REDMOND, Wash., Jan. 14, 2002 — A year and a half ago, David Beltz of Air Products and Chemicals, Inc. was planning the future of his company’s business-to-business integration initiatives.
A Fortune 500 manufacturer of chemical and gas products with annual revenue in excess of US$5.7 billion, the Pennsylvania-based Air Products had several direct connections to major customers through electronic data interchanger (EDI). But such connections are cumbersome, and the promise of eXtensible Markup Language (XML), to connect businesses in a more efficient and cost-effective way quickly drew Beltz’ attention.
“We were actively looking at XML tools early on,” Beltz says. “We knew right away that we wanted to get into this space.”
It’s an increasingly common conclusion.
XML-based business integration provides companies all the benefits of EDI, while at the same time allowing them to extend those benefits to hundreds or even thousands of trading partners of all sizes, instead of just a handful of the largest ones. Whereas EDI systems require substantial investments in infrastructure, XML-based systems are less costly and can reach out to any trading partner via the Web.
“It’s definitely a small percentage of companies out there that can afford and have the resources to implement EDI,” says Dave Wascha, a product manager for BizTalk Server. “If you want to open your business up to small- or medium-sized companies, to exchanges, to marketplaces and so forth, those things don’t happen with EDI. They happen with XML.”
According to Wascha, EDI’s exclusivity is not its only disadvantage when stacked against XML-based business integration. Where XML provides a flexible medium for data exchange that can be revised or customized with relative ease, EDI systems utilize rigid data forms that require a near overhaul for even minor changes.
EDI systems also incur ongoing costs by necessitating the use of a value-added network (VAN), whereas XML-based business takes place over the Internet. VAN providers typically charge by volume of data exchanged; for a large global company, seemingly small per-character bandwidth fees can soon become significant.
But according to Beltz, it wasn’t bandwidth fees or process efficiencies that had Air Products kicking the tires of XML data-exchange products. “It wasn’t necessarily a cost issue for us,” he says. “Our processes were already as automated as they can be with EDI. Our interest in XML initially was more about getting into the new technologies out there and trying to understand how we can use those technologies to enhance the way we do business.”
That approach put Air Products ahead of the curve. The company was reviewing options for XML integration as the language was emerging as an international standard for e-business. So when one of its biggest customers, a major American manufacturer of microchips, approached the company with a pilot program to move its most important suppliers over to an XML-based system, Air Products was ready to take action.
“We thought it was a great opportunity to get some experience with XML-based business, and also to seize the advantage over other suppliers for one of our most valuable customers,” Beltz says.
Air Products decided to run its XML processes through the XML-based Microsoft BizTalk Server. The decision allowed the company to utilize the experience of its in-house IT staff, avoid many potential integration hassles, and achieve results that have been remarkable by any standards.
“First of all, we were able to implement the solution in six weeks,” Beltz says. “It’s almost unheard of in the IT world. We were the last of the four companies asked to participate in this project, and the first to complete our implementation.”
The clockwork implementation gave Beltz’ team a chance to enjoy the holidays. When the team returned in the new year, Air Products began exchanging documents through their new BizTalk Server configuration.
“We transmit about 120 documents per day,” Beltz says. “That’s steady business. But the E-Business Group is more excited about the fact that the server has transmitted those documents every single day since it went live. Our uptime has been 100 percent since we went live in January.”
It’s an astounding statistic for a company as large as Air Products, according to Beltz, but it’s not a surprise for Dave Wascha.
“XML is open, it’s flexible, it’s reliable, and it has proven again and again that it can handle the most demanding IT challenges,” Wascha says. “With BizTalk Server, we’ve found a very simple and efficient way to leverage those advantages for organizations of almost any size. Air Products’ experience with BizTalk Server is a perfect example of how XML-based technology can be used to improve the customer experience and business processes. And BizTalk Server in particular is able to do that at a very low cost, relative to other products in this space.”
On this issue, Air Products couldn’t agree more.
“Our decision to run with BizTalk Server was based more on what it could do for our company than on cost,” Beltz says. “But, that said, using BizTalk Server we were able to put together a world-class, enterprise-scale XML data exchange through the efforts of four people over six weeks, and we’ve been tremendously pleased with the results.”
Beltz says the BizTalk Server implementation not only allowed Air Products to improve its relationship with a major customer, but it’s also opened the company up to new opportunities. Since the implementation went live in January, Air Products has already created an exchange environment within the chemical industry e-marketplace Elemica.
“That project was completed in October,” he says. “There are 22 investing companies in Elemica, and our goal now is to roll out that functionality to as many of those as we can. After that we’ll look at other markets we sell into and see where it makes sense to automate those processes via XML. There’s a huge opportunity for us here, and we’re going to continue to pursue it.”