This chapter introduces XML-based e-commerce standards that have emerged within the past decade. The chapter describes the history of e-commerce standards, and then presents representative horizontal and vertical e-commerce standards by detailing their functionality, and how their development has been shaped by various stakeholders. The chapter also describes the potential for these standards to transform B2B practice by providing three industry examples. The chapter finishes by suggesting directions for future research by describing factors that could influence the future of these standards. Due to the central role these standards are likely to play in future e-commerce activity, most firms will at some point need to become aware of their capabilities, their application, and potential impact. This chapter is intended to provide an overview of the situation as it is understood today, and presents likely scenarios for how these standards may progress.
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E-commerce is fundamentally changing both companies’ business processes and the value chains in which they operate. Greater automation speeds up business processes and makes them more efficient, promising productivity gains—and greater prosperity—both now and in the future. In order to enable e-commerce, common format conventions, or standards, are fundamental to the success of e-commerce.
A standard is a framework of specifications that has been approved by a recognized standards organization (de jure standard), is accepted as a de facto standard by the industry or is one of the open standards (Hawkins, Mansell, & Skea, 1995). Standards provide a blueprint for the future of industries, offering both stability and neutrality to a set of specifications. By providing a target for development, standards reduce the time and cost needed to develop systems and services, increase market access and acceptance, and reduce administrative and materials overhead. In today’s e-commerce, standards have become a strategic tool for delivering innovation, reducing costs, improving the quality of goods and services produced, and opening new business opportunities (Kotok, 2002a, 2002b).
To better understand why standards are crucial to business, consider a relatively simple process: requesting a quote. Typically, the customer requests a product quote by sending its supplier a message with different kinds of specifications. After receiving the message, a supplier could respond by performing three different activities: checking availability of the product in its inventory; sending back the quote to the customer if its inventory matches the specification; and if not, referring the customer to another supplier. These activities are normally carried out by the supplier’s own internal systems that are not visible to the customer. Without a clearly defined dialog between trading partners, the electronic exchange of messages for this transaction would be very difficult to accomplish. Similar to this case, many other transactions and information relevant to e-commerce must also be depicted (or “mapped”) electronically in ways so that they can be exchanged between companies. There could be multiple companies in collaboration with one another along a supply chain. These companies normally have very different internal systems, but need to share some aspects of their business processes and exchange many different types of business documents as part of their interactions, which makes the electronic exchange of messages even more complex.