RosettaNet Standards: Strengthening Trading Networks
By establishing a common language - or standard processes for the electronic sharing of business information - RosettaNet opens lines of communication so that companies realize the full potential of the digital economy, including dynamic, flexible trading networks; operational efficiency; and new business opportunities. RosettaNet offers companies leadership, influence, and collaboration in the development and deployment of the e-business standards vital to the evolution of the global, high-technology trading network.
RosettaNet is named after the Rosetta Stone, a black basalt slab discovered in Egypt in 1799 by a soldier in Napoleon's army. The stone, found near the town of Rosette, was inscribed with the same message in three languages, dating back to 196 B.C. Although the message was of little significance, scholars were able to use the Greek message to translate two forms of Egyptian writing - cracking the code of hieroglyphics. Much like its namesake in the early 1800s, RosettaNet is breaking language barriers and making history.
High Technology and the Value of Standards
Communicating with someone who speaks a different language is not easy. Although achieving some level of understanding is possible, comprehension does not come quickly or confidently. It is this same problem that keeps the high-tech industry from engaging in dynamic trading-partner relationships.
The Internet is fueling the growth of e-business and changing the way products and services are bought and sold; businesses are redefining their roles and interacting in new and different ways, transforming once-linear supply chains into sophisticated trading networks. Although internal company operations may be efficient, communication throughout the trading network - comprised of companies who all do business differently - is grossly inefficient. As more and more business is conducted electronically, requiring powerful search features, cross-channel inventory access and deep content, the burden on all points of the trading network grows, resulting in large-scale inefficiencies. Here are a few examples.
Because there is no agreement on how a part number is defined or inventory queries are made, manufacturers use complex processes to suppose inventory levels and locations. The guesswork significantly impacts production planning, channel allocation, and the cost of returns.
Distributors, who provide resellers with pre-sale and post-sale support on tens of thousands of SKUs, must grapple with disparate forms of product information with no common taxonomy from hundreds of manufacturers. The lack of standards makes the aggregation and dissemination of information an expensive and inefficient proposition - an effort duplicated by each distributor in the channel.
Resellers must learn and maintain different ordering/returns procedures and system interfaces for each distributor and direct manufacturer with whom they trade, causing them to spend valuable resources - up to 50% percent according to some estimates - on back-office operations.
Government, education, corporate, and other end-user organizations that purchase products and services in considerable volume to supply to their customers have no mechanism for effective procurement through uniform templates, making the purchasing cycle long and inefficient. Many orders are old technology by the time they make it through the cycle and to the requisitioner.
Given the industry's high growth rate, fast-changing and complex products, and deflationary pricing, businesses must respond to rapidly shifting market demands and operate on narrow profit margins. Inefficiencies like those described above substantially hinder their ability to do so. Standards, which allow companies to speak the same language, improving the flow of information throughout the trading network, therefore, are not only essential to maximize the benefits of the digital economy but mandatory to compete, survive, and thrive in high technology.
RosettaNet e-business standards enable companies to optimize their trading network. Companies are able to create business models leveraging the global reach of the Internet in a dynamic new way and introduce highly flexible processes into their e-business operations. The benefits are many, including operational efficiency - such as shortened cycle times, improved customer service, and reduced inventory - that saves them time and money. Companies also can take advantage of new business opportunities and strengthen existing trading relationships.
Figure 1: EC Supply Chain Board
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Enter RosettaNet, Leading the Industry
Recognizing the need for global standards, hundreds of the world's leading high-tech companies, many competitors, unite to form RosettaNet. A self-funded, non-profit organization, RosettaNet is charged with creating, implementing, and promoting industry-wide e-business standards that form a common language and align processes throughout the global high-tech trading network.
RosettaNet was founded in June 1998 initially by 40 Information Technology (IT) companies, and joined by a collection of Electronic Components (EC) companies in mid-1999 and Semiconductor Manufacturing (SM) companies in October 2000. Because of its open-platform methodology and expertise, RosettaNet also is forging alliances with adjacent industries. Today, RosettaNet comprises more than 350 companies from around the world, representing more than $1 trillion in revenue.
These companies - RosettaNet Partners - equip the organization with diverse business perspectives in the high-tech industry and offer broad and varied capabilities. IT, EC, and SM manufacturers/suppliers, distributors, resellers, end users, and shippers provide the subject matter expertise and human resources for RosettaNet project teams, and they have direct involvement in the development, approval, adoption, and implementation of RosettaNet standards. Systems integrators, software developers, consultants and technology and service providers supply the tools and services that enable companies to implement RosettaNet standards. Trade associations and not-for-profit government agencies work to enlarge the support base and constituency of RosettaNet by increasing its exposure.
Besides benefiting from open standards, RosettaNet Partners have the opportunity to become actively involved in driving development.
RosettaNet's Organizational Structure: Built for Success
Leaders from elected Partner companies comprise RosettaNet Supply Chain Boards. Representing a cross-section of RosettaNet Partner companies in terms of core competencies and regional involvement, Supply Chain Board companies define development and priorities, serve as examples of implementation success, and actively promote RosettaNet.
RosettaNet has a Supply Chain Board for each vertical industry in its current scope. The EC Supply Chain Board consists of representatives of the EC trading network, including semiconductor suppliers, passive suppliers, connector suppliers, distributors, and customers.
The IT Supply Chain Board consists of representatives of the IT trading network, including manufacturers, software publishers, wholesale distributors, resellers, end users, shippers, and e-technologists.
The SM Supply Chain Board consists of representatives of the SM trading network, including integrated device manufacturers, fabless device manufacturers, foundries, materials suppliers, and assembly, test and probe companies.
RosettaNet operations are conducted under the direction of a chief executive officer and staff - many of whom are on loan from RosettaNet Partner companies on a dedicated, long-term basis - that performs functions such as standards development, partner relations, implementation support, program management, training, communications, Web publishing, marketing, and administration.
Partners contribute significantly to the work produced by RosettaNet, providing technical input, including expertise in process methodology, technology, and best practices; project management; and implementation services, support, and solutions. This unique organizational structure ensures that the best minds from the most notable companies in high technology contribute to standards that meet the needs of the entire industry.
RosettaNet Standards
RosettaNet standards enable businesses to speak the same language: RosettaNet dictionaries, which provide a common set of properties for business transactions, provide the words; the RosettaNet Implementation Framework (RNIF), which provides common exchange protocols, acts as the grammar; and RosettaNet's Partner Interface Processes (PIPs), which define business processes between trading partners, form the dialog. Unlike organizations focused on implementing proprietary solutions, RosettaNet leverages existing open e-business standards, guidelines, and specifications for cross-platform, cross-application, and cross-network communication. RosettaNet takes standards to the next level, creating an e-business framework that crosses the boundaries of individual companies to enhance the interoperability of business processes.
Dictionaries
RosettaNet dictionaries provide a common platform for conducting business within the trading network, eliminate overlapping efforts by individual companies, and reduce the confusion in the procurement process due to each company's uniquely defined terminology. The RosettaNet Business Dictionary designates the properties for defining business transactions between trading partners, and the RosettaNet Technical Dictionaries provide properties for defining products and services.
RosettaNet Implementation Framework
The RNIF Core Specification is an open, common networked-application framework that provides common exchange protocols for quick and efficient implementation of RosettaNet standards. The RNIF specifies information exchange between trading-partner servers using HTML/XML.
Partner Interface Processes
RosettaNet PIPs are specialized system-to-system XML-based dialogs that define business processes between trading partners. Each PIP includes a technical specification based on the RNIF, a Message Guideline document with a PIP-specific version of the RosettaNet Business Dictionary, and an XML Message Guideline document, providing the models and documents necessary for implementation. PIPs possess the following criteria:
- Provide a measurable business outcome or output
- Contain nonproprietary business processes
- Preferably include more than one role interaction
- Stand as discrete units of work that can be attached and built into other PIPs to achieve a larger business outcome
PIPs are classified in Segments and Clusters. Seven Clusters - Administration; Partner, Product and Service Review; Product Introduction; Order Management; Inventory Management; Marketing Information Management; Service and Support; and Manufacturing, which represent the core business processes or backbone of the trading network. Each Cluster is further broken down into Segments, or cross-enterprise processes involving more than one type of trading partner.
In addition, RosettaNet's inclusion of product and partner codes, - the Data Universal Numbering System (D-U-N-S®), which is a global business identifier; Global Trade Item Number (GTIN), which is a global product identifier; and United Nations/Standard Product and Services Code (UN/SPSC), which is a global product classification code, in its standards expedites the alignment of e-business processes between trading partners.
Partners contribute throughout the entire PIP production process, from concept to implementation. It is this motivation, expertise, and immense collaboration that enables RosettaNet to rapidly develop and deploy standards. Since its founding in June 1998, the RosettaNet initiative moved into its pilot implementation phase in June 1999, production readiness in February 2000, and production-system implementation in October 2000.
Building Momentum
The turn of the century marked a milestone year for RosettaNet as more than 200 companies joined the consortium, the organization created the SM Supply Chain Board and launched organizations in Europe and Asia, and 41 companies announced RosettaNet standards in production. And this is only the beginning. Partner companies have several thousand people working full-time or part-time on RosettaNet implementations.
"RosettaNet is rapidly becoming a global standard for high-tech B2B," noted Colin Evans, director of e-business strategy at Intel Corporation and RosettaNet chairman. "By the end of the year Intel will be connected to over 20 companies, both customers and suppliers, in the U.S., Japan, Korea, Taiwan, and Europe using RosettaNet standards."
Additionally, more than 150 solution providers who deliver system integration, software development and consulting services are committed to speeding the adoption of RosettaNet standards.
Figure 2: IT Supply Chain Board
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Partner Success Stories
Unlike other standards efforts, which focus only on specific standards components and proprietary solutions, RosettaNet provides a full solution for e-business process standardization - data dictionaries, implementation framework, and business message schemas and process specifications - in robust, open process standards. Perhaps the greatest testament to the success of RosettaNet standards is that partners are operating with them in production and seeing results.
On October 10, 2000, RosettaNet's milestone date for achieving production-system implementation, approximately 80% of IT and EC Board Members had connected with trading partners to implement RosettaNet PIPs.
Hewlett-Packard, a charter member of the RosettaNet consortium and a member of RosettaNet's IT Supply Chain Board, reports that by using RosettaNet PIPs - PIP3A4, which acknowledges receipt of purchase order; PIP3A6, which provides order status; and a pre-release version of PIP3B2, which sends advance shipment and shipper's manifest notifications - process times have been reduced for their company, resellers, and distributors from days to minutes. PIPs exchanged between the company and contract manufacturers are resulting in similar timesaving.
The company is using RosettaNet PIPs in its B2B processes for HP workstations, HP NetServers, and Unix® servers. The HP NetServer Division is using RosettaNet to streamline configuration, pricing, and availability of HP NetServers ordered through HP Select Express. Among the benefits are providing VARs with online access to distributor pricing and Hewlett-Packard availability; offering customers easy, customized quote creation; and enabling quick order placement directly to distributors.
Hewlett-Packard attributes speed, the smooth flow of information, the accuracy of transmitted data, the elimination of redundant data entry, and the ability for more precise planning and forecasting - all contributing to significant operational efficiencies - to RosettaNet PIPs.
Avnet, a charter member of RosettaNet's EC Supply Chain Board, also reports operational efficiencies and reduced process times with the implementation of RosettaNet standards. The company successfully implemented multiple integrated PIPs for various e-business processes with several trading partners in its IT and EC marketing trading network, including General Semiconductor, Hewlett-Packard, Hitachi Semiconductor, and Philips Semiconductors.
Avnet cites that operating with RosettaNet PIPs in production has reduced cycle time by one week for the receipt of new product information as well as cut down on administrative efforts and cycle time for the exchange of design engineering information.
Philips Semiconductors, an Avnet PIP implementation partner, estimates that its implementation of RosettaNet PIPs, which allows customers to view order status and obtain price and delivery information in a standardized way, will reduce the amount of its customer service-related calls by 75%. An EC Board Member and founding member of RosettaNet's SM Supply Chain Board, Philips Semiconductors believes that RosettaNet's process enhancements will save the company millions of dollars.
National Semiconductor, a member of RosettaNet's EC and SM Supply Chain Boards, successfully implemented PIP 3A4, Manage Purchase Order - which provides a process for trading partners to issue, acknowledge, cancel, and change purchase orders - with Arrow Electronics and Pioneer-Standard Electronics. National Semiconductor estimates the monthly volume of PIPs exchanged with trading partners to be in the thousands, providing them with significant cost savings.
EC Board Member Motorola sees RosettaNet as a cost-saving alternative for an industry that otherwise would have to absorb major costs to develop and implement multiple proprietary e-commerce solutions and third-party interchanges for key business processes between trading partners.
Motorola implemented RosettaNet standards with Arrow Electronics to enable real-time access of Motorola marketing information by the Arrow Electronics sales force in the United States and Canada, allowing them to improve customer service with fast, up-to-date product information. Motorola anticipates cost savings for program administration as a result of this automation.
Lucent Technologies, an EC and IT Board Member, views its participation in RosettaNet as an example of how companies can leverage e-commerce technology across many parts of their businesses: "Our use of RosettaNet's PIPs will be key starting with product development through the moment we deliver finished products to our customers."
The company implemented PIP 2A9, which specifies the process for querying EC trading partners for technical information. The PIP enables product designers to send a Web query and immediately receive product-specific technical and business information. The company expects the implementation to contribute to significantly reduced design cycle times.
These are just a few examples of RosettaNet Partners who have implemented RosettaNet standards and are beginning to reap the benefits. As EC Board Member FCI said, "Global standards for our global business serving a global customer base delivering products and services when they are needed, where they are needed, accurately and cost effectively, RosettaNet is the key!"
Figure 3: SM Supply Chain Board
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Global Standards for a Global Industry
RosettaNet is one of the high-tech industry's most ambitious standards implementation efforts, reaching North America, Europe, and Asia. RosettaNet Supply Chain Boards are global in scope, and many regions have established organizations - the Americas, Europe, Japan, Singapore, Korea, and Taiwan - to oversee standards collaboration and implementation in their areas.
RosettaNet plans to launch initiatives in key high-tech sectors in Europe and Asia, including the People's Republic of China, India, Southeast Asia, Australia, and New Zealand, and it continues to identify opportunities to engage adjacent industries, such as automotive, consumer electronics, and telecommunications.
Conclusion
Standards are essential to not only optimize the trading network and realize the full potential of the digital economy but success in e-business today. RosettaNet provides companies with multiple benefits: Its standards offer the potential for strong, dynamic, flexible trading networks spanning international borders, timesaving and moneysaving operational efficiencies, and new e-business. Involvement provides opportunities for industry leadership, influence, and collaboration. Visit www.rosettanet.org to find out how to join the hundreds of companies in the vital industry initiative.
