Breaking News: GXS and Inovis Sign Definitive Merger Agreement

GAITHERSBURG, MD and ATLANTA, GA — 12/08/09 — GXS and Inovis, leading providers of business-to-business (B2B) e-commerce services and software solutions, today announced that they have signed a definitive agreement to merge. Inovis brings with it approximately 16,000 customers from a range of industries including retail and consumer products, financial services, transportation/logistics and automotive. The combined company creates a leading global provider of B2B e-commerce services and gives the company an even greater global presence.The merger of GXS and Inovis will further streamline customers’ global B2B deployments and provide them with a comprehensive range of B2B integration software and services-based solutions. GXS is a leading B2B e-commerce services provider with a strong focus on helping customers optimize their global supply chains through its software-as-a-service (SaaS) and software-based portfolio that includes B2B messaging services, supply chain visibility, product master data management and B2B Gateway software. Inovis is a leader among B2B Gateway software providers and has a strong portfolio of complementary software and services including managed file transfer, supply chain visibility, product catalog, B2B Gateway and multi-enterprise master data management software.

“Today’s merger announcement marks a turning-point in the B2B e-commerce industry,” said Bob Segert, president and CEO of GXS. “GXS sees strong potential for further growth in B2B managed services and B2B integration software. This demand must be met by a company with a diversified portfolio and global scalability. The combined company will bring together a leading provider of B2B services, GXS, and a leading provider of B2B software, Inovis, into one, giving customers an invaluable portfolio for all of their global B2B e-commerce needs. Over the next few months, we will be focused on supporting our customers, reviewing our broad portfolio and providing the most reliable and scalable B2B platform available.”

GXS and Inovis expect to close the merger in early 2010, subject to regulatory review. During the merger closing process, all services and solutions will continue to be supported and sold. The goal of any integration activity will be to provide customers with a well-informed, seamless, managed transition with no business interruption. The company’s goal is to give customers capable, reliable, high-performance solutions for all their B2B e-commerce needs.

“Both GXS and Inovis are industry pioneers with proven abilities to serve world-class customers,” said Sean Feeney, president and CEO of Inovis. “The complementary products of these two companies create significant value for customers that are seeking a single global provider for B2B e-commerce. Both companies share a passion for raising the bar on innovation and operational excellence and have the specific industry knowledge needed to help our customers achieve true, seamless integration with business partners located anywhere in the world. This merger is a big step forward in the evolution of the B2B e-commerce industry.”

GXS was advised by Barclays Capital and Citibank on the transaction. Inovis was advised by Kirkland & Ellis and BofA Merrill Lynch on the transaction. Further details on the merger of GXS and Inovis can be found here: www.gxs.com/inovis and www.inovis.com/gxs.

About Inovis

Inovis offers software and services that enable companies to do business electronically across their entire trading community. Each day, over 16,000 companies across the globe rely on the Inovis platform to reliably send and receive purchase orders, synchronize data and manage exceptions in order to lower supply chain costs and get products to customers faster. Founded in 1983, the company is based in Alpharetta, Georgia and has offices around the globe. For more information, please visit www.inovis.com, read our blog at http://blogs.inovis.com, send an email to info@inovis.com, or follow us on Twitter at http://twitter.com/inovis.

About GXS

GXS is a leading global provider of B2B e-commerce solutions that simplify and enhance business process integration and collaboration among trading partners. Organizations worldwide, including more than 70 percent of the Fortune 500, leverage the on-demand services on GXS Trading Grid® to extend supply chain networks, optimize product launches, automate warehouse receiving, manage electronic payments and gain supply chain visibility. GXS Managed Services, GXS’ B2B outsourcing solution, empowers customers with the expertise, technical infrastructure and program support to conduct B2B e-commerce with trading partners globally.

Based in Gaithersburg, Md., GXS has an extensive global network and has local offices in the Americas, Europe and Asia-Pacific regions. GXS can be found on the Web at www.gxs.com, http://blogs.gxs.com/ and http://twitter.com/gxs.

All products and services mentioned are trademarks of their respective companies.


Slow down, you move too fast…

… or something like that…  The title comes from an old song by Simon & Garfunkle, a “folk-pop” duo from the 60s and 70s…  They gave us a LOT of hit records in their years together – and Paul Simon certainly had a string of hits after they split.  Art Garfunkle didn’t do as well, but he still stayed busy and active in the recording industry.

I always think of the old adage about “stopping and smelling the roses” when I think of that old song (BTW, it’s “FEELING GROOVY”)…  Which then leads to thinking about “tunnel vision”…  And all of this came up today because of a comment made to a previous post that fairly SCREAMS “sales pitch!” and … well, I’ve never been a fan of the heavy-hitting sales pitch.

Years ago, I actually was in sales – I was selling new (and used) Chrysler and Plymouths for a dealer in the San Francisco Bay Area.  This was in the late 80s and I only did it for a few months.  I had to get out of there because, while I love cars – I’m a certifiable car nut – I couldn’t deal with all of the high-pressure tactics that so many sales people used.  It actually kind of shocks me to think about how many of the same sales tactics and ploys are still being used in 2009 – over 20 years later!

It’s these “hard sell” tactics that got under my skin today.  Somebody read a blog and thought it would be a great opportunity to use a comment back on the blog to push their product – which is a service, really – as an outsourced EDI program.  Software As A Service (SaaS) has been buzzing around for the past few years and is really taking hold in any MIS/IT environment you can think of…  And it’s also always being pushed in the EDI world, for sure.  So many companies have been making many dollars on offering outsourced EDI processes….

And please don’t misunderstand me with this blog – I certainly know the value of SaaS – especially when it pertains to EDI – but what got to me was more of how some people don’t seem to think of how EDI is being used (or has been used) by a company when they “sales pitch” their solutions.

As I said, there are a great many companies out there that offer “outsourced” EDI solutions.  Some may be known to you, others may not.  There’s companies like SPS Commerce, DI Central, Red Tail Solutions, EDI Direct, Direct EDI, ACT, and more and more and more.  Even many of the “big VANs” offer some kind of SaaS EDI solution…  Inovis has their webforms product which, in a minor way, can compete with their own VAN services AND their software (TrustedLink)…

Outsourced EDI (aka SaaS) can be highly beneficial to many a company when it comes to EDI processes.  You could be a small supplier of (dare I use it again?) Widgets to a bunch of retailers – big and small.  By having a way to process EDI documents, you can sell to the big retailers (WalMart, Target, and so on) and also to the smaller and medium sized retailers (local chains and single outlets) that also are EDI capable.  Having an outsourced EDI program (SaaS) can elevate you up to play with the big boys, but still keep your overhead low and complexity down at your “small boy” level.

Take a look at normal  VAN services, for example.  Depending on your volume of data being transmitted, you can pay (easily) thousands of dollars a month for your VAN connection – to be able to send and receive your data.  Costs can range from just a few cents per KC (Kilo-Character) to maybe as high as 25 cents per KC…

Then there are the costs of buying and implementing an application.  A simple and yet exceedingly effective product like Inovis’ TrustedLink can cost you thousands of dollars – tens of thousands – to purchase and put into place.  Then there’s the aspect of yearly maintenance and licensing agreements and support – again, thousands to tens of thousands of dollars…  So, for a small business, that can be a BIG chunk of change… 

Based on just these two costs alone, SaaS EDI is making a lot of sense.

But here’s where the sales pitch can rub the wrong way.  Let’s say that, instead of being a small fry, you’re a really big fish in the world.  You don’t just make widgets, but you also make all sorts of other products and have multiple locations and divisions around the country … or even around the world.  THIS is where SaaS EDI can be less of a benefit for you.

To a major retailer – like a WalMart or Target – or to a major manufacturer/supplier – like Mattel or Nike – these costs are very small potatoes.  They already have good sized MIS/IT departments and can easily afford that big outlay for the EDI platform AND the monthly VAN costs AND whatever other costs come along.  Oh, and they can easily manage it all “in-house” and have it all easily integrated into their ordering and accounting and warehousing (and whatever other) applications they use.  It’s more direct-connect EDI – retailer to supplier – with just the VAN service in between. 

This is not to say that SaaS can’t be used in the same way.  But it can surely slow down the process just a bit and it also takes a lot of control away from you – as a big guy.  As a big guy, you’ve got more at stake and more reasons to keep it in-house and not oursource your EDI.

A few years ago, a good pal of mine that works for Disney, related to me how Disney decided to “outsource” their internal help desk/tech support functions.  Now, for those not in-tune with “the House of Mouse”, Disney will generally make a lot of changes to their applications – including naming them after Disney characters – and train their people how to use “their” systems, their way.  So instead of using, say TrustedLink, the EDI person knows it as “Minnie” … or “Daisy” … And their version of Oracle or SAP may be called “Goofy” and “Pluto”.  Imagine the trouble when tech support guy Bob at “TechSupport R Us” gets a call from Walt at Disney, telling Bob that he’s got a problem with “Mickey” or “Donald”…

Oops!

When I first started with the retailer I was working for, I started off in the tech support office, helping users do what they  needed to do – use the system.  And it would often amaze and bewilder me how many of those users didn’t actually KNOW what they were using.  They’d submit a job or run a process with some variables.  But, when they were trained to use the process, they were told “oh, don’t worry about those questions, just hit enter” and they’d page through a number of variables and parameters that were defaulting to the proper response for the job.

But, just like Walt at Disney having issues with Mickey, the users didn’t know how to answer the questions that Bob may have asked.  Because Walt didn’t know the answers.  And Bob didn’t know how Walt used the program.

This can also happen when you start working with SaaS and outsourced EDI – and other applications.  You can save some money and maybe even some hassle, but you then may get into a situation where the company you’re getting that Software as a Service from doesn’t really know or understand how you’re using it.  And you may not understand exactly what that software is doing.

With that retailer I was working with expanded the EDI program to include the 810 invoice, there were a number of vendors and suppliers that used “outsourced EDI” to receive the PO and send back the ASN.  And now they’ve got a new document to send – the invoice.

Where the trouble came from, however, was in how that SaaS solution was packaged and maybe – just maybe – some of the users didn’t understand about what they needed to put into a certain field so that the retailer would be able to process the inbound 810 properly.  Maybe in the field marked “description” – they’d put a description of the product they were shipping instead of realizing that they were on a page devoted to “terms” and should have (instead) put a description of the terms of payment of the invoice.  So you saw “widgets” instead of “Net 60″….

This is where SaaS solutions can fall apart and not be right for everybody.

And that’s really what my problem with the sales pitch was about – that here’s an offer being pushed and yet the pusher doesn’t even know what the problem really is.

When I was selling Chryslers all those years ago – I made it a priority to know what the customer was looking for – an economical commuter – and steer them towards a Plymouth Colt or Sundance, rather than trying to push them into a fully loaded (and quite the gas guzzling) Chrysler 5th Avenue. 

It’s also kind of like what I do here – when I’m writing and blogging – in that I kind of know the target audience – people that are in the EDI world – and I talk about EDI issues and problems and concerns, rather than trying to talk to you about how to grow perfect Peonies or resplendant roses or telling you how to bait that hook to catch the biggest mackeral or trout in the lake.

It’s all about knowing your audience and not making some wild pitch and moving way too fast for your intended…

Going Back In Time

Jim Croce sang once about “… if I could save time in a bottle…” – and I just wonder where time goes…  Yes, it’s been a LONG time since you’ve seen the crazed writings I create on these pages. 

Has the silence been golden?

Of have you been secretly pining away for more wit and wisdom from the one and only; is it writings from this one that you have been yearning for…?  Or do you really just not care one way or the other and you’re just about to go read something else…?  I guess I’d better get to the topic, huh?

I know its ground I’ve covered before, but it’s still a fertile field to … darn, what’s a good word for plow that starts with an “F”…?  How about farm…?  It’s still a fertile field to farm…  There.  I got some alliteration in.

But I’m rambling on (again?) about changes and not doing things the “new” way because it’s too difficult.  Or it requires us to think of a different way of doing things that maybe – just maybe – we don’t want to think about.  It’s about adapting to change and dealing with the change that comes along as newer (and better?) ways of doing things come along.

OK… since the last time we talked, the economy has tanked and slid way down the scale… Retail sales are way off from just a few years ago and some retailers have gone the way of the Eagle and the Plymouth – they’re gone and not forgotten, a lingering memory of their products still firmly entrenched in the minds of many.

By the way – the retailer I work for is not doing horribly bad in this economy sink… Mind you, our sales aren’t growing – much – but we were only down about 4% from last year…  Some days we’re up, some days we’re down, but we’re certainly not out of the game…  Truly, if we can last out this recession, we’ll be doing pretty well.

There’s this one vendor of ours that we buy a LOT of stuff from.  And I’m not just talking about the quantities we buy from them, but even across the product lines.  We have thousands of SKUs that we buy from this vendor.  And they’re shipped directly to the stores.  We use a module within our merchandising system that can track sales and generate POs based upon last year’s sales trends.  From that data, we can create POs – one for every store – that are pretty accurate.

“How does this pertain to EDI?” you’re probably asking.  And I’ll tell you.

Each of those orders we’d generate for each of the stores was sent via EDI to the vendor, who would then fill each and every of those orders and ship the products (generating an ASN for each) and then even (now) invoice us for each of those orders.  On a monthly basis, that could save the “manual” creation of about 400 Purchase Orders.

Good stuff, eh?

But now, it seems, we’re no longer doing that.  Instead, that vendor is going into each and every one of our stores and seeing what’s needed on the shelf and stocking those shelves and then sending us a list of the items they put on the shelves and we then generate the PO (after the fact) and send the vendor the PO number (but not the actual PO) so that they could update their system (manually) with the PO number so that they could then process the invoice.

All the wonders of our working system – with minimal manual intervention – are now buried and – poof, they’re gone.

We’ve gone from that super economical, safe and efficiently powerful car of the current decade and we’re driving some 50’s era heap without even the comforts of a radio or air conditioning, let alone all those safety advances of the last 50 years…

And why?

That’s what I’m spending a lot of time today trying to figure out…  Why did we abandon this system that was working well for a number of years and go back in time to a manual process that lends itself too well to errors, mistakes and “oops” events?

Isn’t that one of the key benefits we’ve all used to push EDI into our companies and grow our EDI programs by adding new documents and vendors to the system…?  One of the key goals of processing orders via EDI has been that it helps to eliminate much of the possibility of wrongly keyed data…  If there’s an error, we know it’s probably going to be before the document was sent via EDI.  It was keyed in the beginning and then was never caught and flowed through the process from start to finish.

*sigh.  It’s just so … negative … and so disheartening to the way I’ve been thinking and working over the past few years.  To see all those positive changes being swept away and all of these negatives taking their place.  It’s like watching the past 8 years of the Bush Presidency all over again, but on a smaller scale.

OK, that was a cheap shot across political lines – but it can be viewed as a valid analogy.  But I’ll let it slide and not really give you the details of the way I’m thinking.

But, again, here we are, creating orders and getting errors in return.  Wrong PO numbers, wrong store number entries, wrong items sent and other errors.  And who’s to blame; is it our fault or the fault of the vendor?  Probably a bit of both; but I’m the retailer, so I’ll blame them.

I’m still trying to figure out from the buying department why they’ve changed their processes…  But I don’t want to sound like some whiner…  So I’m taking “other” routes – using different people in different departments – to do that dirty work.  I’d like the guy that’s now taken over that automatic process we were doing before to “suggest” the orders and create the POs from; I’m asking him to find out why they’ve stopped with the process.

And I want to know why we’re not sending those orders via EDI anymore.  I mean, if it’s because the vendor would end up “doubling” the order, since they’d already supplied it to the store, then it’s really on the vendor to make the changes in their system – to get the list of EDI POs and find that they already exist in their system and change those existing orders to use the POs we’ve sent over via EDI.

I mean, somebody is already taking those existing orders and modifying them to add the PO number in their system so that they can send us the ASN and the Invoice via EDI.  So why would it be difficult for them to take the EDI generated orders and NOT ship them and populate some table or file in their system, generate a report from that data and then manually process those changes…?  Or even handle it through a program that would go and search that file that they populate from our EDI data for a “key” bit of information – such as the store number – and then change their order to add the PO number.

Of course, there’s another way that we could do this, too.  We COULD receive an EDI document – like the 852 – and process it into an order that is then turned around as the 850 back to the vendor.  I mean, that’s what we’re doing manually as it is – we’re taking their suggested stock levels and numbers and creating a PO off of a file (usually an excel spreadsheet) they send us.  What’s the difference if it’s sent as and 852 via EDI or sent as a flat file as an e-mail attachment?

The times, they are a-changing and we’re not going “Back To The Future” – but we’re going back in time, to the land that time forgot.

Author: Craig Dunham – EDI Coordinator
Read more about Craig here:
http://editalk.com/contributors/

Unemployed? Don’t move here…

I just read this article – well – a pair of articles – over on MSN – about the 25 WORST cities for finding a job and the 25 BEST cities for finding a job.  Truly interesting stuff; however the methods used to create the article are – at best – flawed.  The flaw is that they only use the unemployment rates, as compiled and published by the Bureau of Labor Statistics – a federal agency that is responsible for researching and compiling labor economics and statistics…

The list of the bad cities includes quite a few cities located in California.  But if you were to look at the list – and if you’re not from California – you’ve probably NEVER heard of many (if ANY) of those cities.  Here’s the list:

1.    El Centro, Calif.       
2.    Yuma, Ariz.               
3.    Flint, Mich.               
4.    Merced, Calif.
5.    Yuba City, Calif.      
6.    Modesto, Calif.      
7.    Visalia, Calif.            
8.    Monroe, Mich.
9.    Palm Coast, Fla.      
10.  Stockton, Calif.         
11.  Fresno, Calif.             
12.  Bakersfield, Calif.
13.  Hanford, Calif.          
14.  Redding, Calif.          
15.  Muskegon, Mich.    
16.  Jackson, Mich.
17.  Rocky Mount, N.C.
18.  Saginaw, Mich.         
19.  Madera, Calif.           
20.  Detroit
21.  Elkhart, Ind.               
22.  Sebastian, Fla.          
23.  Kokomo, Ind.            
24.  Rockford, Ill.
25.  Niles, Mich.

11 of them are from California.  But, of those 11 – only one is NOT located in the Central Valley area of California.  And the biggest (and almost only!) jobs in most of those cities are related to farming and agriculture.  And some of them are downright tiny cities.  And they’re surrounded by miles and miles and miles of … well … nothing. 

Most of the cities listed that are in the mid-western areas of the US – like Indiana, Michigan, Illinois – are areas that have industries tied deeply to automotive industries and – an even more beleaguered segment – RV manufacturing.

Let’s face it – political statements aside – the economy sucks all over…!

Now the 25 “good cities” many tend to be … well, mid-west centered, too.

1.   Sioux Falls, S.D.           
2.   Idaho Falls, Idaho       
3.   Rapid City, S.D.            
4.   Bismarck, N.D.
5.   Houma, La.                    
6.   Morgantown, W.Va. 
7.   Logan, Utah                  
8.   Fargo, N.D.
9.   Casper, Wyo.               
10. Billings, Mont.           
11. Lafayette, La.             
12. Ames, Iowa
13. Midland, Texas 
14. Iowa City, Iowa         
15. Lincoln, Neb.              
16. Great Falls, Mont.
17. Charlestown, W.Va.
18. Des Moines, Iowa   
19. Portsmouth, N.H.    
20. Missoula, Mont.
21. Salt Lake City              
22. Provo, Utah                
23. Sioux City, Iowa        
24. Odessa, Texas
25. Pocatello, Idaho

Sure, there are a few standouts in the North East and the South, but many of them are solidly Mid-West cities.  Of course, they’re also cities that, if you research them more, you’ll find they’re pretty stable cities with no great industrial claims.

Truly, outside of a religion, what does Salt Lake City hold a claim to – industry wise …?  And Casper, Wyoming and Billings, Montana – what’s going on there?  Besides being near major National Recreation areas, what industry calls those cities home?  And, as for Texas, Midland and Odessa are right next to each other (geographically speaking) and so the “gains” in one will be similar to the gains in the other.  But again, what’s their industrial base…?  Where are those job gains…?

But even then, the growth isn’t anything … huge.  Not anything like the high unemployment numbers for the California and Michigan cities.

But, again, the basic study – the reasons behind the articles – is flawed.  It gives a decidedly myopic view of things… And an exceptionally dire one, at that!

Why?  Well, it’s because they’re only looking at one single point of data – the unemployment rate.  That’s it.  Nothing about the industry that supports the area, the number of residents that do not work anyway (i.e. retirees, stay at home parents, whatever).  They don’t look at the kinds of jobs in the area – from flipping burgers at Burger King, Carl’s Jr. or McDonalds to legal secretaries, doctors, nurses and other types of “skilled labor”…

Take a look at St. Louis, for example.  They’ve got a lot of industries there – from auto manufacturing to hospitals to finance…  They’re all over.  But what does Ames, Iowa offer in the way of industry…?  What kind of jobs are even available in Ames…?  Do you think that there is a lot of call in Ames for an EDI manager…?  Or some other kind of IT position…?

That same flaw – the single source of data and the single point of data being used – can also be a major flaw in our EDI system and what we do with those documents.   What good is an EDI system that only processes a single document for a single department for a single trading partner…?  How does that improve your supply chain or your business…?

Opening up your focus – whether by the data you want to trade or by the “who” you want to trade with – can make your EDI world that much better.  That much more … well … impactful and worthwhile… leaving your EDI program just focused on one thing does not make it very useful information.

It’s like the articles I reference above – how valid is that information to you if you want to move to Sioux Falls, South Dakota and – while there is low unemployment and some growth in their job market – there is not a job for you to take…?  If you’ve achieved your MSCSE certificate, but there are no jobs for people with your abilities and qualifications, of what value is the fact that Sioux City has low unemployment..?

Or – on the flip side – you’re moving to Bakersfield or Fresno to take care of an ailing family member – but you’ve already got a job lined up – in your field of expertise – so the high rate of unemployment doesn’t matter to you.

Job futures – and EDI – need to be … far ranging and “big picture” – taking into account a lot of smaller details.  It can’t just be focused on one little fact or figure.

There’s that big retailer – WhoM shall remain nameless  – that is always the Target of the wrath and ire of many an EDI “guy”.  Those that deal with that big retailer (or the other one) know that they seem to be “our way or the highway” kind of mentality.  Do it our way or we’re not doing business with you.  It’s a very limited eye view of EDI.  It doesn’t allow for any deviation or options.  It’s this or nothing.  It’s one sides and just one point of reference.  It’s very limiting.

Now, in some ways, that limited versatility may be good – in that there’s not a lot of “extra stuff” to worry about.  Just like the one point of reference in the jobless rates in those cities – not a lot to worry about.  There aren’t many (any?) jobs, so don’t go there.

But isn’t it better when you have more to work on than just one number; or one point of view or one way of thinking…?  Where’s the value then?

Author: Craig Dunham – EDI Coordinator

Read more about Craig here: http://editalk.com/contributors/

I’ll gladly pay you Tuesday for a hamburger today…

On another one of My readling places – the EDI-L group on Yahoo – and the topic came up about “who pays” for what…  The topic-starter was looking for some kind of “best practices” in the EDI world when it comes to new implementations.  I think a lot of the people are viewing this from the “dating” point of view – that the person who asks for the date is the one that pays for the date…  Basically, if I was to call you up and ask you to go out with Me to dinner and a movie – or drinks and dancing – or supper and se…  wait, keep that one quiet… anyway, if I’m doing the asking, I should be doing the paying…

But that’s not truly the case when you’re talking about EDI.  When it comes to EDI, I’m doing the asking – “Hey!  I’d like to send you our PO and get an ASN and an Invoice back, electronically.  Are you game?” – but you’re doing the paying…  At least in My world – the world of retail trade.  I’m requesting you to change the way that we do business and accept My orders for your products electronically – instead of via fax or mail or carrier pigeon or crazy, downtown bike messenger – which will, in turn, save us both money (money, money, money… it’s a rich man’s world!), because we’ll be able to get rid of some of those leased phone lines (for the fax) and cut down on postage (the mail), nearly eliminate our budgets for bird seed (the pigeons) and harrowing clean-up expenses from those sweaty Lycra clad bikers…  It will also save us money because we won’t have nearly the same kinds of expenses for error resulotion when an order is keyed in wrong by that pretty – but dense – eye-candy and boss’ kid data entry operator over in customer service…   

Now I’m not saying that all (or even most) data entry people in customer service are dense – or lack-luster kids of bosses – but you know what I mean…

All it can take is just one key-stroke to completely alter an order.  I’m ordering, for example, 1000 Widget A (style W-A1) in blue (color 001) and it gets keyed as 10000 Widget 1 (style W-1A) in black (color 010).  You can see how easy it is to muck up an order with just an extra ZERO (10,000 instead of 1,000) or transposed data (style A1 vs 1A – or color 001 vs 010)…  We NEVER sell your black Widget 1, as nobody orders that from us.  And even if we sold a few – just because they’re new and novel – we still have over 9000 of ’em in stock and what-the-hell-are-we-gonna-do-with-’em…?  So we submit an RTV request and you pay for shipment of the goods back and you credit us the difference and so on and so forth….  It’s all on your side of things.

If the order had been sent via EDI, the order goes in as we sent it – 1000 qty W-A1 in 001 – no muss, no fuss, no errors… unless they’re on OUR end.

But I’ve gotten a bit far afield in the details again.  Back to “who pays” for EDI….

In the retail world, I’m a HUB.  I’m the guy sending the orders and receiving the product and selling the Widgets on to the wide and wildly waiting world of Widget wovers…  LOVERS…  I’m the guy in the driver’s seat.  I’m telling you (via My 850 PO spec) that I’m going to send you an order and it’s going to contain this information and this other information and, oh-yeah, that other information over there.  And I’m going to request – no, REQUIRE – that you send Me an 856 ASN when the order is ready to be shipped.  AND I’ll accept your 810 Invoice electronically – again, all in the name of ease and cost reductions and error management.

Basically, it’s a cost of doing business… for YOU.  My costs of doing business are having a chain or stores (ok, maybe just 1 – Wally’s World of Widgets for Widget Lovers – hey!  got it right!) and hiring employees and buying cash registers and store fixtures and paying for ads in the local paper and rent on a location and all the other things that go along with it…  Sure, you could justify that it’s a cost of doing business for Me, too, but you need to think of it differently… You need to put yourself into My shoes…

So you’re Willy’s Wacky Widgets – and you make and sell a wonderful array of widgets… different colors, sizes and shapes… and you sell those widgets to your customer base – Widget retailers.  You sell them to Wally, Wayne, Wanda, Wu, Wendy, Weaver and Bill…  That’s William.  Then it’s the job of Wayne, Wally, Wanda, Wendy, Wu, Weaver and William (Bill) to sell the widgets to the final customer – Wilma, the world’s most well known and renowned Widget owner, who lives in Walla-Walla, Washington. 

Now, in this, you’ll notice something – we’re both selling a product (widgets) to a consumer (you to Me and Me to Wilma).  Of course, you’re a wholesaler of widgets and I’m a retailer.   The only difference is the price.  But, see, I’m your customer.  Without Me, who would you sell your widgets to?  You don’t sell them directly to Wilma (although, of course, you could!), but without Me – you’ve got no customer base.  So you sell to Me – your CUSTOMER.

And the fact that I’m your customer means a lot.  In the retail trade, there’s an old axiom:

1 – the customer is always right.

2 – when in doubt, see rule #1 (above).

Basically, it means that the customer – Wilma to Me and Me to you – is the one that is truly driving the transaction.  Wilma has the cash to buy the widgets from Me and I’ve got the cash to buy them from you.  You, on the other hand, have the knowledge, equipment and supplies to create and provide those widgets to Me so that I, in turn, can provide them to Wilma in Walla-Walla and make her wonderfully happy.

The cost of the EDI – the testing, compliance, implementation – are yours.  At least for your side of things.  I wouldn’t expect you to pay for My set-up fees and implementation costs – as they’re a cost of doing business for Me.

Let’s spin this off in a slightly different direction – you package the widgets 50 to a carton.  That carton is a cost of doing business for you.  Are you going to charge Me for that carton?  Don’t think so.  Instead, you’ve figured a way to build that cost of the carton into your overhead – into your manufacturing costs – so that you’re covered for those costs. 

But you say “Hey!  Hold on now!  Wait a minute!” and you tell Me how I’m still paying for those cartons – in that I pay 1/10th of a cent for each widget to cover your costs of the cardboard cartons.  And, sure, you have a point – but it’s not truly a cost of doing business for Me.  It’s just part of the cost of the goods I’m buying – just like My overhead for the chain of widget stores is figured into the price I’m selling that widget to Wilma for in Walla-Walla.

So in the “who pays for what” equation, YOU pay for the costs of implementing and doing EDI with Me – just as I pay My side of those same costs of doing EDI with all of My suppliers and vendors.  I’m the 800lb gorilla in the room – I’m the one that has the control- or at least more of it – in this deal.  I’m the hub, I call the shots, I’m the driver.

At least that’s how it is in the world of widget retail.  But, as I’d posted over on the EDI-L group, it’s probably more of an “industry specific” kind of thing – that healthcare has different practices (best or not!) than retail has and they’re different from banking/finance which is different from universities and eduction which is different from … well, you get the idea, right?

So, on to your side – who pays for what…?  And where are we going to dinner…?

Author: Craig Dunham – EDI Coordinator
Read more about Craig here: http://editalk.com/contributors/