penny wise, pound foolish…

The old saying used as a title for this blog relates back to an earlier and simpler time – before EDI, that’s for sure – and relates to British currency.  They have the Pound and the Penny and even a Half-Penny, too.  But this was all brought about by topic in the Inovis Trusted Link group (over on Yahoo!) that got Me to thinking about AS2 and costs and related things – again.  Not that I think about AS2 a lot, but…

But what being “penny wise and pound foolish” means (basically) is that your so concerned with the pennies and how they’re being spent, you kind of lose sight of how you’re spending your pounds.  Or dollars and cents…  It’s all pretty much the same.  But it’s all about being so concerned with the small stuff – the petty details – that you lose sight of the BIG picture – the final outcome.

Anyway, the original poster over there was wondering on where he could receive some “AS2 training” – and everybody then kind of went off into the “oh, we use ______ for our AS2 connection and love it!” kind of comments – but very few seemed to offer an answer to the poster about his question – AS2 TRAINING.

Like there is such a thing!

“But, wait!” You say.  “What does this have to do with being ‘Penny wise and pound foolish’?”  I’m getting there, I’m getting there.

Seriously, though, let’s take a look at what AS2 really IS.  It’s a method of communications.  It’s a way to connect.  In a nutshell, AS2 is (from Wikipedia):

“Applicability Statement 2 (AS2) is a specification about how to transport data securely and reliably over the Internet. Security is achieved by using digital certificates and encryption.”

I kind of liken AS2 to DSL/broadband connectivity for surfing the net vs. the “old” dial up that is BSC.  It’s connecting to our trading partners via the same protocol that governs the Internet – the place we surf, download and blog – Hyper Text Transfer Protocol (HTTP).

And did you really need any kind of “training” when you started using your DSL – or your wireless broadband or your cable modem or your ____ connection to the internet…?  Nope.  There’s not really a whole heckuva lot to learn.  Other than a “how to hook up your new AS2″, there’s not a much there.

Data goes in, data goes out…  Just like the Itsy Bitsy Spider…  Or the waves, crashing to shore…

But back to AS2 and what it’s all about.  AS2 is just a way for us to send data over the internet connection (HTTP) from one system to another.  No muss, no fuss, no bother.  And in some cases – or as many would lead you to believe – at no cost.

But, wait a minute!  Hold on there!  There ARE some costs involved in AS2 communications…!

When it comes to communications – sending our EDI information back and forth – so many people seem to focus solely on the concepts of the “per KC charge” or fee structure for trading data.  Inovis, GEIS, AT&T, Sterling, ICC, and all the rest, charge us (generally) a flat fee for each KC we send or receive.  Depending on how you’ve set up your contract, you may get a flat fee – say, $4000.00 a month – for a flat amount – say 50,000 KCs – of data you send or receive.  Then, after that, they charge you an “over-limit” fee of 5 cents a KC – or more or less – depending upon your contract.

With AS2, those KC charges all go far, far away…  But, what so many seem to forget – or if they’re selling – want you to forget – are the OTHER charges that can be and are associated with AS2.  Depending on what system(s) you may use to translate and transmit your data, there could be some licensing fees associated with setting up AS2.  Maybe, just maybe, your software provider allows one AS2 connection for “free” but charges a license fee for each and every AS2 connection over and above that “freebie”.  Some may not even have AS2 built into their system and you need to “add” programs or modules to your EDI application to get AS2 connectivity.

Then you get to think about the wondrous wonder of the Internet and connectivity – BANDWIDTH.  If you have a narrow “band” for your Internet connection, then this additional data may clog that tunnel.  Just think of the scenes from “Independence Day” and how Will Smith’s girlfriend (fiancé?) was caught in the tunnel as Los Angeles was being blown to bits by the invading alien horde and her and her kid and the dog were trapped in the tunnel as the fireball of alien laser energy was blowing LA apart.

Now, while your bandwidth may not be as limiting as a 2 lane tunnel in LA, it can still have some limits.  And congestion in your tunnel may not be as dire and deadly as it was in “Independence Day” – lives may not be wiped out in seconds.  But it can cause you problems with your ISP if they only give you a limited bandwidth per month.  Now you’re over and you’re getting charged for that overage.

Then there’s the concept of labor…  And right after Labor Day, too.  But there is the cost of the man-hours (or woman-hours!) it takes to set up those connections and maintain those connections.  It may only take a few minutes to set up those AS2 connections and maybe a few more to test that connection, but there are still some costs involved.  And then what if Jane AS2 Master quits and you hire Joe EDI Master who knows NOTHING of AS2 and has to learn by the seat of his pants, on the fly, as he goes along?

Plus, here’s another wrinkle in the smooth fabric of cost – wrong, bad, or error data…  Let’s say that ABC Company’s newest shipping clerk created a shipment (and, therefore, generated the ASN) for a shipment, but missed an entire pick-sheet of cartons in the truck or container.  Once he’s hit send (or whatever) and that shipment notification is generated, he can’t go and fix it – without RESENDING that ASN – corrected, of course.  So now you’ve got 2 documents – one is missing information that the other document contains.  Sure, if the EDI system at ABC Company is set up correctly, that new ASN is sent out as a replacement, but how does YOUR system handle it…?  Does it just delete the old record and rewrite the new record?  Or do you have 2 records in your system…?

So many people and companies seem to focus on the pennies of the situation those darn “per KC charges” and then lose track of the big bucks of the EDI process and programs and all of the other systems that EDI touches.  They’re so focused on the small things and the smallest cost, and they lose track of the overall costs of the project or system.  They’re so concerned with the “per KC charge” that they forget (or lose track of, anyway) the other associated costs with what they’re doing.

Don’t get Me wrong – the small stuff matters, too.  Like those “per KC charges”…  But if you’re so focused on that small figure, what happens to your bottom line costs when you take into consideration the other costs (as suggested above)…?

Penny wise and pound foolish.

It’s the same when you get that sales call from some network or VAN claiming they can save you up to half of your VAN costs!  WOW!  Sign Me up!  But, wait a minute!  What about those other costs…?  Beyond those pesky KC charges?  Don’t they matter, too?

The sales folks at those other VANs and providers aren’t thinking about your total dollars – they’re just hitting you with the easiest cost to argue – the KC charge.  They know it’s a high-profile cost of EDI.  It’s one that you have to justify every time the contract comes up or the bill needs approval.  But what of those other costs…?  The costs of downtime – what happens when the network is down…?  What about the time you’ll have to spend on trading partner notifications?  What about the time you may have to spend on reconfiguring your communications systems – or even worse – the translation set up.

So, basically, the concepts of just saving a few cents here or there on KCs are very Penny Wise, Pound Foolish.

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

ID? We don’t need no stinkin’ ID!

Over on the EDI-L Yahoo group, a poster was talking (ranting?) about some issues they were having with possibly having to change their client’s EDI ISA/GS IDs and all the “trouble”(?) that would cause.  It was a long and convoluted tale about Company A selling a division (that did orders via EDI) to Company B and maintaining that EDI connectivity and activity – using the same ISA/GS qualifier and ID – and something about another division of Company B now going EDI and what ID and . . . well, it was very confusing to read and is still a bit muddled in My head, so maybe go and read it for yourself, here.  Oh, BTW, the ID in question was the DUNS+ ID – where you use your DUNS number and add some number to it.  I don’t know about that, as we use a phone number for our EDI ID.

Company B has also purchased other “divisions” over the years – some EDI, and I guess, some not.  And now some of these divisions may be trading with a whole new set of clients – and maybe even some of the same? – as the original division acquired oh-so-long-ago from Company A.

But I had replied to the original post with the concept that, “way back when” (the poster mentioned that this has been going on for over 10 years!), Company B should have created a NEW ISA/GS qualifier and ID set up for Company B and not continued to use Company A’s ID for so long, even if Company A was not doing any EDI.  It even becomes more of a situation because the ID being used IS, in fact, the DUNS number of Company A being used by Company B, which, presumably, has their OWN DUNS number.  Do you follow?

Anyway, all those years ago, Company B should have changed all of their IDs and alerted ALL of their trading partners to the fact that the ID was changing.  If they had done this, then our poster would have not had any issues right now with their trading partners – new, existing, old, future.  It would be SO much easier now.

The poster also questioned about the “meaning” or the “use” of the ISA/GS qualifier and ID and how it should only be (is?) used to signify a mailbox being used for EDI.

One of the other things that truly captured My attention was when the poster mentioned that “acquisitions and mergers happen every day” and questioned “Do companies really change their EDI ISA and GS IDs every time something about their company changes?”.  And this is something I see on a semi-regular basis.

Going back to the original concept – Company A sells out (a division or a product line or the entire company!) to Company B.  Both are EDI capable.  What does Company B do with Company A’s IDs..?  How do they “merge” the two (or more?) EDI systems and mailboxes together..?  How do they reconcile all of this data being pushed and pulled..?

And the answer goes back to the concepts of “what is a trading partner relationship” – in that they need to work with their existing trading partners to find the best answer.  But even that will rely upon how Company B plans on merging and integrating the Company A products and EDI systems into their own existing product line and EDI systems.  Does Company B want to keep Company A “semi-autonomous” and keep them segregated?  or does Company B want to completely absorb Company A’s products and systems?

If they want to keep it separate, then all they need to do is – well – nothing.  Just alert the trading partners to the new ownership and how the EDI set-up and communications will not change.  Or how they will change (maybe Company B uses Inovis and Company A was a GXS customer), so that the trading partners can make the necessary changes and take the necessary steps to implement those changes.  But they need to communicate with those trading partners the changes that are to come.

If, however, Company B is going to absorb all aspects of Company A and merge them all together, then they will need to alert all of their Trading Partners of that, so that the TPs can make those set-up changes in their systems – pointing this vendor number to this other vendor number’s ISA/GS address and set-up in their own EDI system and with their networks/VANs.

I see this a lot in My daily EDI life.  I work for a major retailer and it is common for bigger companies to acquire smaller companies.  I’ve got one of those situations happening right now.  It’s also common for a big company – which we buy from directly – to also have other companies producing “their” product through licensing of their names and/or logos.  Not every item you buy with the Nike or Adidas or Reebok logo actually COMES from Nike, Adidas or Reebok.  And then there is also the “overstock” production and items that the big companies sell off to other vendors (close-outs) that I may also buy from.  But the point is, that ISA/GS qualifiers and IDs change frequently for some vendors and suppliers.

One last thing that the poster questioned was if a company that uses, say, their telephone number as their EDI ISA/GS ID, should they change their ID every time their Area Code changes..?  And the answer to that, in My opinion, is NO.  Because they’ve been using an established ID – one that has VERIFIABLE TIES to their history – for years.  And it’s still their “property”.  True, it could be possible that another company may suddenly get that “old” phone number as their own with the change of an area code, but the ISA/GS ID still is “owned” by the original company.  It’s all about ownership.

Tying this back to the original question about the use of the DUNS+4 ID, what if Company A – all the way back up there ^^^ – was still doing EDI with other divisions AND still using their DUNS+4 ID?  Well then, Copmany B would NEVER have been able to continue using that ID for the division they acquired.  They would have had to have created a NEW ISA/GS ID right then and there.  Think of the confusion that would occur if Company A and Company B were both sending orders (or supplying product!) to the same vendors..!  Suddenly, I’m sending an order for Widgets from Company A, but it’s going to Company B – just because they have the same ISA/GS ID..!

In a way, think about your ISA/GS as an e-mail address.  I’ve had one of My e-mail addresses for – oh, well over 20 years now.  Now, if I was to deactivate that e-mail address, and in, say, 6 months, somebody ELSE was to acquire it, think of all the e-mails that they MAY get that were originally intended for Me..?  Same thing could go for a telephone number or even a PO Box or other mailing address..!  Think of when you buy or move into an existing house (condo, apartment, whatever!) and you get mail that is addressed to the previous recipient.  Well, you look at the address, see that it’s not for you, and you cross out the address, write “MOVED!” across the front and stick it back in the mailbox.  The post office then will do whatever they need to do with it.

The trouble with that in the EDI world, however, is that you never “look” at that printed address.  You don’t really see the order that is coming in to your system.  EDI is not an “eyes on” or “hands on” kind of business practice.  It’s system automated.  And the system is looking at values.  And the system will only kick out a value if it doesn’t match.  So, in My example above of Company A and Company B using the same ISA/GS qualifier and ID and sending orders to the same vendor/supplier, the EDI system is going to look at that ID and process the order – and isn’t truly going to know whether that order is for A or B – unless you have it doing a match on other data – such as a sold to, ship to, bill to or other such TP specific information – and the error will not get caught until the order is being picked and packed and shipped.  Or, worse yet, it may not even get caught until the order HAS shipped and Company A calls you up and asks “why did you send this stuff to us?  We didn’t order it!” or Company B calls you up and asks “hey!  where’s our order?”..!

The point to ALL of this is that the ID in question should remain with the company that originated that ID!  If I set-up an ID of ZZ/CEDEDITEST, then I should keep that ID with Me until such time that I’m no longer using it and cancel that ID and get rid of it.  It is MY qualifer and ID set-up and should remain MY qualifier and ID set-up for as long as I want it.  And if the ID is definitely company specific – as a DUNS number is – then you bet your sweet aunt’s patootie that I’m not going to get rid of that ID becuase it still relates back to and points to Me and My company!

I may be sounding greedy here, but that ID is MINE!

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