The Internet will continue to be the driving force behind the ever more rapid expansion of e-commerce. Consequently, only those enterprises that are able to access data rapidly, to integrate and manage this data effectively and to make it available both within the company and externally over the Web will be able to maintain and extend their lead over rivals. But all companies that introduce electronic business are typically confronted with very similar obstacles and restrictions. These are:

• incompatible data formats;
• customized information exchange;
• management of distributed business data;
• inadequate Internet solutions.

Let's take a brief look at each of these aspects and see how XML overcomes some of these hurdles.

Incompatible data formats

The lack of a flexible and universally recognized data interchange format makes is necessary - at tremendous overhead - to convert incompatible and proprietary data formats back and forth between each other. In addition, the information transmitted in these ways may be of differing types. A purchaser, for example, might specify the customer's reference number while the other specifies the full address. Moreover, the orders might be written in different languages or have different layouts. Companies often master this data chaos by manually entering every order in an order processing system. But this hardly satisfies the desired degree of automation necessary to achieve the benefits associated with an automated supply-chain relationship.

A standardized, uniform data format such as XML enables the transmission, utilization and storage of data over the Internet and across company and national boundaries.

Customized information exchange

Even if two business partners have come to an agreement as to how they can access each other's data, implementation of this agreement is often an arduous process. The reasons for this are to be found in the different data formats, the heterogeneous IT infrastructures, incompatible security systems and the large number of "home-made" special solutions. Moreover, the solutions found to permit mutual access to data will always be one-off solutions if interweaving of the business processes is not conducted using a platform- and application-independent language such as XML.

Management of distributed business data

The majority of companies interested in electronic business have large volumes of decentralized heterogeneous data. Access to and the ability to search for specific details are often restricted by the actual data format itself, by the type of database used or by the operating system environment. Furthermore, companies are today faced with the decision as to how and where they should store new data. Users have often made the painful experience that, without a uniform database concept, they quickly put themselves in the difficult position of having to fragment data and, consequently, losing the original context in which the data once stood. With the aid of XML and a solid database concept, it is now possible to access distributed and multi-structured data. To do this, the system has to be set up to store all possible data types and formats, as well as to integrate data from existing external database systems and applications.

Inadequate Internet solutions

Despite the obstacles cited above, many companies have recognized the enormous potential of introducing electronic business processes and have decided to actively eliminate their problems with complex and expensive scripting and gateway technologies (e.g. CGI). XML greatly simplifies the task of gaining access to distributed data.

Gateways are programmed to read data from different storage media, files and databases, in order to process them together. These solutions are error-prone, seldom reliable, difficult to scale and extremely complicated and costly to maintain. All in all, they are ill equipped to cope with the growing volumes of data to be faced in the future.

Scripts are equally as bad, because each script has be developed for a specific task on the target system in question and therefore also requires a very high level of maintenance. Concentrating the knowledge required for this with just a few specialists brings about another additional commercial risk, which you can reduce to a considerable degree by employing common standards such as XML, for instance.

Internet solutions created and put to use in the past will, in the short and medium term, certainly not be seen as the first choice for guaranteeing reliability, maximum performance and scalability for electronic business. In anticipation of the massive increase in business transactions that will be taking place in the near future, solutions such as CGI scripts, etc., will be unworkable in the long term.

XML is not the solution to all problems, but it is a massive step in the right direction. XML has been developed with the aim of eliminating the restrictions cited above and of making the dream of global electronic business come true.