Enabling B2B Transactions over the Internet
through Application Interconnection: The PRAXIS Project
Yannis Charalabidis1, Vassilios
Karakoidas2, Stephanos Androutsellis-Theotokis3, Diomidis
Spinellis4
1Singular Software S.A., 23rd Km Athens-Lamia Road, Ag.
Stefanos, 14565, Greece
Tel: +30 210 6267400, Fax: + 30 210
6267410, Email: yannisx@singular.gr
2,3,4Athens University of Economics and Business, 76 Patission Str.,
Athens, 10434, Greece
Tel: +30 210 8203370, Fax: +30
2108203664, Email: {bkarak, stheotok, dds}@aueb.gr
Abstract: The paper elaborates on an approach that will enable
the typical Small and Medium Enterprise (SME) to carry out a large subset of
its business transactions with other enterprises, the public administration or
financial institutions over the internet, gaining significant resources that
nowadays are wasted on editing, printing, transferring and re-typing business
documents. The present approach can be characterised as a depth-first,
pilot-oriented attempt to provide practical solutions to the Enterprise
Application Interoperability problems of European SME’s and do so in a
paradigm-building way. Part of the
approach stems out of PRAXIS, a project co-funded by the 3rd Community Support
Framework (CSF) under the Information Society Programme. The project, coordinated by Singular
Software SA, brings together software vendors, research centres, public
administration bodies, banking institutions and user companies in Greece,
aiming to provide a solution that will allow the automation of the
aforementioned transactions with significant productivity results for all the
represented communities.
1. Introduction
As
the functionality and complexity of modern Transactional IT Systems is rising
to meet more advanced requirements, Enterprise Application Interoperability has
become a key issue for most companies, in their quest for overall productivity,
effective knowledge management and
information security [1,2]. Although various attempts have been made by
large European organisations or Enterprises, usually addressing
interoperability as a bespoke solution for legacy systems, very few attempts
seem to address the issue from the aspect of a Small and Medium Enterprise
(SME) or even of a Very Small Enterprise (VSE), companies that constitute the absolute
majority of enterprises in the European
Union [3]. What though may be the case for SME’s and VSE’s in the context of
making their Enterprise Applications more interoperable?
Nowadays, the typical European enterprise
interacts on a daily basis with a multitude of external entities, which include
the administration at local or European level (e.g. Ministries of Finance,
Revenue and Tax Offices, Insurance Agencies, Statistics Agencies, etc),
Financial and Banking Institutions, as well as other enterprises, mainly in the
roles of Business-to-Business supplier or customer. In Greece alone, there
exist 723,000 enterprises, including approximately 700,000 SME’s and VSE’s,
which constitute 97% of the total [4], the average European level being 93%
[5].
Despite
the rising pace at which Information Technology means are being deployed, the
majority of several millions of daily transactions among the above entities are
still carried out in the traditional manner: typically sending the various
transaction documents through mail or fax, manually inserting data in
Enterprise Resource Planning – ERP or Customer Relationship Management – CRM
applications or, at best, manually filling in on-line web pages offered by
Banks or Governmental Agencies. Based on the above inadequacy and on the
absence of enlightening new approaches at the SME level, most of the companies
waste significant effort and resources while not entrusting the Internet and
current B2B (or even B2C) applications for their transactions. But then, why the application software
vendor community does not succeed in responding to the need for really
interoperable, application-to-application interconnected transactional software
systems?
Recent
evaluations and relative research [2] has showed that Interoperability problems
may become very hard to tackle in case more than one of the following patterns
characterise the problem domain: existing legacy systems that were not designed
to work in common; applications belonging to a variety of different vendors; not
well defined legal and statutory framework; a plethora of standardisation
attempts in various levels of completion or adoption; certain cost and
complexity limits – to name but a few existing in the interoperability domain. As a result of the above, one should not be
amazed by the fact that most of the attempts whatsoever concern large
enterprises and result in bespoke, project-oriented implementations that cannot
provide a repeatable solution paradigm.
The
present approach can be characterised as a depth-first, pilot-oriented attempt
to provide practical solutions to the Enterprise Application Interoperability
problems of European SME’s and do so in a paradigm-building way.
2.
Motivation and Objectives
The main objective of the presented
approach is to develop and apply, at least in a pilot operational stage, the
required processes and IT systems that will allow the typical Greek (or
European) SME to carry out typical B2B transactions through the Internet, and
in particular through the seamless interconnection of their Enterprise
Applications with the corresponding applications of other enterprises, the
public administration, and financial institutions. Other objectives include the following:
i. The creation and formal description of
business processes, data transfer means and of a coherent overall architecture
for the interconnection of transactional software applications.
ii. The adoption of the current legal and
statutory framework but also the interaction with it in the form of
substantiated proposals towards the responsible governmental bodies.
iii. The emphasis on security of the transferred
data, on non-repudiation issues involving digitals means of signature, and on
the protection of sensitive information of citizens and companies.
iv. The creation of an easily adoptable and
financially feasible solution for the medium, small and very small enterprises,
through hiding the complexity from the end-user – leading to the development of
low cost, standardised solutions.
v. The pilot application at a proof of concept
level of the resulting infrastructure, in typical users (enterprises, public
bodies, banking institutions)
Part
of the approach stems out of PRAXIS, a project co-funded by the 3rd Community
Support Framework (CSF) under the Information Society Programme. The project brings together software vendors
and e-business system integrators, universities, research centres and public
sector bodies in Greece, banks, as well as typical SME’s from the textile, food
and services sector, aiming to provide a solution that will allow the
automation of the aforementioned transactions with obvious results for all the
represented communities [6].
The
Potential benefits for the companies that will adopt such an approach for more
interoperable enterprise applications will be: (a) A significant reduction in the required time
and effort for carrying out the everyday transactions. It is estimated that,
for a typical SME, this effort will be in the order of several man-months per
year while the gain per transaction time is enormous – from days to seconds.
(b) A significant reduction in the rate of errors that are currently made due
to the repeated data entry and manual interventions in these transactions. (c)
A major decrease in the cost of adoption of e-Business processes for SMEs, as
such productised systems are bound to be made widely available at relatively
small cost.
3. Background
3.1
European Legal Framework and Business
Background
The evolution of the Internet and in
particular the possibility to carry out Internet-based business transactions
resulted in a series of legal issues that concerned the European Union as a
whole as well as the independent Member States. The main issue that needed to
be addressed with respect to electronic business transactions, payments and
document exchanges was the lack of a clear legal framework within which such
transactions would take place, common for possibly all the EU Members. The
rapid rate though, with which technological developments followed one another
did not allow for a timely legal response at an international and national
level [7,8].
Various regulatory steps have recently
taken place in Europe and in Greece in particular to address the above issues,
as the European Union is gradually progressing in a coordinated approach to
address the issue of electronic business transactions by creating a legal
framework within which all transactions will be carried out, and which will be
eventually adopted by the business world across Europe. Central to this approach was the Directive 2000/31/EC
of the European Parliament and of the Council of 8 June 2000, which placed the foundations for
the development of e-Commerce throughout Europe.
In
Greece, as in most of the Member States and certainly in all of the 10 new
Members, newly the local authorities are struggling to adopt the European Union
directives, by adapting the local legal regulations accordingly and through
constantly monitoring – but not driving – local needs.
3.2
Status of SME’s
In order to ensure the wide adoption of a
system supporting transactions between SME’s, a realistic understanding of the
current situation regarding the typical operation of its users is needed. As
depicted in Figure 1, a typical European SME is daily making transactions with
the following main groups of legal entities, in the B2B space:
Figure 1 : SME’s, their transactions and the interacting Legal
Entities
·
Enterprises acting as Customers, thus
receiving goods or services and paying the price or fee, in an overall
transaction characterised as “sale”.
·
Enterprises acting as Suppliers,
providing SME with goods or services, through a purchase process.
·
Banking institutions, assisting in the
management of the SME monetary assets
and the processes of payments or receipts.
·
Certified Professional Accountants
that often offer services to SME’s and also receive/send significant amounts of
financial data from/to the enterprise, for book-keeping and tax-reporting
purposes.
·
The local Government, usually
instantiated as a Tax/Vat Office or Ministry of Finance local authority,
towards which both information and payments should be sent.
·
Other Enterprises, among them SME’s,
for various reasons leading to exchange of business and financial data.
4. Methodology
The methodological, paradigm building
approach presented here and implemented within the PRAXIS project consists of
the following steps:
i.
Representation of the existing
business processes relevant to the project, resulting in Computationally
Independent Models (CIM) represented in various UML descriptions. More than 30 processes have been identified
and described (actors, roles, flows, data, control, etc).
ii.
Partial transformation of the previous
models and representation of the to-be business processes, after the
introduction of an A2A Interconnection System with Servers and Clients
connecting with the existing ERP applications, resulting in a relevant Platform
Independent Model (PIM).
iii. Formalisation of the data exchange, through further analysis of the
business documents and the deployment of XML/B2B models, thus forming XML/XSL
descriptions.
iv. Formalisation of the needed behaviour of the system, represented in
WSDL and UML formats, as another PIM description.
v.
Various design representations and
model transformations at the level of Platform-Specific Model (PSM), for the
system under development (client and server architectures and designs following
the Service-oriented Architecture, SoA) [17], including the partial reverse
engineering of already developed Enterprise Applications (commercially
available mid-market ERP/CRM).
It has to be
noted that the drafting of detailed specifications for the technological basis
and architecture upon which the system will be based (including Web Services
approaches, UDDI/SOAP standards, .NET architectures, JAVA/J2EE architectures
and various development environments) form a part of the on-coming steps of the
approach.
5. Technology
The technological basis for the proposed
system includes the currently available standards and solutions for modelling
of business processes, the modelling and description of the information
exchanged among the enterprise applications (including XML-based hierarchical
languages) and the current technological standards for developing Server and
Peer-To-Peer applications using Service-oriented-Architectures (SoA).
5.1 Data modelling and XML representations
When developing
a solution for enhancing interoperability of existing systems, one has to
choose between (a) instantiating one of the existing XML/B2B standards or (b)
developing a tailor-made solution adhering to the standards, but also designed
to provide the required flexibility while minimizing the system complexity – a
set of characteristics very important to SME’s.
Extending
XML standardisation reviews [9], the currently available standards for business
transactions can be categorised as shown in Table 1, according to whether their
main focus is on business processes / message transactions or on business
documents.
|
Standard
|
Standardisation Body
|
Business Processes
|
Business Documents
|
|
ebXML
|
OASIS
|
ü
|
ü
|
|
RosettaNet
|
RosettaNet
Org
|
ü
|
ü
|
|
xCBL
|
xCBL
Org
|
|
ü
|
|
XBRL
|
XBRL
Org
|
|
ü
|
|
ebisXML
|
BASDA
|
ü
|
ü
|
|
UN / CEFACT
|
UN/ECE
|
|
( ü)
|
|
UN / EDIFACT
|
UN/ECE
|
|
ü
|
Table 1: A categorisation of Business
Standards
ebXML [10] is
a standard proposed and maintained by the Organization for the Advancement of
Structured Information Standards - OASIS. Currently supported by the United
Nations (UN) and other major bodies and organizations, ebXML covers business
processes and message transactions, its strength certainly being the former.
RosettaNet [11]
is an emerging standard proposing a framework to securely exchange documents
between businesses. The framework is based on XML and simplifies the
transaction processes focusing only in security and transport. As a result we
have a client-server model of work, inappropriate for large-scale applications.
ebis-XML [12]
is a standard proposed by BASDA. It provides a suite of messages for conducting
electronic transactions. Covering only the ordering / invoicing processes, it
provides a quick and practical way for the exchange of the core business
documents among enterprises.
xCBL (XML
Common Business Library) [13] focuses on business documents. The standard,
supported by Microsoft, SAP, HP, Sun Microsystems and CommerceOne, provides an
XML-based, comprehensive collection of documents for conducting electronic
transactions.
XBRL (eXtensive
Business Reporting Language) [14] is a standard proposed from OASIS, in an
attempt to describe financial information for reporting purposes. Formerly
known as XFRML (eXtensive Financial Reporting Mark-up Language), XBRL is a
technical specification that allows for the creation of business and financial
reports.
UN
/ CEFACT [15] is the awaited XML-transformation attempt of UN / EDIFACT
business documents. Still in progress, it is bound to use ebXML as the
architecture definition, extending the various messages applying the EDIFACT
experience.
UN / EDIFACT [16] is the oldest and most widely used standard in
application-to-application interconnection, supported by numerous organizations
and businesses. Included in the present review for completion purposes, it
focuses mainly on business documents and provides for an EDI-based method for
message transactions.
After
the initial categorisation of the various XML/B2B standards, an evaluation
“objective function” was created, based on the main objectives of the PRAXIS
project. Among the important factors
one will find: Expressiveness (span of existing processes and documents),
Maturity (adoption by industry and international bodies), Compatibility (degree
of coherence with other standards in the XML/B2B context), Applicability
(easiness of embodiment, provision of material and support), Expandability
(ability to include more documents/processes) and Royalties Independence.
The
above evaluation framework concluded on the differences among the
standardisations and their various scores according to different weighting
scenarios. However, looking at the
not-yet-converging requirements from United States, Europe and Greece and due
to the fact that the types of transactions the PRAXIS system is bound to
support are affected by the specific details of Greek business regulations, the
complete adoption of any of the above standards would offer few advantages, and
would considerably aggravate the implementation process. As a result, the adopted solution consists
of modelling the transactional data in a manner similar, yet not fully
compatible, to xCBL, while in parallel maintaining a detailed mapping of the
alterations.
5.2 System Architecture
The PRAXIS system, as shown in Figure 2 consists of two main
entities, the PRAXIS Clients and the PRAXIS Server. The former provides
end-users (SME’s) with a way to access the system, while the later maintains
the core business logic and the various documents exchanged.
Three types of clients are supported:
·
The Full (or “Fat”) Client, is a
windows-based application that interconnects with the PRAXIS system and the
existing ERP/CRM or relevant transactional enterprise application.
·
The Thin Client is a windows-based
application that provides the basic features of the system, able to work
independently of existing ERP/CRM systems.
·
The Web Client is a web-based,
zero-client application used to access the PRAXIS server and create or view
business documents.
Figure 2 : The PRAXIS
Architecture
The PRAXIS Server implements three major functions:
i.
Registry & Repository,
The Registry
& Repository subsystem provides the means to create and manage the various
user profiles, while also storing and retrieving the various process
descriptions, document templates and actual transaction documents.
ii. Store & Forward
The Store and Forward subsystem provides a mailbox-style mechanism
that receives, stores and sends the various business documents among the
participating enterprises following certain time stamping, acknowledgment,
security, encryption and performance requirements.
iii. Web Front - End
The Web front-end is a web-based interface for providing access to
various groups of users wanting to interact with the PRAXIS Server
(administrators, participating companies, candidate customers, public bodies,
the public etc) each at the right level of security and permissions granted.
5.3 Protocols and Connectors
It
is a vital specification for an interoperability-oriented system to be as open
as possible to future extensions and interconnections. In order to comply with
that demand, the system is designed so as to allow maximum flexibility in
Interconnection Protocols and B2B/XML Standards. Figure 3 shows the protocol stack of the system, where higher
level protocols (such as SOAP, CORBA or their ingredients) can be left
transparent to the Server.
Figure 3: PRAXIS Protocol
Stack
In
an analogous way, as shown in Figure 4, in order to support XML/B2B standards
to appear, a mechanism for the transformation of business documents will be
implemented, using an XSLT (or XQuery) [18] transformation engine for this
purpose.
Figure 4: Business documents transformation procedure
6. Conclusions - Discussion
This paper
presents an approach for making existing ERP/CRM applications of SME’s
interoperable over the Internet. Due to
the nature and complexity of the problem, various methods and techniques are
being deployed: Model Driven and Services Oriented Architecture (MDA / SoA) provide the methodological
framework for research on B2B/XML schemas, assessment and deployment of
existing and emerging standards and final creation of novel implementations –
so standardised that will be affordable and easy to use by the typical European
SME.
Although
goal-driven approaches like the PRAXIS project are likely to provide some
practical, exploitable results within short time frame, this is not the case
when someone envisages a legally compliant, standardised solution that will
function easily within any EU Member State and any sector of the economy. In this case, the maturity of Legal and
Statutory Frameworks, of Business Process and Documents Standardisation as well
as of Information Technology means is
something sought-for.
Towards
this direction, next steps to our approach include further analysis and
formalisation of the MDA steps, classification and structuring of the various
design decisions and patterns, as well as work on the ontological aspects of
the paradigm.
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