In B2B eCommerce, companies exchange electronic business documents (orders, checks, etc. ) and information through Internet frequently between each other. If there is not a common data format for companies to define their data, the exchanges are quite difficult and inefficient. Each company may organise and store data in vastly different styles and formats. It is hard for systems to recognise the information and exchange them with each order.
The others may miss part of the information, or misunderstand the meaning of the documents. Translation software can be used to convert the documents to machine-read formats, and than back to the formats the others prefer. EDI (Electronic Data Interchange) contains this kind translation software, and transfer data over a proprietary network (Kahl and Thomas, 2000). The expenditure of it is high, and it still needs standards in the network.
Without a common data format, it will cost the company a lot of unnecessary money, time and labour. Therefore, the common data format is essential. XML has made the data exchange possible. XML (EXtensible Markup Language) is an extension of the World Wide Web Consortium’s (W3C) Standard Generalized Markup Language, SGML (Greenstein and Vasarhelyi, 2002). Bert Box of the W3C explains that XML is a method for putting structured data in a text file.
XML is a set of rules, guidelines, conventions, whatever you want to call them, for designing text formats for such data, in a way that produces files that are easy to generate and read (by a computer), that are unambiguous, and that avoid common pitfalls, such as lack of extensibility, lack of support for internationalization/localization, and platform dependency (Greenstein and Vasarhelyi, 2002).
The ASC X12 is actively using XML in EDI applications because of its relative ease to translation. XML/EDI provides a standard framework to exchange different kinds of data. The combination of them will benefit companies more (Greenstein and Vasarhelyi, 2002).
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