The Big Bang

As Covisint attests, building the"smarter enterprise" begins by replacing supply chain friction with harmony

By Justin Kestelyn

Continued from Page 1

IE: Based on what you described, Covisint sounds like it's much more than a trading network. It sounds more like a portal into the supply chain, regardless of which procurement processes the consumer is involved in.

Vasconi: That's the vision. Now it's a matter of rolling up our sleeves and making it happen.

But here's the problem: Covisint is just one among many exchanges based on an XML messaging bus. As you know, there are at least five competing standards out there. "XML standard" is definitely an oxymoron.

IE: Let's talk about that challenge for a moment. What is Covisint's position on XML schema?

Vasconi: We don't view ourselves as a standards organization; in fact, we are absolutely committed to not creating an XML standard. We do need a standard for the industry, however, and ideally, I'd like to see an XML standard across industries. So we're having what I consider all the appropriate conversations with RosettaNet and the other standards bodies.

Now the knock on a lot of standards committees is that they're too slow and often impractical. That's what we're trying to add to the equation: We're trying to be the guys out here saying, "Hey, we're trying to implement this standard in production for real customers, and these are the things you need to do to make that a standard across our industry. And by the way, guess what? We only want one of them." In the short term, we've had to pick and choose among the standards that are out there. For now, we think ebXML is the way to go. [See the sidebar, "First Among Equals?"]

IE: Will Covisint XML messages emulate paper documents, or will they reflect a true data modeling implementation?

Vasconi: We're not quite sure. Some of the XML standards are definitely taking the paper-based approach, but that's not really very robust. You're probably going to see a combination of both approaches. Ideally, we would love to have XML schema based on a data model. I just don't know whether we're going to be able to totally achieve that goal.

IE: Do you plan to offer analytic services that would draw on the transaction repository to help customers optimize their supply chain interactions?

Vasconi: Analytic services will be a great line of business for us in the future. That being said, from our standpoint, customers own their own data. We're not going to take a couple of customers' data, aggregate it, and sell it to somebody else. No exchange is going to do that and stay in business.

Nevertheless, we can add a tremendous amount of value. Because again, our value proposition is an integrated application platform where your supply chain management application can talk to your procurement and collaborative product design applications. With that integration, you can do some data mining, in-depth data analysis, or even gaming-type analysis of the data you can pull out of there based on a customer or perhaps a series of suppliers. Perhaps some members that collaborate in the supply chain will all get together and aggregate their data. That's going to be a tremendously powerful tool.

We're not there today, and probably may not get there this year, but I definitely think that that's going to be a huge benefit to the industry.

IE: Covisint is a significant factor in the big automakers' transition toward the build-to-order manufacturing model. What problems will it solve in that challenge?

Vasconi: I'm a huge proponent of build-to-order. I think it's going to revolutionize the auto industry to the same extent the assembly line did.

We are a major enabler of build-to-order because we can bring multiple tiers of the supply chain to the OEMs, and ultimately, to the consumer-dealer relationship. The OEMs have done a lot of great work on their customer-facing Web initiatives, getting consumer demand online. But now they can't get all the way there without us or without somebody like us: Our ultimate role is to connect the consumer to the supply chain through the OEM and the dealer relationship. We can accelerate that process because we can serve as the common unifying force across the auto industry by lowering everybody's costs through economies of scale and the adoption of standards.

IE: But data sharing goes against the grain for most so-called trading partners these days. For example, BMW and Honda have identified security concerns as a reason for nonparticipation in Covisint. How will you break that cultural barrier?

Vasconi: It's all about education: We have to help our customers understand the difference between real risks and perceived risks, and that we have technology and policies in place to address those real risks. We also need to help them understand that some of the perceived risks are either no greater than those implied by the status quo, or that doing business electronically gives you a level of privacy or security that you may think you have today, but really don't.

It's a slow process because we have to win them over one by one. But I absolutely believe that the digital collaborative environment we are creating is more secure than the current environment. In fact, if companies were to closely examine their current business processes, most of them would discover that they're not overly secure.

Technology doesn't solve all those problems, but it can close some of the holes. It can obviously create some problems, too. But as a technologist, I'm confident that we can protect both the security and the privacy of our customers' data. My challenge is to convince them of that fact.

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