EDI and Electronic Commerce Program EDI Reporter International

154 Pages·1992·14 MB·English

EDI and
Electronic
Commerce
Program
EDI Reporter
1 INTERNATIONAL
INPUT'
1280 Villa Street Mountain View, California 94041 (41 r 961- 300
>
Digitized by the Internet Archive
2015
in
https://archive.org/details/edielectroniccomunse
——
A Monthly Publication from INPUT'S EDI/ESectronic Commerce Program
Vol. 7 No. January 1992
1
National Data Corporation Offers EDI Services to Banks
1
IN
ACH
THIS 2 ..Stockholder Systems Introduces Clearinghouse Product
ISSUE:
3 ACH Reports Pivotal Year
4 Annual EDI Year Review Recap
in
%
6 Macy’s Outsourced EDI Operation Y-’
^ ff S
#
•'''y
6 Nordstrom Pursues E-Mail-to-EDI Transition wm
&>
National Data Corporation Offers EDI
Services Banks
to
NDC
ational Data Corporation is its network. It has 350,000 retail For example, can equip a
offering an EDI network merchants and over one million retail store's POS terminal
service to banks so that banks, retail locations on its network used for tracking inventory
in turn, can offer EDI and EDI/ (performing electronic draft with other capabilities, such as
EFT payment services to their capture and credit card authori- balance reporting, cash concen-
clients. Mercantile Bank St. zation). And it has 70% of the tration, tax payments, payroll,
NA
Louis is NDC's first nation's pharmacies on line (for payment to suppliers, and
customer. which performs insurance immediate re-ordering as mer-
it
Although NDC's global net- claims processing). chandise is sold.
work service supports all kinds NDC's network is also used for NDC
— will first offer Global
of EDI transactions purchase traditional financial services
Exchange as a shared service for
orders, transportation docu- such as cash management and
— bankers at a cost of $25,000 per
ments, etc. it is nevertheless electronic tax payment.
year. Banks will then charge
focusing on financial EDI
NDC NDC their customers a transaction
services. is already well With this installed base, is
fee.
established in the financial and leveraging its network to pro-
retail sectors. vide more value-added services Industries it will focus on first
NDC to its bank clients and their are financial services, electronic
already has over 300 U.S.
clients.
banks (including the majors) on
Continued on next page
—
2 EDI Reporter International
Bank EDI. desired corporate payment volumes necessary for a service
.frompage 3
. format (the CTX) is technically to be profitable. Also, with its
tax payment, retail, petroleum too sophisticated for most enormous network of corporate,
(particularly at gasoline service banks and, consequently, is bank and ACFF connections—
stations/convenience stores), used by only about 50 banks. literal network connections it
government programs, and is well suited to the task. From a
• These days, banks have their
health care. hands full of problems more per-transaction operational cost
standpoint, it is probably the
NDC's network driven by pressing than devising and
is lowest cost provider of funds
Tandem computers and sup- launching an EDI/EFT service.
transfers outside the ACFF.
ports XI2, TDCC, EDIFACT, NDC is well positioned because
NACHA, BAI and SWIFT Source: Bob Murphy, Director
it is a service provider to banks.
of Communications,
standards. It can be the outsource vendor to
[phone].
NDC expects Global Network to many banks and attain the
be fully functional by mid-1992.
NDC Stockholder Systems Introduces
Analysis: has a better shot
at becoming the nation's pre- ACH
Clearinghouse Product
mier EDI/EFT network than do
individual banks or bank con-
A
sortia. nationwide, unified Stockholder Systems, Inc. has bank and its correspondent
electronic payment service a new software product that banks to communicate the ACH
provider is a necessary piece of allows a bank offering ACFI information.
electronic commerce infrastruc- processing services for corre-
The CBIS product requires the
ture that has tantalized but spondent banks to set up an
processing bank to have SSI PEP
eluded the banking industry for electronic mailbox and activity
A or PEP+ software products.
the past five years. handful of reporting facility.
These mainframe software
banks are trying to pioneer EDI/
The processing bank using the systems allow financial institu-
EFT services to their corporate
Correspondent Bank Informa- tions to electronically process
clients. Unfortunately, they ACH
tion System (CBIS) can electroni- transactions through the
have not been successful,
cally notify each of its corre- network.
because:
spondent (client) banks of the
• Due to interstate banking ACFF transactions processed for There are over 600 licensed sites
restrictions, there are too the correspondent. The data is of SSI's PEP products. Together
many banks in this country to provided in both NACFFA and with SSI's micro products and
allow any one bank to attain report formats. Correspondents new Corporate Automated
the payment volumes that can also enter ACH return Payment System, the company
would make an EDI/EFT requests to send to the process- has over 1,400 customers using
service profitable. ing bank. Correspondents can its software for wire transfer,
access the CBIS using a micro- cash management, electronic
• Due to the large number of
computer. funds transfer, check processing,
banks (14,000) there is not a
information distribution, secu-
uniform electronic capacity Correspondent banking is a
rity holder recordkeeping,
throughout the system that relationship in which large
mortgage origination and
enables any corporation (and "upstream" processing banks
servicing, lease accounting, safe
its atteAndant bank) to pay any supply smaller "downstream" deposit box accounting and loan
other. viable electronic correspondent institutions with
recovery.
payment system requires all such services as loan participa-
banks to be able to speak to tion, check clearing, wire trans-
SSI is a wholly owned subsid-
each other in a standard and fer, currency availability and NYNEX.
iary of
effective way. Such a system cash management. SSI's CBIS
doesn't exist today. The product enables the processing
INPUT
© 1992by INPUT. Reproductionprohibited.
—
January 1992 3
ACH 1991-
Reports “Pivotal Year” for
Growth Up by 20%
T
he Automated Clearing (Herndon, VA), the administra- the predominant use was for
—
house (ACH) Network the tor of the ACH, reports that in consumer payments).
nation's largest electronic 1991:
» Commercial payments in 1990
payments system-reported
• Over 100,000 companies grew by 22 percent, and the
record growth in 1991. The ACH
ACH originated transactions annual growth rate for all
is a patchwork of regional ACH
(both consumer and corpo- payments increased 16
and a few national banking
rate), more than double the percent.
networks that allows banks to
number of five years ago.
move funds amongst them- ® The average annual growth of
ACH ACH
selves. The network handles • Total volume reached 1.5 credit volume surged
several kinds of funds transfers, billion payments, with com- from 12 million to approxi-
all of which are either consumer mercial payments accounting mately 30 million transactions
or corporate transactions. for 1.03 billion (the first time per year, while annual in-
commercial payments ex- creases in debit volume have
Consumer transactions include ceeded one billion). Exhibit 1 remained relatively flat.
prearranged payment and depicts the volume growth for
deposit (PPDs), such as direct the ACH. (Note: for the first The use of some ACH products
deposit of payroll or automatic decade of the ACH's existence. grew at a much faster
payment of insurance premi-
ums; machine transaction Continued on page 6
entries; customer-initiated
entries; point-of-sale; and shared
network transactions.
Corporate transactions include
intracorporate transactions
where a single corporation
wants to funnel monies from
several accounts into a single
—
one, or vice versa and
intercorporate transactions, in
which one company pays
another. The formats here are
cash concentration and disburse-
ment (CCD), CCD+, corporate
trade payment (CTP), and
corporate trade exchange (CTX).
CCD
The format was the origi-
nal format; the others differ
from it only in the length and
flexibility of the free text that
can be sent along with the
payment instruction (which
explains what the payment is
for).
The National Automated
Clearinghouse Association
INPUT
© 1992by INPUT. Reproduction prohibited.
— —
EDI Reporter International
1991—
ED1 Year Review
in
Perhaps the Gulf War and an interconnected bulletin board National Data Corporation
the recession made 1991 a and EDI network. launched NDC Global Ex-
quieter year in EDI than previ- change, an EDI service that
The agribusiness sector began
ous years. Nonetheless, in 1991 banks can resell to bank custom-
adopting EDI with AgriData
EDI users and vendors made Resources (now ARI Network eNrsA. Mercantile Bank St. Louis
steady progress. As in every was the first customer (see
Services) services to connect
January issue of the Reporter, story this issue).
equipment manufacturers and
INPUT recapitulates the prior
their distributors/dealers. BT North America expanded its
year's EDI developments. VAN
U.S.-based EDI*Net
Grocery EDI users pushed to a
services throughout Europe. All
Product Innovations new phase of EDI with the
transmissions within this single,
promotion announcement
ACS/Premenos' introduction message format. unified network domain have a
of EDI/e, a new EDI develop- single price schedule; there are
ment language. EDI/EDT tax payments picked no interzone charges.
up steam with the development
IBM Information Network
Facsimile systems that integrate of new standards (see Stan-
with EDI: bar coded purchase launched its Software Mall,
dards, below).
where software vendors of IBM
orders; fax boards that transmit
Product Introductions compatible software can set up
binary files.
bulletin boards, data bases of
New Applications/ GE Information Services product specifications, opera-
Industries launched Retail*Talk in July, a tions manuals, software up-
network service for companies dates, E-mail boxes, and on-line
The health care industry estab- in the retail apparel industry. ordering facilities on the Infor-
lished the Health Care EDI RetaiFTalk allows players to mation Network to faciliate
Association with an initial communicate with each other communication and commerce
membership of22 using EDI and E-mail, provides with their customers.
multihospital groups represent- access to data bases (particularly
Acquisitions & Finance
ing some 4,500 hospitals and the GEIS UPC*Express catalog),
70% of all hospital purchases in and allows a single company to
the U.S. Health insurance maintain a private messaging The $3 million (fiscal ye—ar 1991)
— ARI Network Services for-
standards designers got their network (for employee par-
merly AgriData Resources
own XI2 subcommittee. Mem- ticularly sales personnel
went public, raising $24 million.
bership swelled to the hun- communication).
Sterling Software purchased
dreds, from nothing in 1989.
Pacific Bell launched Control Data Corporation's
—
Environmental and occupa- RealtyLink combining, in one Redi*Net EDI network service.
tional health EDI got a boost service, videotex, computers, AT&T
completed its acquisition
with the founding of the Envi- facsimile, and telephones.
of NCR, which could have a
ronment and Safety Data Pacific Bell is approaching real
huge impact on the electronic
Exchange (in the Fall of 1990) to estate boards in California with
commerce and EDI market.
bring software vendors, users, the package, hoping to link NCR
is a dominant force in
and regulatory bodies into an brokers, real estate boards,
point-of-sale and automatic
EDI trade group. financial institutions, insurance
teller machines and transaction-
An electronic commerce pro- companies, appraisers, and title oriented computing, especially
gram was launched by the companies, allowing them to now with its acquisition of
retrieve essential information
military. The head contractor, Teradata, the multiprocessor
and communicate instantly via
Lawrence Livermore National data base machine
numerous media.
Laboratories, sought to unify manufacturer.
commercial VANs and set up
INPUT
© 1992by INPUT. Reproductionprohibited.
January 1992 5
Foodcom, traditionally focused this communication protocol, Tax filing EDI/EFT standards. The
on the grocery industry, EDI messages can be sent year 1991 saw the initiation of
changed its name to EDI Able through any X.400-compliant the 826 transaction set (tax
and is going after other system or network of systems. reporting among government
industries. agencies), the 813 (the electronic
X.500. The North American
tax return), and the TXP format,
GTE, with a value-added EDI Directory Forum, whose mem-
which an addendum format
is
service for hospital/health bers consist of value-added
used in conjunction with the
claim processing, formed an networks, telephone companies,
CCD+ and the XI2 820 pay-
alliance with Sterling Software and the U.S. Postal Service,
ment-remittance advice
ORDERNET, the predominant initiated an experimental X.500
VAN transaction.
EDI in pharmaceutical directory of E-mail addresses.
A
distribution. Business modeling. committee
Health care standards. The Health
of the International Standards
Global Logistics Ventures, a Care EDI Corporation, the ASC
AMR Organization (ISO) released a
joint venture between X12 organization, pharmaceuti-
document attempting to provide
and CSX, launched a logistics cal companies, and service
a generic model of a business in
service connecting multiple providers moved toward stan-
carriers and shippers using dardizing all health EDI on XI2. relation to its environment. The
model attempts to
EDI.
identify universal
Sterling Software communication
acquired National U.S. EDI User Expenditures requirements
Systems Corpora- among organiza-
tion, an EDI/EFT tions, to enable
1990 1991 1990-1991
software supplier. Delivery Mode EDI standards
($ M) ($ M) Growth (%) designers to
Electronic Data
develop compre-
Systems acquired Network Services 123 148 2
hensive, non-
SD-Scicon U.K.
redundant
Ltd., one of EDI Software 42 48 17
message formats.
Europe's largest
computer services Prof. Services 31 35 13 Automatic
identifi-
companies and a Total EDI Market 196 231 17 cation/bar codes.
leading EDI The Federation of
software maker. Automated
The $272 million Coding Technolo-
acquisition of the $400 million The insurance claim format (837) gies (FACT) released guidelines
company gives EDS a broad and the claim payment order to unify bar-code standards
base of British and French (835) were placed in draft worldwide, particularly those
customers. However, SD- (usable) status. The Medicare relating to product and com-
Scicon has been losing money formats (UB80 and HCFA 1500) pany identification.
for years. SD-Scicon manages are to be replaced by XI2. Demographics:
information services for Gen- Material management/hospital
eral Motors' British, German supply ordering is moving away Overall, the revenues received
NWDA
and Spanish operations. from proprietary and by EDI software and service
Standards formats to XI2 formats. vendors increased 17% from the
The telephone bill invoice. With a beginning to the end of 1991,
An
X.400. X.400 protocol for handful of pilot projects, the X12 from $196 million to $231
EDI messages (whether XI
2, 811 telephone service invoice is million.
EDIFACT, or other) was devel-
oped and is called X.435. With in use. Number of U.S. EDI users
increased by 5,000.
INPUT
© 1992by INPUT. Reproduction prohibited.
—
EDI Reporter International
ACH
Pivotal Year. .frompage 3 • Direct deposit of payroll has companies to use the
. increased more than 50% since network to send remittance data
percentage rate than the overall 1989.1 without an instruction to trans-
growth of the network. fer funds. Companies can use
ACH
Network to this option to send notes regard-
• During the second quarter of ing payments and references to
Provide Limited
1991, the surge in the number other EDI and EDI/EFT mes-
ACH
of financial electronic E-mail sages. This so-called "zero
data interchange payments dollar payment" option (because
pushed the annualized EDI NACHA the field in the ACH message
In 1991, the Rules and
growth rate to 96% for some that would normally specify a
Operations Committee initiated
corporate payments. dollar amount to be paid is zero)
a rule change that will allow
will go into effect in April, 1992. a
May Become
Macy’s Big Outsourced
First
EDI Operation
M
acy's department stores interact with EDI translation Sterling Software ORDERNET,
does EDI with 80 vendors software come under the sees it this way:
and 12 transportation compa- purview of the outsourcing
nies. The vendors represent 20% contractor. "I see EDI service bureaus
of the chain's buying business. arising to take over the function
More than half of this EDI traffic Macy's move is in accord with a of EDI for some organizations.
is not purchase orders, but sales larger trend of outsourcing and These service bureaus will go
VAN
data (in the 867 product activity EDI taking place in MIS depart- beyond current services to
format) sent to vendors that ments in all industries in the provide a complete, self-con-
drives model stock and auto- economy. What is the relation- tained, "EDI Department" for
matic replenishment systems. ship between these two trends? their customers."
Bill Plumb, president of
The store management's deci-
sion to outsource all IS functions
put a damper on the store's EDI
Nordstrom Pursues
DP
plans. All applications
POS, accounts payable, MPS,
—
E-Mail-to-EDI Transition
etc. are to be leased from a
third-party outsourcing vendor, N
the Sabre Group (Atlanta, GA). ordstrom (Seattle, WA) converting to scanning and EDI
Making the transition to this was later than other large systems in 1992.
new scenario has diverted retailers in setting up an EDI
management's attention from program. The personal-touch Nordstrom initiated an E-mail
moving forward with the EDI culture of the company made network with its vendors last
program and getting new EDI the adoption of UPC scanning year. The network is intended
trading partners. and tracking a low priority. It to bring better communications
does not scan merchandise. It between buyers and sellers,
Nevertheless, the outsourcing does not use scannable ticketing particularly where multiple
strategy will include EDI be- (even though many of its ven- Nordstrom buyers for a single
cause the applications that dors provide premarked mer- product category deal with a
chandise). Nordstrom will be single manufacturer (for
INPUT
© 1992by INPUT. Reproduction prohibited.
January 1992 7
example, in the case of shoes). representatives are enabled to to be conducting EDI with its
Buyers do not place purchase check the status of orders and key vendors. Approximately
orders over the network (POs invoices. 300 of its vendors are on the
are still sent on paper through E-mail system V.I.P. Express.
the postal service). Yet the Nordstrom deals with 14,000 Altogether, the system main-
whom
network is tied into Nordstrom's active vendors, 150 of tains 3,000 mailbox addresses,
purchasing and accounts pay- account for 50% of its business. most of which are Nordstrom
able applications. Vendor By mid-1992, Nordstrom expects buyers and other personnel.
News
Bits
Sears Communications Company is offering a ing that its members use Sterling Software
one-day "Understanding EDI" course every ORDERNET as their EDI network service
month in Schaumburg, Illinois. The course provider. HSCA accounts for nearly $1 billion
costs $395 per person. in annual purchasing volume.
The principal gas and electric utility of the state St. Paul Software, has made its EDI translation
of Colorado, Public Service Co., finished an software, Datatran, available for Hewlett-
EDI pilot project with EnerNet Corporation, a Packard 9000/800 series computers, MIPS
Houston-based information services company, 2000/3000 computers, Texas Instruments 1500
and three natural gas marketing companies. series, and Altos Computers (which run on Intel
The project used GAS*FLOW, the natural gas 386 and 486 microprocessors).
industry's EDI standard, for requesting and
scheduling natural gas deliveries to the utility The Council of Logistics Management has
through pipeline networks. published a new book: Improving Quality and
Productivity in the Logistics Process. Cost: $30.
Health Services Corporation of America More information: [phone].
(HSCA), a purchasing organization for hospitals
and other health care providers, is recommend-
Calendar
Note: The annual EDIA conference, tradition- Systems in the Global Environment, University
ally held in December, has moved to October. of Maribor, (tel: [phone];
fax: [phone]).
May 11-13, Sheraton Seattle Hotel and Towers,
EDI '92, Seattle, WA, DISA, [phone]. October 5-7, Opryland Hotel, Nashville, TN,
EDIA's 24th Annual EDI Users Conference and
September 3-5, University of Maribor, Bled, Exhibit, EDI Association, [phone].
Slovenia, Yugoslavia, Interorganizational
INPUT
© 1992by INPUT. Reproduction prohibited.
About INPUT
EDI Reporter International
Subscription Order Form
INPUT provides planning information, analysis,
I want to order INPUTs EDI Reporter International and recommendations for the information
at the fee of $350 per year per subscriber ($375
technology industries. Through market research,
outside North America).
technology forecasting, and competitive analysis,
California Clients pleaseaddapplicable sales taxon 70% ofpurchase INPUT supports client management in making
price.
informed decisions.
Z Please send me more information about INPUT'S
— INPUT specializes in the software and services
Electronic Data Interchange Program newsletters,
industry which includes software products,
reports, conferences, and continuing "Hotline"
support. I understand that I am under no obligation systems operations, processing services, network
to purchase. services, systems integration, professional services,
turnkey systems, and customer services.
—
TERMS OF PAYMENT Payment in full is due within
Formed as a privately held corporation in 1974,
30 days of invoice date.
INPUT'S clients include more than 100 of the
Enclosed is my check in the amount of world's largest and most technically advanced
my
$ . Send first issue immediately! companies.
Bill my company on purchase order number
in the amount of INPUT Offices
my
$ . I understand that first
issue will be sent immediately upon INPUT'S receipt North America
of payment in full.
San Francisco
Charge it to my American Express number: 1280 Villa Street
CA
Mountain View, 94041
expiration date / / Tel. [phone] Fax [phone]
NAME New York
Atrium at Glenpointe
TITLE
400 Frank W. Burr Blvd.
COMPANY Teaneck, NJ 07666
Tel. [phone] Fax [phone]
ADDRESS
Washington, D.C. - INPUT, INC.
CITY STATE 1953 Gallows Road, Ste. 560
VA
Vienna, 22182
ZIP PHONE
Tel. [phone] Fax [phone]
International
SIGNATURE
(requiredforAmerican Express charge) London INPUT LTD.
-
Piccadilly House, 33/37 Regent Street
Call, mail or fax your order to: London SW1Y 4NF, England
INPUT
Tel. [phone] Fax [phone]
1280 Villa Street • Mountain View • CA • 94041
INPUT SARL
Tel. [phone] • Fax [phone] Paris -
24, avenue du Recteur Poincare
EDLET 75016 Paris, France
Tel. [phone] Fax [phone]
INPUT EDI Reporter International
A publication of INPUT'S EDI Program Frankfurt - INPUT LTD.
Sudetenstrasse 9
—
Editor: Torrey Byles [phone] W-6306 Langgons-Niederkleen, Germany
Tel. [phone] Fax [phone]
TheEDIReporterInternationalispublishedeachmonthbyINPUT, Tokyo INPUT KK
1280VillaStreet,MountainView,CA94041. Copyright©1992by -
INPUT. All rights reserved. Reproduction in whole or in part Saida Building, 4-6
without permission is prohibited. Subscription: $350.00 per Kanda Sakuma-cho
year/per subscriber (Outside North America - $375 per year). Chiyoda-ku, Tokyo 101, Japan
Tel. [phone] Fax [phone]