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RosettaNet: Teaching businesses to work together

  • October 1, 1999
  • By Lauren Gibbons Paul
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Software and hardware companies are already beginning to build RosettaNet support into their products. For example, SAP AG recently announced that its R/3 enterprise resource planning application will support RosettaNet by the first quarter of 2000.

It's about business, not technology

RosettaNet is the brainchild of CEO Fadi Chehadé, who spent years at giant technology distributor Ingram Micro Inc. prior to founding RosettaNet in 1997. Chehadé had become frustrated with the enormous manual effort it took just for IT companies to do business with each other. Automating suppliers' procurement of direct goods would save millions of dollars and improve margins for all in the computer industry, he reasoned.

Lessons learned about RosettaNet
Play nice. The RosettaNet initiative requires companies to work closely with their competitors. Check your ego and your doubts at the door.

Business rules. Participating in RosettaNet requires making decisions about a host of business processes. Leave the technology people at home.

The view from the top. RosettaNet is a top-down affair. Only upper-level executives are invited to the board members' table.

Using RosettaNet Partner Interface Processes (PIPs), which define a range of common business processes used by companies in the IT supply chain, will enable IT companies to be more flexible and thereby offer a broader menu of services to their trading partners. Since they no longer have to build custom interfaces to their partners, computer companies that adopt RosettaNet will find it easier to establish relationships with new suppliers--as well as quickly dismantle them if they don't work, says Chehadé.

RosettaNet is very much a top-down, as opposed to a grassroots, movement. "RosettaNet has an unprecedented level of executive support. I've never seen that with any other standards group," says Jim Oravec, senior manager in the Mountain View, Calif., office of KPMG LLP, a RosettaNet board member and execution partner.

Chehadé set three requirements for membership in the RosettaNet consortium: The company had to send one of its "C-level" executives such as chief executive, chief operating office, or chief information officer to participate actively, it had to pony up $20,000 in dues annually, and everyone had to agree to implement whatever standard the group created. The consortium's managing board consists of 34 CEOs, CIOs, and senior executives representing computer manufacturers, software companies, resellers, distributors, and even some end-user companies (see "Impressive roll call").

Senior executives had to be involved because implementing RosettaNet concerns business first, and technology second, says Oravec. For example, once a company agrees to use RosettaNet PIPs, it will immediately have to decide whether to move to the standard parts and product classification schemes the consortium has adopted. The company does not have to switch all of its systems, says Oravec, but it will have to provide a way to map from its proprietary parts-numbering scheme to the standard Global Part Identification Number (GPIN) recognized by other industry members.

"When you start to look at the implications of this, these are not technical issues. You start to have to change the way you do business," Oravec says. "Leaving it to their IT managers doesn't cut it. The business people are going to have to drive this stuff."

Impressive roll call

Current RosettaNet board member companies include:

American Express
Arrow Electronics Inc.
Avnet Inc.
CHS Electronics
Cisco Systems Inc.
CompUSA Management Co.
Compaq Computer Corp.
Deutsche Financial Services
Federal Express Corp.
GE Information Services
Hewlett-Packard Co.
IBM Corp.
Inacom Corp.
Ingram Micro Inc.
Insight Enterprises Inc.
Intel Corp.
Marshall Industries
MicroAge Inc.
Microsoft Corp.
Netscape Communications Corp.
Office Depot Inc.
Oracle Corp.
pcOrder.com Inc.
Siemens AG
Solectron Corp.
Tech Data Corp.
3Com Corp.
Toshiba America Information Systems Inc.
United Parcel Service of America Inc.
Making progress

Mapping out computer industry business processes is a major undertaking, but one the RosettaNet consortium already has well in hand. In June, RosettaNet completed a 3,600-word dictionary that will form the foundation of its common business language. Previously, every distributor and manufacturer had its own proprietary dictionary of terms resulting in redundant, overlapping efforts by individual companies as well as confusion in the procurement process due to each company's unique terminology. The RosettaNet consortium has agreed to adopt the GPIN system to standardize part numbers across the industry and to implement a company identification system designed by Dun & Bradstreet Corp. Computer industry companies that agree to implement RosettaNet will have a variety of methods to choose from, such as adding extensions to their databases.

The consortium has also defined six "clusters," or high-level business interactions such as product introduction, marketing management, order management, and inventory management. Each cluster is broken down into segments, or business processes. Drilling down further, each segment contains about six PIPs. The group has defined about half of these PIPs, and several member companies are in the midst of pilot projects--collectively called eConcert--to exchange data in PIP format.

This summer, Microsoft Corp. and IBM Corp. were the first companies to complete a test exchange of PIP data. This initial test allowed the manufacturers to add new products--including standardized technical specifications and part numbers--into their partners' catalogs.

Other pilot results are beginning to roll in. MicroAge just completed an eConcert pilot with American Express, one of its customers. And giant electronics distributor Marshall Industries began trading data with manufacturer Solectron Corp. using RosettaNet PIPs embodied in webMethods Inc.'s B2B product suite. According to RosettaNet, chip manufacturer Intel Corp. of Santa Clara, Calif., and computer and component distributor Arrow Electronics of Melville, N.Y., have also successfully used the specification to send and receive data over the Internet. These companies are ahead of their fellow RosettaNet members, 38 of which have agreed to implement their PIPs by "eConcert Readiness Day," which is Feb. 2, 2000.



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