the investment on ICT was often
problematic for the respondents and yielded a high proportion of non-replies.
· Respondents of small companies often had difficulty in answering questions related to
specific technical terms and application. In cases where they used only one or few
computers, some questions (e.g. regarding networks) were not relevant for them.
· Positive resonance comes from the respondents when they know that the survey is
being done on behalf of the European Commission. The reference to the website at the
end of the interview was welcome and helpful.
ES Spain · Interviews in very small companies were more difficult to complete due to the lack of
knowledge about ICT. On the other hand, the participation of respondents in big
companies was difficult to achieve.
· Generally the questionnaire was easy to understand.
· About a quarter of the firms contacted have subcontracted most of their ICT tasks,
which made it difficult for the respondents to answer specific technical questions.
· Questions regarding the turnover and investments were difficult to answer for the
respondents and yielded a high proportion of don’t know responses. This is also often
experienced in other B2B surveys.
FR France · Small companies often do not have much ICT equipment. Respondents therefore
sometimes had difficulty in answering some of the questions, since the questionnaire
was not adapted to these companies. Small companies often answered “don’t know” to
more detailed questions.
· Respondents from larger companies had difficulty answering questions concerning
turnover, benefits and other financial issues. These questions would be better put to
somebody from the financial department.
· As more and more companies outsource their IT department, it is difficult to identify a
responsible person within the company to answer the questions.
e-Business Interoperability
September 2005 84
IT Italy · The questionnaire was considered long, but quite easy to answer.
· However, a few sections (mainly D and E) were considered more complicated than
others. In particular technical terms that referred to security and to online services were
difficult to understand.
· Interviews were carried out without any problems in medium-sized enterprises where it
is easier to identify and contact an IT manager. Those respondents had the best grasp of
what was being talked about in the interview.
· The financial questions were difficult to answer for most of the respondents, especially
the question on ICT investments.
PL Poland · Respondents from small companies often had difficulties in answering questions related
to specific technical applications.
· Companies are quite reluctant to provide financial information, so respondents often
answer DK to the financial questions.
· In many companies, IT people are not allowed to say anything about internal matters of
the company.
· Many companies outsource their IT department and its activities.
UK United
Kingdom
· As with previous surveys carried out in the context of the e-Business W@tch
programme, fieldwork ran relatively smoothly.
· However, the anticipated strike-rate was severely affected by the substantial length of
the interview (20 minutes).
· Gathering turnover and investment details again yielded a high proportion of don’t know
responses.
· As a final point, it is becoming increasingly difficult to secure interviews with IT/DP
professionals, and we suspect that this situation will only worsen in the future.
Weighting schemes
Due to stratified sampling, the sample size in each size-band is not proportional to the population
numbers. If proportional allocation had been used, the sample sizes in the 250+ size-band would have
been extremely small, not allowing any reasonable presentation of results. Thus, weighting is required
so that results adequately reflect the structure and distribution of enterprises in the population of the
respective sector or geographic area. e-Business W@tch applies two different weighting schemes:
weighting by employment and by the number of enterprises.
69
· Weighting by employment: Values that are reported as employment-weighted figures should
be read as "enterprises comprising x% of employees" (in the respective sector or country).
The reason for using employment weighting is that there are many more micro-enterprises
than any other firms. If the weights did not take into account the economic importance of
businesses of different sizes in some way, the results would be dominated by the percentages
observed in the micro size-band.
· Weighting by the number of enterprises: Values that are reported as "x% of enterprises" show
the share of firms irrespective of their size, i.e. a micro-company with a few employees and a
large company with thousands of employees both count equally.
The use of filter questions in interviews
In the interviews, not all questions were asked to all companies. The use of filter questions is a
common method in standardised questionnaire surveys to make the interview more efficient. For
example, questions on the type of Internet access used were only asked to those companies that had
replied to have Internet access. Thus, the question whether a company has Internet access or not
serves as a filter for follow-up questions.
69
In the tables of this report, data are normally presented in both ways, except for data by size-bands. These are
shown in % of firms within a size-band, where employment-weighting is implicit.
e-Business Interoperability
85 September 2005
The results for filtered questions can be computed on the base of only those enterprises that were
actually asked the question (e.g. "in % of enterprises with Internet access"), but can also be computed
on the base of "all companies". In this report, both methods are used, depending on the indicator. The
base (as specified in footnotes of tables and charts) is therefore not necessarily identical to the set of
companies that were actually asked the underlying question.
Statistical accuracy of the survey: confidence intervals
Statistics vary in their accuracy, depending on the kind of data and sources. A "confidence interval" is
a measure that helps to assess the accuracy that can be expected from data. The confidence interval
is the estimated range of values on a certain level of significance. Confidence intervals for estimates of
a population fraction (percentages) depend on the sample size, the probability of error, and the survey
result (value of the percentage) itself. Further to this, variance of the weighting factors has negative
effects on confidence intervals.
Table 7 gives some indication about the level of accuracy that can be expected for industry totals
(EU7 totals based on all respondents) depending on the weighting scheme applied. For totals of all-
sectors, an accuracy of +/- 2 percentage points can be expected for most values that are expressed
as "% of firms", and of +/- 3 percentage points for values that are weighted by employment. The
confidence interval for industry totals (EU-7) is about +/- 5 percentage points (in both weighting
schemes). Employment-weighted results for the pharmaceutical, the automotive and the aeronautics
industry have higher confidence intervals, because these sectors are more sensitive to weights due to
their structure (i.e. the dominance of large firms in a comparatively small population). In the
aeronautics industry, employment-weighted figures should not be used.
The calculation of confidence intervals is based on the assumption of (quasi-) infinite population
universes. In practice, however, in some industries and in some countries the complete population of
businesses consists of only several hundred or even a few dozen of enterprises. In some cases,
literally each and every enterprise within a country-industry and size-band cell was contacted and
asked to participate in the survey. This means that it is practically impossible to achieve a higher
confidence interval through representative enterprise surveys in which participation is not obligatory.
This should be borne in mind when comparing the confidence intervals of e-Business W@tch surveys
to those commonly found in general population surveys.
e-Business Interoperability
September 2005 86
Table 7: Confidence intervals for all-sector and sector totals (EU-7)
Confidence interval
Survey
result
Weighted by
employment
Weighted as
"% of firms"
Unweighted
All sectors (aggregate), EU-7 10% 8.1% - 12.2% 8.7% - 11.5% 9.3% - 10.7%
Food and beverages 10% 7.2% - 13.8% 6.9% - 14.3% 8.1% - 12.3%
Textile industries 10% 7.4% - 13.3% 6.9% - 14.3% 8.1% - 12.3%
Publishing and printing 10% 7.2% - 13.7% 7.2% - 13.8% 8.1% - 12.3%
Manufacture of pharmaceuticals 10% 5.3% - 18.0% 7.5% - 13.1% 8.1% - 12.4%
Manufacture of machinery and equipment 10% 6.5% - 15.1% 7.1% - 13.9% 8.1% - 12.3%
Automotive industry 10% 4.6% - 20.2% 7.7% - 12.8% 8.1% - 12.3%
Aerospace industry 10% 1.7% - 41.3% 5.7% - 16.9% 6.8% - 14.6%
Construction 10% 7.7% - 12.8% 7.0% - 14.1% 8.1% - 12.3%
Tourism 10% 7.2% - 13.8% 6.9% - 14.3% 8.1% - 12.3%
IT services 10% 7.3% - 13.6% 6.5% - 15.2% 8.1% - 12.3%
All sectors (aggregate), EU-7 30% 27.0% - 33.2% 27.9% - 32.2% 29.0% - 31.1%
Food and beverages 30% 25.2% - 35.2% 24.7% - 35.9% 26.9% - 33.3%
Textile industries 30% 25.7% - 34.6% 24.7% - 35.8% 26.9% - 33.3%
Publishing and printing 30% 25.3% - 35.1% 25.3% - 35.2% 26.9% - 33.3%
Manufacture of pharmaceuticals 30% 21.5% - 40.2% 25.9% - 34.4% 26.8% - 33.4%
Manufacture of machinery and equipment 30% 23.9% - 36.9% 25.1% - 35.4% 26.9% - 33.3%
Automotive industry 30% 19.9% - 42.6% 26.3% - 34.0% 26.9% - 33.3%
Aerospace industry 30% 10.5% - 61.0% 22.3% - 39.0% 24.4% - 36.2%
Construction 30% 26.3% - 34.0% 24.9% - 35.7% 26.9% - 33.3%
Tourism 30% 25.2% - 35.2% 24.7% - 35.9% 26.9% - 33.3%
IT services 30% 25.5% - 35.0% 23.9% - 36.9% 26.9% - 33.3%
All sectors (aggregate), EU-7 50% 46.6% - 53.4% 47.7% - 52.3% 48.9% - 51.1%
Food and beverages 50% 44.6% - 55.4% 43.9% - 56.1% 46.6% - 53.4%
Textile industries 50% 45.2% - 54.8% 44.0% - 56.0% 46.5% - 53.5%
Publishing and printing 50% 44.7% - 55.3% 44.6% - 55.4% 46.5% - 53.5%
Manufacture of pharmaceuticals 50% 39.8% - 60.2% 45.4% - 54.6% 46.4% - 53.6%
Manufacture of machinery and equipment 50% 42.9% - 57.1% 44.4% - 55.6% 46.5% - 53.5%
Automotive industry 50% 37.7% - 62.3% 45.8% - 54.2% 46.5% - 53.5%
Aerospace industry 50% 23.2% - 76.8% 40.9% - 59.1% 43.6% - 56.4%
Construction 50% 45.8% - 54.2% 44.1% - 55.9% 46.5% - 53.5%
Tourism 50% 44.5% - 55.5% 43.9% - 56.1% 46.5% - 53.5%
IT services 50% 44.8% - 55.2% 42.9% - 57.1% 46.5% - 53.5%
All sectors (aggregate), EU-7 70% 66.8% - 73.0% 67.8% - 72.1% 68.9% - 71.0%
Food and beverages 70% 64.8% - 74.8% 64.1% - 75.3% 66.7% - 73.1%
Textile industries 70% 65.4% - 74.3% 64.2% - 75.3% 66.7% - 73.1%
Publishing and printing 70% 64.9% - 74.7% 64.8% - 74.7% 66.7% - 73.1%
Manufacture of pharmaceuticals 70% 59.8% - 78.5% 65.6% - 74.1% 66.6% - 73.2%
Manufacture of machinery and equipment 70% 63.1% - 76.1% 64.6% - 74.9% 66.7% - 73.1%
Automotive industry 70% 57.4% - 80.1% 66.0% - 73.7% 66.7% - 73.1%
Aerospace industry 70% 39.0% - 89.5% 61.0% - 77.7% 63.8% - 75.6%
Construction 70% 66.0% - 73.7% 64.3% - 75.1% 66.7% - 73.1%
Tourism 70% 64.8% - 74.8% 64.1% - 75.3% 66.7% - 73.1%
IT services 70% 65.0% - 74.5% 63.1% - 76.1% 66.7% - 73.1%
All sectors (aggregate), EU-7 90% 87.8% - 91.9% 88.5% - 91.3% 89.3% - 90.7%
Food and beverages 90% 86.2% - 92.8% 85.7% - 93.1% 87.7% - 91.9%
Textile industries 90% 86.7% - 92.6% 85.7% - 93.1% 87.7% - 91.9%
Publishing and printing 90% 86.3% - 92.8% 86.2% - 92.8% 87.7% - 91.9%
Manufacture of pharmaceuticals 90% 82.0% - 94.7% 86.9% - 92.5% 87.6% - 91.9%
Manufacture of machinery and equipment 90% 84.9% - 93.5% 86.1% - 92.9% 87.7% - 91.9%
Automotive industry 90% 79.8% - 95.4% 87.2% - 92.3% 87.7% - 91.9%
Aerospace industry 90% 58.7% - 98.3% 83.1% - 94.3% 85.4% - 93.2%
Construction 90% 87.2% - 92.3% 85.9% - 93.0% 87.7% - 91.9%
Tourism 90% 86.2% - 92.8% 85.7% - 93.1% 87.7% - 91.9%
IT services 90% 86.4% - 92.7% 84.8% - 93.5% 87.7% - 91.9%
confidence intervals at =.90
e-Business Interoperability
87 September 2005
Annex II: The e-Business Scoreboard 2005
Introduction
The e-Business Scoreboard approach was developed by the e-Business W@tch in 2004. It is an
instrument to compare and visualize the intensity of e-business activity across different sectors,
countries or size-bands, in different areas of business activity. Conceptually, the Scoreboard owes to
the Balanced Scorecard (BSC) approach, which suggests that an organisation should be viewed from
four perspectives, and that metrics (and targets) are to be defined for each perspective. Similarly, the
e-Business Scoreboard looks at ICT use by enterprises from four (inter-related) perspectives.
Component indicators represent the metrics for these perspectives.
The Scoreboard is composed of comp-
onent indicators which are taken from the
e-Business Survey 2005 by the e-
Business W@tch. These indicators can be
aggregated on two levels:
· 16 component indicators are, in a
first step, aggregated into four sub-
indices that represent major applic-
ation areas of e-business. The
diamond charts on the following pages
show these four dimensions of e-
business activity.
· The four sub-indices can then be
aggregated into the (overall) e-
Business Index.
Structure of the e-Business Scoreboard
E-Business
Index
A. Basic ICT
infrastructure
4 sub-Indices
(by business function)
E-Business
Index
B. Internal
processes
C. Supply-side
activity
D. Customer-
facing activity
16 component
indicators
A.1 Internet
A.2 LAN
A.3 VPN
A.4 Remote
B.1 Intranet
etc.
E-Business
Index
A. Basic ICT
infrastructure
4 sub-Indices
(by business function)
E-Business
Index
B. Internal
processes
C. Supply-side
activity
D. Customer-
facing activity
16 component
indicators
A.1 Internet
A.2 LAN
A.3 VPN
A.4 Remote
B.1 Intranet
etc.
The E-Business Scoreboard takes into account the percentages (diffusion rates) from all sectors and
show how a specific sector differs from the all-sector-average. An index value is based on mean
values and standard deviations.
70
Thus, index values express the multiple of the standard deviation (1
or (-1)) for a specific sector and the selected indicator. 0 equals the mean value for all sectors.
Indexes simplify multi-dimensional concepts. To correctly assess the validity and shortcomings of the
Scoreboard and its e-Business Index, the following notes are important to be taken into account:
· Weighting: Results are influenced by the selection of the underlying weighting scheme. In the
computation presented in this chapter, employment-weighted figures were used. This
emphasizes e-business activity in large firms and has an impact on the Index for sectors with
dominant large players (for instance the automotive and pharmaceutical industry).
· Component indicators: The selection of component indicators may have a bias towards
manufacturing activities, as some indicators in dimension B ("internal process") are more
relevant for manufacturing than for service sectors (e.g. ERP). The full list of component
indicators and their definition is given in Annex II.
· Relative comparison: The e-Business Index and the Scoreboards do not represent absolute
measures of e-business activity. The Scoreboard results depend on the respective set of
sectors (or countries etc.) that are compared to each other, as figures are derived from
computing standard deviations from the average of the respective set.
70
Constituting values are z-values, i.e. z = (x - mean(x))/stddev(x). This procedure results in a distribution with
mean(z)=0 and stddev(z)=1.
e-Business Interoperability
September 2005 88
Component indicators of the Scoreboard 2005
A. ICT infrastructure and basic connectivity
A.1 Enterprises connecting
computers with a LAN
= the percentage of employees from a sector working in enterprises that
have connected computers with a Local Area Network (LAN).
A.2 Internet connectivity = the percentage of employees working in enterprises that are
connected to the internet, with a supplementary indicator for the type
of internet connection in terms of bandwidth. The percentage of
employees working in enterprises that are connected with a bandwidth
of less than 2 Mbit/s is computed with a factor of 0.5, enterprises
connected with at least 2 Mbit/s bandwidth with a factor of 1.0. The
maximum value of 100 would be returned if all employees from a
sector work in enterprises connected to the internet with more than 2
Mbit/s bandwidth.
A.3 Remote access to the
company network
= the percentage of employees from a sector working in enterprises
where it is possible to access data from the company's computer
system from a remote location.
A.4 Enterprises with a VPN = the percentage of employees from a sector working in enterprises that
use a Virtual Private Network (VPN)
B. Internal business process automation
B.1 Use of an intranet = the percentage of employees working in enterprises that use an
intranet.
B.2 Use of online technology to
track working hours and/or
production time
= the percentage of employees working in enterprises that use online
technologies (other than e-mail) to track working hours and/or
production times
B.3 Use of EDM systems = the percentage of employees working in enterprises that use an
Enterprise Document Management system
B.4 Use of ERP systems = the percentage of employees working in enterprises that have
implemented an ERP (enterprise resource planning) system
C. Procurement and supply chain integration
C.1 Enterprises purchasing at
least 5% of their supplies online
= the percentage of employees working in enterprises saying that they
purchase at least 5% of their supplies online via the internet or other
computer-mediated networks (for example via EDI based connections
to their suppliers)
C.2 Use of specific IT solutions for
e-procurement
= the percentage of employees working in enterprises that use specific
IT solutions to support the selection of their suppliers and/or
procurement processes
C.3 Use of SCM systems = the percentage of employees working in enterprises that use an SCM
(supply chain management) system
C.4 Online management of
capacity and inventory
= the percentage of employees working in enterprises that that use
technologies to manage capacity and inventory online
D. Marketing and sales processes
D.1 Enterprises maintaining a web-
site with a CMS
= the percentage of employees working in enterprises that have a
website and use a content management system to maintain and
update the website
D.2 Use of CRM software systems = the percentage of employees working in enterprises that use a CRM
(customer relationship management) software to organise data about
their customers electronically
D.3 Enterprises selling at least 5%
of their goods & services online
= the percentage of employees working in enterprises saying that online
sales via the internet or other online networks (for example via an
extranet) constitute at least 5% of their total sales volume
D.4 Use of specific IT solutions for
marketing and sales processes
= the percentage of employees working in enterprises that uses specific
IT solutions to support marketing and sales processes
e-Business Interoperability
89 September 2005
Results: sectors in comparison
The e-Business Scoreboards visualize that the nature and impact of electronic business differs widely
between sectors, particularly between manufacturing and service sectors. There are several
underlying reasons; for example, the nature of e-business activities depends on whether the focus is
on B2B or B2C.
Manufacturing
· Among the 7 manufacturing sectors surveyed, electronic business activity has reached the
highest level of intensity in the automotive, pharmaceutical and aeronautics industries. The
rapid development in these sectors is mostly driven by the large international companies.
Supply-chain integration and the streamlining of procurement processes are common
objectives in these industries for which e-business solutions are attractive. In the machinery
and equipment industry, electronic business activity has not yet reached the same level of
intensity. At first sight, this confirms the findings of the Survey 2003. However, developments
in this sector have been quite dynamic since then. For example, e-business is increasingly
recognized as a useful means of providing customer service.
· The publishing and printing industry has a different e-business profile, as major segments of
this sector operate in B2C markets. ICT has a considerable impact on production and internal
work processes. Furthermore, customer-facing activities (online publishing, marketing,
advertising) are critical. On the other hand, processes with a high e-business potential such as
inventory and supply-chain-management are less critical in this sector.
· The food and beverages sector, and the textile and clothing industry, are late adopters of
ICT compared to the other manufacturing sectors studied. However, in the food and
beverages industry, there are signs of increasing e-business activity, mainly in response to
structural changes and new requirements. Important issues that promote e-business are food
safety and the digital integration of the value chain. RFID (Radio Frequency Identification)
based technologies could play an important role in these areas.
Construction
· ICT adoption and e-business activity in construction companies appears to be very limited
compared to most manufacturing sectors. The structure of the industry, which includes many
small craft companies, cannot fully explain this gap. An industry with a multitude of standards,
technical specifications, labels, and certification marks is not an optimal forum for drawing
benefits from electronic business. However, e-business tools have the potential to benefit
complex construction projects where there is a need to coordinate a large number of sub-
contractors.
Service sectors
· The computer related services sector is a special case with regard to e-business. Although
companies in this sector have Information Technology and e-business as their end product,
ICT also plays a significant role in the way that this product is produced, promoted and
provided. This specific way of using ICT distinguishes the IT services industry from the other
sectors analysed by the e-Business W@tch. Here, in this sector the use of ICT and the
production of related services are difficult to separate from each other.
· The IT services sector shares a common feature with tourism: in both industries, online
channels have become key tools for marketing, communication and interaction with
customers. In tourism, online booking and reservation services have been widely accepted
among consumers and business travellers, and "e-tourism" has truly taken off. However, the
great importance of ICT in this sector is not properly reflected in the e-Business Index. The
main reason is that e-business normally does not have the same significance in supply-side
activities and internal work processes (for example in hotels), as in manufacturing sectors.
e-Business Interoperability
September 2005 90
e-Business Scoreboards for 10 sectors (2005)
Food and beverages
-1,7
0,0
1,7
A
B
C
D
Max Average Food
Textile and clothing industry
-1,7
0,0
1,7
A
B
C
D
Max Average Textile
Publishing and printing
-1,7
0,0
1,7
A
B
C
D
Max Average Publishing
Pharmaceutical industry
-1,7
0,0
1,7
A
B
C
D
Max Average Pharma
Machinery and equipment
-1,7
0,0
1,7
A
B
C
D
Max Average Machinery
Automotive industry
-1,7
0,0
1,7
A
B
C
D
Max Average Automotive
e-Business Interoperability
91 September 2005
Aeronautics
-1,7
0,0
1,7
A
B
C
D
Max Average Aeronautics
Construction
-1,7
0,0
1,7
A
B
C
D
Max Average Construction
Tourism
-1,7
0,0
1,7
A
B
C
D
Max Average Tourism
IT services
-1,7
0,0
1,7
A
B
C
D
Max Average IT services
Source: e-Business W@tch (e-Business Survey 2005)
e-Business Interoperability
September 2005 92
e-Business Index for 10 sectors (2005)
(Compound Index of 16 component indicators)
Benchmark based on firm-weighted data
1)
(indexed values: highest score = 100)
100
71
67
58
53
48
45
39
31
29
0 20 40 60 80 100
IT services
Aeronautics
Pharma
Automotive
Tourism
Machinery
Publishing
Textile
Construction
Food
Benchmark based on employment-weighted data
2)
(indexed values: highest score = 100)
100
98
95
87
72
69
58
54
54
36
0 20 40 60 80 100
IT services
Automotive
Pharma
Aeronautics
Machinery
Publishing
Food
Textile
Tourism
Construction
1) Firm-weighted data express e-business adoption as "% of firms in a sector with a certain activity", irrespective of the size
of the companies (i.e. small companies and large ones count equally). Results are mainly determined by the situation in
small firms, as there are many more small companies than large ones in the population of enterprises.
2) Employment-weighted data express e-business adoption as "activity in firms comprising …% of employment in a sector",
thus emphasising the situation in larger companies.
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