rfc1865.txt

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   customers, the barriers entering to the electronic marketplace are



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RFC 1865                 EDI Meets the Internet             January 1996


   greatly eased.  This does not mean that there is only one source that
   everyone goes to for a list of current business opportunities.
   Rather, a prospective supplier only needs to go to a single
   electronic marketplace.  To communicate with each other, the various
   participants in electronic commerce need to harmonize their
   procedures and processes.  Examples include common trading partner
   registration and the adoption of standard implementation conventions
   for EDI messages.

4.2.  My organization has an internal automated system for processing
      requisitions and issuing purchase orders, but it does not create
      the X12 formatted EDI transactions; what should we do ?

   You could enhance your existing system, for example, by adding EDI
   translation software.  VANs often offer EDI "translation"
   capabilities that convert flat text files into EDI X12 or EDIFACT
   format.  This translation software may be designed with a particular
   technical solution in mind; carefully consider how the software would
   be used and what applications and telecommunications software would
   need to interact with it.  You don't want to inadvertently lock
   yourself into using only one supplier.

4.3.  My organization already has a dial-in bulletin board service
      (BBS) where we post transactions; should we keep it?

   Yes, but that puts you in the role of being your own VAN.  By acting
   independently, organizations have established their own dial-up
   electronic bulletin board system with their own unique, but
   functionally equivalent, operating rules.  Your BBS will be a little
   different that the next organization's, making it difficult for
   suppliers to access.  By getting transactions from the VANs who
   specialize in moving information, your organization will get the
   widest circulation possible.  You will be able to reach trading
   partners you may not even know existed, resulting in more competitive
   bids.  Because of their idiosyncratic nature, BBS are not consistent
   with the idea of a "single face to industry" espoused by the Federal
   Government.

4.4.  My organization currently has a Trading Partner Agreement
      with each trading partner we're currently doing business with.
      Can we keep them ?

   In the short run you may want to keep some Agreements in place to
   cover unique circumstances.  But be careful not to create conflicting
   agreements and directions for your trading partners.  Follow the
   procedures common to your particular line of business.  In the long
   run, less is better.  Hopefully, the introduction of EDI into common
   commercial practice will eliminate the need for EDI-specific



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RFC 1865                 EDI Meets the Internet             January 1996


   agreements.

4.5.  It would be nice to get more trading partners and/or more
      competition, but I'm worried about getting too many transactions
      to be able to handle them.  Has this been a problem ?

   The answers to this and related questions presupposes a willingness
   to participate in the open bidding process.  While this process is a
   legal requirement for government agencies, many private organizations
   choose not to adopt the practice.  The technology of the Internet
   facilitates competition, but the cost of putting these practices in
   place limit their value.  This is a business decision, not a
   technical one.  Will companies competitively procure critical
   supplies absent a long term relationship with the supplier? For
   essential inputs that will make or break customer satisfaction and
   productivity, the benefits of competition may not be worth the risks.

   Many organizations experience some increase in the number of
   transactions; for competitive procurements, the winning bid should be
   significantly better than those received prior to using the
   electronic system.  The impact of an increase in volume needs to be
   evaluated on a situation by situation basis.  For example, your
   acquisition support system may need to be re-engineered to quickly
   handle bids by ranking and presenting them to your buyers in low to
   high order.  Your new or enhanced system should make it easy to
   receive and reply to any inter-personal messages that are sent and
   linked to a bid (that is, an SMTP/MIME message or the EDI X12.864
   text message transaction set).

4.6.  Does this mean that I'll receive more messages ?

   There is a strong likelihood the number of messages will increase as
   There is a strong likelihood the number of messages will increase as
   you reach more and more trading partners.  After a reasonable trial
   period, your EDI trading partners should be relying on EDI and
   disinclined to use alternative forms of communication that don't fit
   EDI/EC.  Once you use EDI/EC to communicate with a trading partner,
   you should consider discouraging the use of telephone calls or fax
   messages or other non-EDI/EC messages by pointing out the fact that
   telephone or fax messages are processed more slowly.  By using
   electronic messaging, you can establish a written and dated audit
   trail.  Your application system can route the message to the buyer
   and "attach" it to a "case file".  However, if your organization does
   not use automated systems, you will want to adjust your approach to
   dealing with non-EDI messages.






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RFC 1865                 EDI Meets the Internet             January 1996


4.7.  If we see a transaction posted on VAN, how do we respond in
      electronic format ?

   This function is typically handled by applications software, not by
   the Internet.  For example, a vendor that wishes to bid on a
   particular Request For Quotation (RFQ) would prepare a bid (X12-843)
   and send it via their VAN of choice.  The identification information
   in the interchange control header (ISA) and functional group header
   (GS) will be interpreted by your VAN and forwarded to the buyer's VAN
   or to the buyer directly, depending on the reply address.  VANs may
   reject messages from unregistered sources; otherwise they are
   forwarded to (or otherwise made available to) the buyer.  If a buyer
   is using dial-up access to a VAN, then they will have to call-in for
   their messages.

4.8.  My organization has an established bilateral relationship
      (such as an existing contract.  Can we send these transaction
      via the Internet ?

   Yes, the Internet can be used to send transaction sets to existing
   trading partners via SMTP or FTP messages.  VANs were typically used
   for bilateral relationships between companies, whereas the Internet
   is useful for establishing multilateral relationships.  These
   bilateral relationships are usually quite stable, but both parties
   had to agree to share the same VAN or get their VANs to interconnect.
   Multilateral relationships are between organizations that don't
   necessarily have existing relationships and may be rather ephemeral.
   The Internet is suited to dynamic multilateral relationships that may
   later evolve into static bilateral relationships between companies
   using VANs.  Therefore, the issues concerning the Internet (security,
   availability, etc.) are manageable in the early stages of forming a
   relationship.  If your current VAN is not capable of using the
   Internet, you may need an alternative route for those messages.
   Later, as the business relationship matures, the use of VANs may be
   appropriate as the level of communication becomes more important.
   For example, unless your system has a directory of all registered
   trading partners, you lack the capabilities to screen and validate
   transactions that arrive at your site.

5. The Role Of Value Added Networks

5.1.  What is a VAN?

   The use of EDI over the Internet is in the early stages, although the
   technology and services are developing remarkably rapidly.  In the
   past, organizations doing EDI typically have relied on specialized
   firms called Value Added Networks (VANs) for technical assistance.
   Many of these organizations will look to their VAN for assistance in



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RFC 1865                 EDI Meets the Internet             January 1996


   using the Internet.  VANs specializing in EDI applications provide
   technical support, help desk and troubleshooting for EDI and
   telecommunications problems.  They assist in configuration of
   software, upgrades to telecommunications connectivity, data and
   computer security, auditing and tracing of transactions, recovery of
   lost data, service reliability and availability.  Some EDI specific
   services can include broadcasting an RFQ to a collection of vendors,
   or storage of EDI information for later search and retrieval.

5.2.  What is an Internet Service Provider (ISP)?

   VAN services have typically used proprietary network or a network
   gatewayed with a specific set of other proprietary networks.  In
   contrast an Internet Service Provider (ISP) offers generic network
   access (i.e. not specific to EDI) for all computers connected to the
   internet. A direct internet connection permits real time computer-
   computer communication for client-server applications.
   Alternatively, a part time internet connection can be used to access
   internet servers using an on-demand basis, or access another system
   via email which includes a store and forward method.  Internet email
   may be used as a gateway to proprietary networks if the proprietary
   network has an email gateway.

5.3.  How might an ISP be used for EDI?

   Internet email can be configured for a dedicated connection with
   real-time transfers, or a store and forward method (like traditional
   VANs), or a combination of the two, e.g. where a direct delivery to a
   trading partners system is used when a link is operational, and a
   store and forward from an ISP is used as a backup.

   A large organization can connect their network to the Internet at an
   internet exchange point, however, most use a commercial ISP, either a
   major backbone provider, or local resellers of service off one or
   more backbones. The ISP provides technical assistance and access to
   local telecommunications links.

5.4.  Doesn't EDI presume the services of companies called
      Value Added Networks (VANs)?

   EDI only specifies a format for business information; the
   transmission of the information is covered under other standards. A
   real world analog is sending a business form from one company to
   another. The "form" could be sent via US mail, US Registered mail,
   via private carrier (UPS/FEDEX) or simply faxed between the
   companies.  EDI only requires that the trading partners follow the
   content standards.




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RFC 1865                 EDI Meets the Internet             January 1996


5.5.  If I can use X12 protocol and my VAN to send transactions,
      what is the benefit of using the Internet?

   The Internet E-mail standards have hierarchical address spaces that
   are defined and updated in what the Internet calls "domain name
   servers."  Unfortunately, X12 has a flat address space.  So, when you
   send an interchange (not via the Internet) to a partner who is on a
   different VAN, your VAN must do a table look up to figure out what
   VAN the receiving party is on.  If you use only X12 without the
   Internet, before you can send a message to this partner, you must
   first contact the recipient's VAN and have them add you as an entry
   to his VAN's table.  If the ISA contained the VAN ID of the
   recipient, then you could (in theory) send interchanges to partners
   via the VAN interconnects without having to notify the recipient's
   VAN first.  However, this theory needs to be worked out in practice.
   In contrast, thanks to the domain name service, Internet e-mail users
   (and Postal users) don't have to call up their service provider
   before sending a message across an "interconnect" to another service
   provider.

5.6.  Can we expect VANs to offer connections to other VANs via the
      Internet?

   All VANs connected to the Internet are connected to one another, thus
   avoiding most of the problems of interconnecting proprietary
   networks.  VANs can then focus on services to their customers such as
   automatic bid submission, market and business opportunity analysis,
   and translation software.

5.7.  How can I use the Internet directly for exchanging EDI messages
      without going through a VAN?

   You and your trading partner must agree on one of the Internet
   protocols for exchanging messages and then agree upon some details
   with the exchange.

   a) Email based messaging

      The simplest and most widely supported means of exchanging
      messages is via internet email. Typically, the IETF-MIME
      encapsulation specification would be used to enclose the EDI
      data within the email message, and the trading partners would
      need to agree upon an encryption method for secure email,
      typically PEM or PGP (see question 8.4).

      The trading partners would then exchange: