Intelligent Enterprise

Inside B2B

The way things usually go, transactional systems under construction today will soon be complemented by business intelligence (BI) services. According to Hurwitz Group analyst Philip Russom, the Internet-enabled supply chain is likely to be particularly fertile ground.

This eventuality motivated Christopher Stone, formerly a Novell EVP and the founder and CEO of the Object Management Group, to launch Tilion Inc., an application service provider (ASP) for business-to-business (B2B) commerce-based analytics. The company plans to announce service availability in Q1 2001.

Tilion intends to address some unique problems. For example, unlike "traditional" transaction data, the information that fuels B2B analytics is not captured within one organization. Rather, it's distributed among potentially hundreds of partners, all with different internal data models and processes. As Stone explains, "You know what people have gone through trying to build data warehouses. Imagine trying to do that across hubs and trading partners — which is why it has to be done as a service. And it's got to be done with an enveloping technology, such as extensible markup language [XML]."

Tilion will capture XML-wrapped data from various sources (such as a participating corporation, a public Internet exchange platform, or a private EDI hub), transport it via the Internet to the Tilion Intelligence Center, aggregate the data appropriately, perform analysis, and generate reports. Analytics can include fill rate performance, advance ship notices, and variances between items ordered vs. items shipped. Reports are rendered in HTML from the XML source.

XML, the ASP model, the emergence of B2B trading exchanges, and the knowledge that these exchanges would eventually seek analytic tools were the magic combination that inspired the Tilion concept. But at first, it looked as if Stone may have been too prescient for his own good. According to Russom, when the company formed in January 2000, Tilion's revenue model was based on transaction volume and focused on public exchange hubs as its prime customers or partners. However, transaction volume is still very low on public exchanges. According to Russom, "Public trade exchanges for B2B are going to ramp up; in two to three years, there will be impressive volumes of sales going on there. But today, it's just too early. That's a dilemma for Tilion."

Tilion executives, knowing that indefinite rounds of VC financing are no longer a certainty, rethought their strategy and decided to target private EDI networks as well as open B2B exchanges. One of Tilion's first customers, which Stone would not identify by name but described as "the most valuable company in the world" (in terms of market capitalization), is an EDI-based hub.

The company does not perform EDI-to-XML transformations for customers. Rather, it works with partners such as Netfish Technologies Inc., XML Solutions Corp., and Mercator Software Inc. to put data into the right package. Russom says that writing the parsing instructions to transform a set of EDI document types to a given XML format takes about a day.

Tilion's "In the Net" analytics promise to radically cut down the time it takes to gather intelligence on the supply chain. Processes that have been taking 90 days could instead be done in minutes, delivering reports to all supply chain partners, at the same time, with a single version of the "truth."

The company faces formidable challenges, however. First of all, it's unclear whether Tilion offers a differentiating service; it uses off-the-shelf technology, such as Business Objects' WebIntelligence and Oracle8i. Tilion will clearly have to fight to achieve dominance when B2B analytic services become more popular.

Furthermore, the company may also have to address the "broken migration path," according to Russom. Although larger customers are attracted to the ASP model, if the application involved becomes mission critical for them, many of them will end up buying the application and installing it behind the firewall. With Tilion, that migration path -- from service user to application user -- is cut short by the fact that Tilion is by its nature a service. Whether larger customers will be willing to stick with an ASP for the duration is unclear. -Jeanette Burriesci