__ ____________ ,/X6. /9fls WORLD BANK TECHNICAL PAPER NUMBER 317 Information Technology and National Trade Facilitation Guide to Best Practice Robert Schware and Paul Kimberley ,, I I,- , J A5,IIIII/ _a~~~- --f - '_ RECENT WORLD BANK TECHNICAL PAPERS No. 237 Webster, The Emergence of Private Sector Manufacturing in Poland: A Survey of Firms No. 238 Heath, Land Rights in C6te d'lvoire: Survey and Prospectsfor Project Intervention No. 239 Kirmani and Rangeley, International Inland Waters: Conceptsfor a More Active World Bank Role No. 240 Ahmed, Renewable Energy Technologies: A Review of the Status and Costs of Selected Technologies No. 241 Webster, Newly Privatized Russian Enterprises No. 242 Barnes, Openshaw, Smith, and van der Plas, What Makes People Cook with Improved Biomass Stoves? 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Copyright C 1995 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing November 1995 Technical Papers are published to communicate the results of the Bank's work to the development com- munity with the least possible delay. The typescript of this paper therefore has not been prepared in accor- dance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibili- ty for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatso- ever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy por- tions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U.S.A. The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list (with full ordering information) and indexes of sub- jects, authors, and countries and regions. The latest edition is available free of charge from the Distribution Unit, Office of the Publisher, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Iena, 75116 Paris, France. ISSN: 0253-7494 ISBN: 0-8213-3534-0 Robert Schware is Senior Informatics Specialist for The World Bank, Finance and Private Sector Development Vice Presidency, Industry and Energy Department, Telecommunications and Informatics Division. Paul Kimberley is an electronic commerce consultant to the division and principal of Paul Kimberley and Associates (PKA). Comments on this document may be directed to: Robert Schware, Senior Informatics Specialist, Telecommunications and Informatics Division, Industry and Energy Department, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, Tel: (+1 202) 458-0794, Fax: (+1 202) 477-3379, Internet: rschware@worldbank.org Contents Foreword v Costs of Installing EDI 22 Abstract vii The Advocacy and Implementation Model 23 Acknowledgments ix Cost Summary for a 20-Partner Grouping 25 Abbreviations and Acronyms xi Advocay and Implementation: the Last Word 26 A Partner's Internal EDI Costs 26 1 LEGAL AND REGULATORY REQUIREMENTS 1 The Dilemma 26 Alternatives to EDI 27 The Legality of EDI 1 Intermediaries 27 Agreements 1 Low Tech Infrastructure 28 International Law 2 Broader Technology Initiatives 28 Contracts 2 The Hypothesis 28 Evidence 3 The Model 29 Data Disclosure 3 Not So Low Tech EDI 32 Legislation 4 Voice Processing: Telephone Technology 33 Conclusion 4 Scanning and Image Technologies 33 Other Technologies 35 2 SKILLS AND TECHNOLOGY Conclusion 36 INFRASTRUCTURE 5 ANNEX 1: THE CASE STUDIES 37 Technology and Skills Inventory 5 Key Technology and Support Elements 5 Methodology 37 Best Practice 6 Argentina 37 Barriers to Use and Participation 7 Current Status 39 Discussion 40 3 LOCAL BUSINESS CONSIDERATIONS 9 Australia 40 Trade Facilitation 41 Government and Local Business Practices 9 Tradegate 41 Culture and Religion 10 The Organization 41 External Influences 10 The User Community 42 Role of Government 42 4 INVESTMENT COSTS AND BENEFITS 11 VAN Interconnect 43 Vendors 43 Costs and Benefits 11 Industry Associations 44 Cost and Revenue Categories 13 Assessing Tradegate 44 Three Typical Models 14 Lessons from the Australian Experience 44 From Different Perspectives 16 Brazil 45 Summary 18 Current Status 46 Conclusion 19 Discussion 47 Chile 47 5 TECHNOLOGY AND COST OPTIONS 20 Current Status 48 EDI's Brick Wall 20 Discussion 49 Number of EDI users and Hong Kong 49 Message Volumes in Australia 20 Tradelink 50 fii Summary 51 EDI Gateway and Service Functionality 75 Hungary 52 Vendors 75 Trade Facilitation 53 Other Media 76 Current Status 53 A Model for a Gateway-Rollout Service 77 Discussion 54 Summary 77 Malaysia 55 Current Status 55 ANNEX 4: SAMPLE TERMS OF REFERENCE FOR Experience 56 ELECTRONIC TRADE FACILITATION SYSTEM, Discussion 56 IMPLEMENTATION, SUPERVISION, AND Mexico 57 MID-TERM REVIEW 78 Current Status 58 Discussion 58 Background 78 New Zealand 59 Assignment Objectives 79 Singapore 59 Audit and Quality Assistance 79 Current Status 60 Awareness and Training 79 The SNS Business Case 61 Marketing and Business Plan 79 SNS Running Costs 61 Scope of Work 79 Business and Cultural Factors 62 Reporting Relationships 80 Taiwan (China) 63 Deliverables 80 Current Status 63 Mid-term Review 80 Summary 64 Desired Qualifications of Consultant 81 ANNEX 2: IMPLEMENTATION CONSIDERATIONS ANNEX 5: UN-EDIFACT 82 AND TIME FRAMES 65 Whose Standard: Yours or Mine? 83 Technology Project Plan 65 Message Standards 84 Trade Facilitation: EDI Project Plan 65 The Components of EDIFACT 86 Information Gathering 65 The UN-EDIFACT Reference Model 86 Reverse Engineering 67 UN-EDIFACT Syntax 88 Reengineering 67 Data Elements 88 Implementation 68 Data Element Values and Code Lists 90 Technology Issues 70 Composite Data Elements 90 Time Frames 70 Segments 91 Qualifiers 92 ANNEX 3: A SAMPLE TECHNICAL PROPOSAL 72 Messages 93 The Organization 94 Definitions 72 Developing a Message 96 Requirements 73 UN-EDIFACT Deliverables 98 Functions 74 Gateway Services 74 ANNEX 6: GLOSSARY AND ABBREVIATIONS 99 iV Information Technology and National Trade Facilitation: Gutide to Best Practice Foreword Information technology is demolishing territorial boundaries today, and bringing nations together in a single global community-but a community more fiercely competitive than ever before. Change is the order of the day. Trade, banking, and telecommunica- tions are being deregulated. Transport is getting faster, flexible, and available. Reengineered business systems are taking advantage of quick- response and just-in-time strategies; and cargoes, containers, and goods are being tracked around the globe by a variety of automatic identification devices. Electronic data interchange and electronic commerce are replac- ing the slower, more tedious paper trail. Countries now compete in global markets regardless of time zones, national boundaries, and distance, as products and processes are redesigned to adjust to the new business environment. The increasing pressures from the global market are forcing everyone to adopt these new trade practices and standards. Customs, treasuries, and lawmakers are having to reinvent themselves to adapt to the concept of electronic commerce. Nations are adjusting to new methods of finance and tax gathering, opening up their telecommunications systems to private interests, and learning to take full advantage of harmonized procedures, standards, and practices for trade documentation. None of this is easy, but for many countries of the world, it is a matter of survival. The present report, Information Technology and National Trade Facilitation: Making the Most of Global Trade, attempts to make the process of change smoother. It examines costs, benefits, and best practices in applying information technology to trade facilitation. It provides definitions and introduces basic concepts and issues in the substitution of electronics for paper, in the effort to achieve cost-effective international trade. The companion volume, Information Technology and National Trade Facilitation: Guide to Best Practice, is a practical aid for governments to understand the tasks, costs, and time involved in setting up and imple- menting national trade facilitation initiatives. Together the reports offer essential information ,or decision makers promoting better trade practices in concert with international standards, common practice, and most important, specific national goals. JEAN-FRANCOIS RISCHARD VICE PRESIDENT FINANCE AND PRIVATE SECTOR DEVELOPMENT THE WORLD BANK NOVEMBER 10, 1995 V ABSTRACT Designed for use by managers and technical staff involved in the imple- mentation life cycle of an electronic commerce project, this volume begins with a section on legal and regulatory requirements, covering the legality of EDI and electronic commerce and the various agreements which deal with international trade. A second major section considers the skills and technology infrastructure necessary to participate in IT assisted best practice trade facilitation projects. Local business issues are considered next, including government and local business practices, culture and external influences. A discussion of investment costs and benefits at national, industry, and end user levels is followed by a section on technological and service alternatives for smaller, less technologically advanced organizations. Four Annexes contain a series of national case studies; implementation considerations and time frames in order to illustrate a typical project plan; a typical technical proposal covering vendor and end user require- ments; and sample terms of reference for a project review, based on an actual World Bank project-in-progress. A fifth Annex discusses in some detail the need for and the design and application of EDI standards as used in trade facilitation applications. The volume concludes with a glossary of terms and abbreviations used within both reports and in the implementation of best practice, IT-based facilitation applications. vii ACKNOWLEDGMENTS Many organizations have been generous in donating their time and sharing their experiences with the authors of this report. In an introductory volume of the report, Information Technology and National Trade Facilitation: Making the Most of Global Trade, there is a list of all cooperating agencies, organizations, and individuals who contrib- uted information and experiences. They include many international agencies, international industry bodies, government departments, technical and trade associa- tions, vendors, and a wide variety of systems users from banks, corporations and governments. In addition, we received the help of many hardware and software vendois, network services vendors, tele- communications companies and authori- ties, and private individuals. Valuable contributions have been made by profes- sional staff from within the Bank, particu- larly Hans Peters and Francoise Clottes. We would like to thank Shampa Banerjee for a fine job of editing. It is impossible to research global experiences without the help of the pio- neers. We gratefully acknowledge this help. ix ABBREVIATIONS AND ACRONYMS ACS Automated Commercial System APEC Asia Pacific Economic Cooperation ASYCUDA Automated System for Customs Data BT British Telecom CAS Community Access Service, Hong Kong CIM Computer-Integrated Manufacturing CNAB National Council for Banking Automation, Brazil EAN European Article Numbering EANCOM European Article Numbering Communication ECE Economic Commission for Europe EDI Electronic Data Interchange EDIFACT EDI for Administration Commerce and Transport EFT Electronic Funds Transfer EFTA European Free Trade Area EFTPOS Electronic Funds Transfer at Point of Sale ERS Evaluated Receipt Settlement EU European Union FACET Future Automated Commercial Environment Team FDP Finance and Private Sector Development GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product IBM International Business Machines ICC International Chamber of Commerce ID Identity III Institute of Information Industry, Taiwan (China) ISO International Standards Organization IT Information Technology JIT Just in Time (inventory control) LOCODE United Nations Location Code MBK Hungarian Bank for Foreign Trade MOF Ministry of Finance, Taiwan (China) MSTQ Metrology, Standards, Testing, and Quality MTCW Ministry of Transport, Communication, and Water Management, Hungary NAFTA North American Free Trade Agreement NCB National Computer Board, Singapore OECD Organization for Economic Cooperation and Development OFTP Open File Transfer Protocol PAXLST (UN-EDIFACT) Passenger List PSA Port of Singapore Authority QR Quick Response RFID Radio Frequency Identity SITPRO The Simpler Trade Procedures Board xi SME Small and Medium Enterprise SNS Singapore Network Services SPEDI Shared Project for EDI, Hong Kong TDB Trade Development Board, Singapore TP (UNCTAD) Trade Point UN United Nations UNCTAD United Nations Conference on International Trade and Development UN-EDIFACT United Nations EDI for Administration Commerce and Transport U.S. United States U.K. United Kingdom VAB Value Added Banking VAN Value Added Network VANS Value Added Network Service WCO World Customs Organization WTC World Trade Center WTO World Trade Organization WWW World Wide Web Xii Information Technology and National Trade Facilitation: Guide to Best Practice 1 Legal and Regulatory Requirements Over the last 20 years, an intensive debate * Should the law be amended for its has surrounded the legal issues in the application to EDI? substitution of electronics for paper. There are many good books and a plethora of There is a third group of issues which papers on the subject. The development of also requires discussion: privacy, confiden- national models for trading partner agree- tiality, negligence and protection of intellec- ments, efforts of international agencies such tual property. as the United Nations Conference on Trade It is now generally acknowledged that and Development (UNCTAD) and the legal considerations do not present any World Trade Organization (WTO) in rede- major impediments to EDI implementation, fining international trade and maritime but organizations do need to recognize laws, and the emerging national trend when it is prudent to seek advice. There are toward redefining evidence acts and the now well-tested models that would help to rules of evidence under electronic com- develop EDI guidelines and agreements merce, make this a very dynamic topic. In practically and realistically. addition, technological trends of cryptogra- Wherever statutes require documents to phy, security and signature devices both be written or signed to be legally effective, help and confuse the issues further. these were originally enacted to preclude This section is intended as a basic oral communication, not to exclude elec- introduction to some of these legal issues. tronic communication, which could hardly Anyone requiring advice should seek have been foreseen up to 20 years ago. The guidance from a professional. flexibility of commercial law will generally ensure that the writing and signing require- THE LEGALITY OF EDI ments will not be a major inhibitor for EDI. Agreements such as trading partner Any discussion concerning the legality of agreements, designed to cover the transi- EDI raises the question of how EDI systems tion from paper to electronic trading may accomplish the traditional legal between organizations may be informal or purposes of paper communication. These formal. At both national and international are typically concerned with authentication levels there is a trend toward greater use of and permanent storage of information; trading partner agreements, dealing specifi- communication of trade terms and condi- cally with commercial and technical issues. tions; and compliance with laws that Many national EDI associations now require certain legal information to be have appropriate national trading partner "written" and "signed." model contracts for use by their members. On closer examination other issues arise, such as: AGREEMENTS * How should trading partners and net- Many of the national models were based on works divide risks for errors among the early efforts of the International Cham- themselves? ber of Commerce (ICC). As long ago as * How will government record storage and 1987, ICC developed a set of voluntary control requirements be applied to guidelines for international transactions: electronic communications? the Uniform Rules of Conduct for Inter- * What will replace the hard copy audit change of Trade Data by Teletransmission trail? (UN-CID). The rules were useful as general Legal and Regulatory Requirements 1 principles, but they have been substan- * Should there be rules on signature? tially reworked for national models. They sought to define an acceptable level of Rules on applicable law and for dispute professional behavior and to secure a resolution have since been added by other common approach and identified some of authorities. the problem areas as risks in transmission; acknowledgments; return receipts; secu- INTERNATIONAL LAW rity; data logging; and storage. The objectives for many model agree- At the national level, service providers and ments and for much of supporting control others are subject to normal legal liability system design include: principles but the international situation is complicated by the question of the choice * system reliability and security; of law. * ensuring that network(s) have the Three connecting factors have been necessary level of checks and controls; used by various legal systems to determine * maintaining a detailed audit trail which law should obtain in an interna- consisting of a mixture of acknowledg- tional tort: the law of the forum in which ments, track-and-trace numbers, audit the case is brought; the lex loci delici (the logs and network reports; law of the place where the wrong oc- * systematically matching and reconciling curred); and the so-called "proper law" or audit trail information with messages; a variation on this concept (which is * investigating inconsistencies and record defined differently, for instance, in English reconciliations; and American law.) * keeping an original log of data sent and In the current legal situation a claim for received; damages could be differently decided * regularly auditing the system for simply because of the different connecting weaknesses in reliability and control. factors in the forum selected. The court itself may decide which legal system The UN-CID recomendations for should apply. formulating a trading partner agreement emphasized the following concerns: CONTRACTS * There is always a risk that something EDI is changing the way that businesses may go wrong. Who should carry that negotiate and agree contracts. Technology risk? Should each party carry its own or is also changing some of the potential for would it be possible to link risk to conflict. These changes raise issues of insurance or to a network operator? control, ownership and liability. * If damage is caused by a party failing to It is important to determine exactly observe the rules, what should be the when a contract or agreement has been consequences? This is partly a question made. Regulations may be applied in some of limitation of liability. It also has a jurisdictions which distinguish between bearing on the situation of third parties. instantaneous communications and de- * Should the rules on risk and liability be layed communications. covered by rules on insurance? EDI technologies permit multiple, * Should there be rules on timing, that is, simultaneous transmissions and receipts. the duration within which the receivers Any number of offers to tender may be should process the data, and so on? made around the world and the offerer * Should there be rules on secrecy or may demand responsive bids in diminish- other rules regarding the substance of ing time periods. the data exchanged? EDI standards bodies generally dis- * Should there be rules on a professional claim responsibility for deciding if or nature such as the rules applicable to when the interchange of data forms a the banking and securities industries? contract. In the United States the EDI * Should there be rules on encryption or Association's Programming Guide states: other security measures? "The legality of EDI data as binding 2 Information Technology and National Trade Facilitation: Guide to Best Practice contracts is left to the marketplace and * Value Added Networks (VANs) can negotiation between individual buyers and keep records of messages. For instance, sellers, shippers and carriers, payers and the SWIFT system for international fund payees." transfers keeps an inventory of data. The Bolero program currently under Networks can archive audit trail or way in Europe is a rare example of tech- message content data for legal and nologists, lawyers and legislators working auditing purposes, subject to user together to help adapt existing law to the acceptance, disclosure procedures and new technologies of EDI. Bolero has been privacy legislation. awarded a grant of ECU1.83 million * Each user can keep a data log of mes- (US$2.6 million) by the Economic Commis- sage content, electronic signatures and sion for Europe (ECE)to test electronic audit and control information (the UN- alternatives to maritime documents such CID rules require use of a data log). as the bill of lading and the sea way bill. * An audit trail can be maintained as Bolero is based on the United Nations evidence of what happened to the data EDI for Administration Commerce and between receipt and final archiving. Transport (UN-EDIFACT) IFTM (Trans- * Cryptography can be used to inhibit port) messages and central registries for data fabrication. bills of lading and individual subscribers to the system. Many banks today only An important debate at the national require confirmation that their counterpart level concerns evidence law. The role of has electronic access to the bill of lading; documentary evidence in commercial the sea way bill is now recommended for disputes, in trade practices litigation, and use in every case except where there may in revenue proceedings (for example, be a need for a document of title. Bolero is income tax, sales tax and customs and aiming to solve that particular problem. excise matters) is currently crucial. Legisla- tive changes are necessary in order to EVIDENCE overcome this hurdle. Paper documents are traditionally ac- DATA DISCLOSURE cepted as undisputed evidence. Paper is long lasting and normally allows changes Considerations of data disclosure under or additions to be clearly visible. Electronic the existing laws involve data content and messages, being intangible, are fundamen- contractual obligations for confidentiality. tally different. The data may lead to legal issues when Paper and electronic networks are they contain erroneous information, merely media that carry information. As defamatory or slanderous content, confi- such, it is possible to give electronic dential material or contractual liability networks characteristics which may make disclaimers by providers. them equal or superior to paper, not only Many EDI users impose contractual as carriers of information, but also as obligations to keep all private trade data evidence. However, a legal technicality- confidential, although such confidentiality the best evidence rule-may also question clauses rarely apply to data moving in all the admissibility of an EDI record. The directions. At the same time, providers best evidence rule generally requires that maintaining data records of EDI activity in the original of a writing is presented as different jurisdictions may be subject to evidence. At the same time, computer different national laws regarding disclo- output is acceptable as court evidence sure. when supported by technical witnesses. There may be other considerations, There are precedents to the admissibility of such as: such evidence, for example, the Watergate and the Iran Contra trials. * international confidentiality principles; To enhance the credibility of EDI * transborder data flows; records the following external techniques * technology transfer restrictions; can be applied: * allocation of loss; Legal and Regulatory Requirements 3 * intellectual property. with electronic data. * The need to protect the public from LEGISLATION damage which may arise from electronic communications such as in the areas of Although there is nothing yet that can be privacy, consumer protection and infor- described as a body of EDI law, legislation mation confidentiality. on EDI matters may fall within these * The need to protect intellectual property categories: such as computer software and design. * The need to meet international obliga- * The need to facilitate the admission of tions, such as the OECD privacy rules electronic communications as evidence in which cover transborder data flows. court. * The need to formulate rules about how CONCLUSION people can communicate electronically with governments, including require- If correctly planned and implemented, EDI ments to maintain electronic records, an can answer all fundamental legal objections area increasingly important to revenue which may be raised. However, it is indis- authorities such as taxation and customs putable that much of the law needs revision authorities. to be consistent with EDI, even if in most * The need to prohibit unauthorized access cases EDI can be safely used before the to computers and unlawful interference laws are changed. 4 Information Technology and National Trade Facilitation: Guide to Best Practice 2 Skills and Technology Infrastructure This chapter categorizes the skills and local operations of an international VAN. technology infrastructure required in Or it may be necessary to install a purpose establishing EDI for trade facilitation. As it built system. Naturally, if this were the may be even more useful to know why case, further skills and specialist personnel certain skills are needed and how they will would be necessary. be employed, this section has been orga- The most important technological nized in three parts: the introductory skills infrastructure requirement, apart from the and technology resource catalogue; a EDI host, is a modern telecommunications description of best practices in EDI and network. Most end user connections will be trade facilitation applications; and a discus- adequately served by dial up connections; sion of factors which could inhibit imple- probably less than 5 percent of connections mentation. will require leased lines. Connections will need to be made fairly quickly and techni- TECHNOLOGY AND SKILLS cal expertise be readily available if the INVENTORY implementation is not to suffer from exter- nally induced delays. At the national level A major trade facilitation EDI project can be the telecommunications authority will need carried out at the strictly technical level by to offer a wide range of international a small team of people; perhaps as few as connections and circuits to all of the com- two or as many as five specialists. They will mercial world's trade hubs. need to be supported by end user staff and Thereafter implementation depends a range of other professionals, but in purely upon external factors: local application technological terms a small team is ad- systems, knowledge of local systems, equate. willing and competent pilot trading part- The team should have skills and experi- ners and an appropriate business and ence in EDI and trade facilitation imple- administrative climate to encourage partici- mentations, knowledge of the theory and pation. practical application of EDI standards, especially UN-EDIFACT trade and trans- KEY TECHNOLOGY AND SUPPORT port messages and of a range of application ELEMENTS software. The team would also need experi- ence in interfacing or integrating EDI with For EDI and trade facilitation to work to the application systems. Professional skills required levels of effectiveness there is a set required are project management, educa- of technological preconditions: tion and teaching experience (at least as practitioner, if not end user), and manage- * an adequate telecommunications net- ment and senior client liaison skills and work; experience. * wide acceptance and use of IT in the In order to do their job properly, mem- public and private sectors; bers of this team would need access to * a pool of IT people with the right skill adequate and appropriate computer pro- sets, trained to appropriate levels; cessing facilities, complete with EDI host * hardware, software and communications software and network connection capabili- vendor infrastructure; ties (see Annex 2 , 3 and 5 of this report). * educators and trainers; The host EDI server may already be * access to practical skills and experience available from a local VAN or through the in business processing reengineering Skills and Techinology Infrastrutcture 5 technology, and EDI; originally designed. The two conditions * willing and able end users in both the are often significantly different. public and private sectors at national, Reviewv knowoledge Of wzihat is possible. This industry and enterprise levels; involves an awareness of, and education * supportive external agencies, such as in, all of the technologies previously EDI associations, article numbering discussed. It also involves knowledge of associations (UCC-EAN), trade facilita- case studies, understanding of trading tion bodies, Chambers of Commerce, partners' business processes, and aware- standards bodies, and industry bodies; ness of what is required for an interna- * supporting international agencies, such tional alignment of systems, both in as EDI associations, UN-EDIFACT, technology and business practice. UNCTAD, International Chambers of Reengineering. Having documented Commerce, World Customs Organiza- existing systems, and evaluated how they tion, World Trade Centers, trade facilita- work, it is now possible to redesign and tion bodies, international aid and reengineer current systems, based on a lending agencies, and major national knowledge of what is possible. and international VANs offering EDI Standard messages. Having reengineered and electronic commerce services; the information flow, it is now necessary to * banks and financial institutions offering examine the newly-defined data to be electronic funds clearance facilities with transferred between computers. This data financial EDI capabilities and corporate then needs to be compared with existing electronic banking services. approved standard messages. Message design. Message design and BEST PRACTICE approval can be a time consuming process, and should be avoided if possible. If new The term "best practice" is subject to messages are deemed necessary and the considerable abuse, but in the context of design process therefore unavoidable, they EDI-based trade facilitation it may be must be based on guidelines discussed in considered to be the implementation of the detail in the EDIFACT message syntax and goals of trade facilitation. Such implemen- design guidelines. tation involves simplifying processes, Pilot operations. An initial EDI group of removing excessive and obsolete controls, trading partners is then set up and ex- shortening and easing lines of communica- tended to a small number of competent tion, and using coding systems and EDI for trading partners. This involves installing rapid, accurate transfer of data between translation software, integrating that computers. This implies alignment with software with existing application soft- trading partners' systems and adoption of ware, connecting to a VAN's EDI service, world standards for best practice. and then exchanging test messages. As the Any plan to implement best practice pilot develops, it is possible for partners to conditions presupposes a knowledge of begin to trade electronically and to gradu- EDI, trade facilitation goals, the appropri- ally remove the paper systems it was ate technological infrastructures, willing designed to supplant. participants, and a nationally agreed Ramp utp. This is the term given to program. Key steps in the implementation extending the new electronic methods to of the process follow. the widest range of participants. The Feasibility st udw. Documentation of techniques used to enlarge the user com- information flows and identification of key munity and to encourage participation players for the early stages of implementa- may vary from mandating compliance at tion. one extreme to a range of financial and Project plan. This includes broad aware- business inducements at the other. Only ness, concept marketing, and an education full participation will yield the desired program. results. Docutmentation of existing systems. Progress reviewu. The management and Documenting the systems as they are the project review of each pilot and major currently being used, not as they were initiative will involve public and private 6 Information Technology and National Trade Facilitation: Guide to Best Practice sector organizations, as well as many of Funding. Clearly the most common the major trading partners. The purpose of reason why EDI is imperfectly imple- reviews, apart from commercial and mented or adopted at all is lack of ad- operational necessity, is to confirm that the equate funding. This manifests itself at the original design parameters are being met, national and the enterprise level alike. At and to improve them where possible. the national level an inadequate telecom- Legislation. To the extent that legislation munications infrastructure, lack of a needs to be changed, attention should be sufficient base of IT equipment, or the paid to the Customs Act, the Evidence Act, absence of a body of skilled and experi- and any other legislation that concerns the enced people, would clearly make it validity of electronic commerce, taxation, difficult to achieve a critical mass of users. and banking regulations. There are some appropriate aids, such When presented in this fashion the task as the no tech-low tech initiatives, but an may seem overwhelming, but a properly effective telecommunications infrastruc- constructed plan will create a staged ture and an EDI VAN are the minimum approach, phased and balanced for local prerequisites for EDI, for which govern- conditions, with as much expert help as ment funding should be available. necessary. The plan should take into At the enterprise level there are a range account non-automated small- and me- of aids and inducements. "EDI In" and dium-sized enterprises through a local "EDI Out" service bureaus, fax input- variation of no tech-low tech EDI initia- output services, voice input-output ser- tives. Enterprises and industries from vices, and inducements from government nations of all sizes have already embarked and industry bodies can help. Loans for on such a plan. The fundamental prerequi- equipment and training to be repaid from site is determination. savings, the rental of hardware and soft- ware by VANS, fixed monthly billing and a BARRIERS TO USE AND range of shared operation options, all work PARTICIPATION under the right circumstances. Finally, banks and financial institutions On one hand, EDI has been seen as a tool may choose not to cooperate in clearing for the larger enterprise, the wealthy house functions for electronic funds industry, or for government departments. transfer, trade payments, and electronic The well-funded, well-resourced, techno- trade documentation. Whether this is the logically literate organizations are always result of cynicism, of perceived technologi- among the pioneers, and tend to dominate cal superiority, or the desire for market the standards-setting process. These are advantage over domestic competition, it the people who can afford the right soft- happens all too frequently, to the detri- ware and the right VAN service. ment of national interests. The banks and On the other hand, the unautomated financial institutions must become part of and hence technologically disenfranchized the best practice movement; they must be small companies fall even further behind persuaded to adopt EDI and financial EDI the wealthy organizations as the adoption from the outset. of technology widens the gap between the Vision and leadership. An EDI initiative is smallest and the larger organizations. rarely successful when driven from the Funding, however, is not the only bottom up. Success requires a strategic barrier to the use of EDI. Even in wealthy plan and a shared vision of the outcome countries there can be equally effective and benefits. Without this form of leader- barriers, such as competing infrastruc- ship from the highest levels or from a tures, lack of leadership, and inappropriate strong, unified commercial interest, the message standards. result is a fragmented effort with conse- This section briefly looks at the most quent wasteful use of scarce resources. common limiting factors, to sound a note This breeds only partial commitment and of caution about the methods that may be gradual disinterest. It may be necessary to adopted and implemented at the national mandate certain national processes in level. order to achieve the necessary critical mass Skills and Technology Infrastnictire 7 vital to the overall success of the initiative. or unfocused initiatives can breed unneces- Knowledge. Until a sufficient number of sary competition among vendors, each people concerned with trade facilitation seeking competitive advantage over the issues know what is possible, it is very other. An absence of leadership can also difficult to make progress. Unless a cam- encourage an environment of noncoopera- paign of awareness and education is under- tion among vendors, nonstandard ap- taken at the right level and for the right proaches and, consequently, higher costs duration, the pioneering implementers and and noncompliant systems. The choice and users will have an uphill task. An aware- adoption of industry, national, and interna- ness and education program is possibly the tional standards, and their application in a most important key to success, and con- uniform fashion, so as to be aligned with versely, the lack of such a program is the overseas trading partners, are particularly most likely to cause failure, delay, or important. An uncoordinated vendor compromises. infrastructure leads to confusion and lack Too much competition. Lack of leadership of cohesion. 8 Information Technology and National Trade Facilitation: Guiide to Best Practice 3 Local Business Considerations Even if all of the technological precondi- into account, therefore, are government and tions for success are present in a business local business practices, language, cultural community, there are always other factors and religious practices, and external influ- which have to be considered in overall ences such as multinationals. project planning. A good telecommunica- tions and computer infrastructure, com- GOVERNMENT AND LOCAL BUSINESS plete with adequate skills and knowledge PRACTICES base cannot, on its own, guarantee success. It needs the willing support and active In any area selected as a potential location cooperation of the public sector, most for a technology-based initiative, the local particularly of major government sponsors government ideally needs clearly articu- in the early stages of the project. It also lated national business objectives, and requires a similar attitude from the local capable and honest public servants to business community and any multination- delegate their implementation to. To be als who may be present. If we add to these carried out successfully, these objectives needs those of adapting the traditional local must be free of political and ideological way of doing business and the practices biases, and be seen to be fair to everyone. that have evolved over the centuries to the Traditional Confucian practices, post newly evolving methods of international colonial nepotism and influence from trade then we can assess the initial chances traditional power sources may not be for success. helpful. Many of the case studies for this As a benchmark, take the case of several project yielded instances of these types of Asian countries who have built on a less environments stifling the necessary spirit of than optimum technology base in order to enterprise for technology-based initiatives. implement a national plan. Their achieve- So the judgment is whether the govern- ments have come through governments ment is actually able to distance local who have been able to marshal support practices and pockets of perceived self- from all sectors of the local business com- interest from a project whose dimensions munities in committing themselves to are defined and measured by technological international best practice for the national competence, and success in the interna- good. This concept of the national good has tional arena. helped them to overcome sectoral opposi- It must be remembered that the project tion to the alignment of local practices with will require a great deal of help from international systems. organizations who have already had long On the other hand, take the example of years of experience with the government several advanced western style economies concerned. The cynicism that this type of who, for all of their investment in technol- relationship often engenders is hard to ogy, have failed to set a national agenda shake off, as some Latin American countries through a national shared vision, have left demonstrate. the leadership to the private sector, and as a It is also possible that, in some coun- consequence have secured unsatisfactory tries, the government may have to be the natioinal returns on investment and effort. conduit for funding, but may not be the This has happened because of the resulting right organization for the management role, fragmented efforts, duplicated resources nor for the leadership tasks so vital to the and redundant competition. success of the project. Major nontechnical factors to be taken Local Business Considerations 9 CULTURE AND RELIGION other work to do, or may not be able to fill in the forms accurately. EDI and simplified These are factors with a diminishing automated trade facilitation can help a impact on trade issues but cannot be great deal, but it still requires genuine ignored with impunity. Business practices knowledge of the appropriate language. are often very closely related to cultural Variations in government style, in local issues. business culture, in religious impacts on Japanese and Korean business practices work practices, religious holidays and the date back hundreds, perhaps thousands of local working week, language and the years. They were designed to protect local availability of romance language speakers, industries and craftsmen, to lock out all have an effect on the successful imple- competition, and monopolize suppliers. In mentation of a major trade facilitation an electronic world, these concepts are initiative based on technology. diametrically opposed to the concept of open standards and cooperation between EXTERNAL INFLUENCES competitors on technological and stan- dards issues for the larger good of the Po-t-colonial governments tend to have global industry. very strong or antithetic relationships with Other cultures tend to emphasize the the governments of ex-colonizers. Such small family unit business to the detriment relationships can sometimes distort objec- of national organizations. There are some tive judgments, quite often on technologi- of these tendencies at work in Hong Kong cal issues. It would be dangerous to and China, for example. Family, clan, tribal assume that a previous colonial adminis- and cultural allegiances often transcend tration would be in a better position than open business relationships in developing others to understand local conditions, and economies, thereby making open business that its solutions to specific problems networks more difficult to establish than would therefore be more appropriate than they need be. solutions from elsewhere. There are some EDI standards and documentation have classic examples of EDI systems being so far been developed in the official UN exported to countries least suited for them languages. In order to participate in the merely because such an assumption was EDIFACT movement, countries either have made in the planning stages. to have a nationwide fluency in a Euro- The influence of multinationals would pean language or they have to convert the normally appear to transcend many of standards and documentation to local these local variations and special circum- languages. In some instances, especially in stances, operating as they are in interna- ideographic languages, they first have to tional conditions. But in practice, the agree to a common language for standard successful multinational has absorbed codes for information interchange (like the many of these local factors, while appear- American Standard Code for Information ing to be impervious to them from an Interchange, or ASCII). Korea, China and outsider's perspective. The experiences of Taiwan have all completed this work. multinationals, and the lessons they have English is not the primary spoken learned are extremely important to this language in most countries, but it is the type of technological initiative. They have primary written language for international had to find their way around most of the trade. This often creates problems. Even problems facing a trade facilitation initia- when an organization has someone with tive and are generally the keenest to see it sufficient fluency in English to fill in succeed. official forms, that person usually has 10 Information Technology and National Trade Facilitation: Guide to Best Practice 4 Investment Costs and Benefits The simplifying and speeding up of trade partners. Efficiency improvements in vessel information flows offer significant national turnaround have attracted new entrepot benefits. At one level they ensure that and distribution business to Singapore. efficient approvals and information flow Advanced electronic commerce and EDI can be processed with a smaller number of facilities enabled Australia to increase their steps, fewer people, and in less time- lead in tourism revenue growth. The ability offering savings to government depart- to electronocally communicate with their ments and commercial users alike. But the northern hemisphere trading partners has downstream results of these efficiencies are resulted in a four week extension of their even more important. supply season each year for a New Zealand For example, the use of accelerated, produce industry. simplified systems and EDI to preclear At the enterprise level, the adoption of imports and exports means that goods can quick response (QR) and just in time (JIT) be loaded and unloaded in the most effi- strategies, particularly those supported by cient manner, problems can be anticipated EDI, are enabling textile and apparel and solved before they become problems, manufacturers all arross Asia and Latin facilities can be properly scheduled and America to dynamically satisfy variable maximum use made of the road, rail, ports customer demand and thereby gain signifi- and harbor infrastructure and installations. cantly larger proportions of their business. To take a simple example: if a ship can Auto manufacturing operations all over the be processed in half a day or less rather world are reporting savings of US$200 per than the day or more it may currently take, assembled vehicle through JIT and EDI then the infrastructure capacity is effec- practices. Major multinational retailers are tively doubled: twice the cargo, twice the obtaining a greater variety of fresh produce number of ships, twice the number of from all corners of the globe while simulta- containers. The result is increased harbor neously achieving dramatic savings duties, increased excise, increased revenue through the use of QR strategies. In some from income tax, and the company profits cases supermarkets have increased profits without increased investment in infra- threefold over the last ten years, while their structure. inventory float has been reduced from three Singapore claims that properly applied to four months of supply to less than one trade facilitation is already saving the week. country in excess of 1 percent of its gross Best practice trade facilitation and EDI domestic product (GDP) each year. Returns based industry initiatives have not only on the investment in the national trade produced economic advantages, they have facilitation initiative, Singapore Network turned into a marketing tool for their Services (SNS), came during year two of advanced users. New business is being operation. Taiwan (China) and Korea have attracted to EDI-compliant enterprises at similar stories to tell. the expense of those which are not. Hence the big picture shows more So the ultimate question might be not efficient trade, higher government revenue "What does EDI do for me," but "What will and the ability to defer government invest- the lack of EDI do to me?" ment in major infrastructure projects by optimizing use of existing installations. COSTS AND BENEFITS The benefits of these efficiencies trans- late to wider attractions for the trading There is no magic formula which can Investment Costs and Benefits 11 guarantee a safe return on investment in cost of educational materials and external EDI and best practice. The most successful advice and assistance. Private industry case histories are from countries which and far-sighted vendors may be willing to were able to conceptualize solutions to contribute funds for this early part of the their fundamental trade processing prob- project and make it possible to initiate an lems and then committed themselves to ambitious program. the approach, with the conviction that It should be noted that to be truly substantial benefits would follow. Much of effective the awareness campaign needs to the investment made for implementing be focused first on national advantage and best practice and EDI is indirect in nature, then on individual key industry benefits, but must nevertheless be taken into ac- finally concentrating on the individual and count: for example, the commitment of the small to medium enterprises. The activities time of key people to the project. They should embrace all government depart- represent real costs, but they may possibly ments, all commercial enterprises and all be absorbed within normal budgets. quasi governmental authorities and Investments also depend upon the organizations. Ultimately the campaign scope and the size of any project. To totally should become institutionalized through reengineer a nation's trade process from a the education sector. base of clerical and bureaucratic systems, The evolution from the launch of the involves commitments of a significantly program to its adoption by the education higher order than an individual enterprise system may take about five years. The adopting best practice in an environment public sector will almost certainly have to where there is a good technology infra- bear the brunt of these establishment costs structure and EDI is a common practice. if the job is to be done properly, especially Two extremes illustrate the differences in the market start-up and consolidation in more detail: the macro view (a national phases. A nascent technology vendor-VAN perspective) and the micro view (an industry would be unable to fund such an enterprise-level perspective). Take the extensive program in advance of revenue example of a nation or territory where although it should be able to make an there is no existing national program and increasing contribution as the market few, if any, EDI users. Assume also that the expands. This phase of the project is vital country is operating the traditional paper for a successful national implementation and lengthy approval customs export- therefore sources of funding must be import system. Further, there is no natural established at the outset. candidate for a national organization The third cost category is the technology charged with providing the technology, provider. It may be necessary, at one ex- commercial leadership and project man- treme, to establish a new organization and agement. There are several categories of to install new equipment and software in cost needed to build the infrastructure and order to provide the necessary technologi- awareness from the ground up, assuming cal facilities and level of service required that there is an adequate basic IT infra- for a national approach. To prepare for this structure (telecommunications, computer possibility, and in order to make realistic usage and skills pool). commercial decisions, this exercise will The first is discovery, which includes involve feasibility studies, cost benefit executive time and travel, and external assessments and business planning activi- advice, such as some external agency ties. Thereafter the organization will involvement in the debate on objectives require investment and support until the and options, potential scale and sources of enterprise breaks even, or achieves a level funding. of business performance at which it may Next is azwareness, or the creation of a attract private sector funding or may even national promotional campaign, education be completely privatized. courses and conferences and the use of the There are two categories of investment, media, spread over a long period. with many options depending on local Direct costs will include the costs of the conditions. The first involves the planning campaign, media costs, conference costs, and feasibility activities. Much of this 12 Information Technology and National Trade Facilitation: Guide to Best Practice work may need to be carried out by technical people, and the technology, are external consulting bodies or experienced provided by the local authorized organiza- international agencies. They need to be tion-the local VAN. VAN revenue comes supported by local executives and govern- from software sales, education and train- ment officers, for credibility, for technol- ing, consultancy, and network traffic, ogy transfer and for continuation of perhaps from supporting electronic com- commitment. merce services as well as EDI. Plans need to take into account all Network traffic increases with volumes direct costs of technology, staff and other of transactions and the variety of applica- resources. Service pricing can be a conten- tions. But since the tariff for these services tious issue. It may be tactically necessary must be both attractive and competitive, to offer inducements and attractive pricing and since it is based on the most efficient plans for early users; but once the service contemporary computing and telecommu- is established it is important to levy fair nication technologies it requires a sizable and reasonable pricing tariffs. In any case, number of users and level of activity to the attention of competing vendors and generate a break even income. Virtually overseas trading partners will ensure that every case study illustrates a cash flow hidden subsidies cannot be provided for break even of between 48 and 72 months long. (four to six years) on this type of opera- The second cost category-cost of the tion. So the challenge is to bring forward technology service, or the local VAN, if it that break even point or to support activi- is to be provided locally-may be defrayed ties until returns can be made. in a number of ways. It may be possible to This final point is crucial, and explains subcontract the entire task to a third party why commercial vendors are not breaking and avoid direct investment in technology down doors to fund the start-up opera- in exchange for contractual exclusivity for tions of electronic commerce initiatives in a number of years. It may also be possible developing countries. The funding of the to minimize investment by entering into a infrastructure and market development joint venture with a new or existing costs are outside the normal span of venture for the right contractual arrange- commercial viability for existing technol- ments. Or it may be tactically necessary to ogy suppliers. Their business is to provide invest in a brand new organization and access to the specific technologies neces- technology. sary for electronic commerce but as the Tempting though it may be to debate case studies illustrate, technology alone is this issue at length, the technology pro- a relatively small cost component when vider is relatively insignificant in the compared to overall costs. overall financial picture. Case studies have The range of case studies also illustrates shown that the direct costs of technology that there are no simple rules to determine are typically considerably less than 10 costs, benefits and break-even points. But percent of the total project costs, in some there is an enormous amount of evidence cases as little as 3 percent. The major cost concerning the number, sequence and scale elements are the costs of building aware- of activities. Local business practice, ness, of working with potential users to policies and business accounting methods prepare them for electronic commerce, of need to be applied to individual cases. developing and designing messages and What follows is a guide, a set of tools for guidelines and of reengineering systems. decision making, for measuring progress, The technology vendor is often external to and to help set financial criteria for judg- many of these activities. ing success. The major costs are people costs, much of them invested by end users and govern- COST AND REVENUE CATEGORIES ment departments off-budget. But they are real costs nevertheless. There are four main cost categories: Finally, there are the costs of iniplemen- tation. Increasingly, as the project matures * Research and business planning. These and the local VAN grows in experience, the activities may be expensed or budgeted. Investment Costs and Benefits 13 * Investment in IT equipment, software, EDI software packages (US$500 to US$3,000 personnel and telecommunications per copy); assumes consultancy and imple- services necessary for a national EDI mentation charges of up to US$2,500 for a service. There is a fixed minimum entry small user; and network, communications level price plus a variable cost, depen- and service costs in the range of US$50 to dent upon activity and usage. US$250 per month. The variables are * Implementation activities, composed of implementation and integration complexity, the minimum activity necessary for application types, types and numbers of establishing EDI technology, messages messages and transaction volumes. These and reengineering infrastructure, and a figures do not separately identify the more variable component set by activity and expensive IT implementations for a major take-up volumes. reengineered process, nor do they identify * A variety of indirect and associated any no tech-low tech EDI charges for activities such as management, working nonautomated users. For the sake of sim- party and committee work, legal, audit plicity, these have been bundled in with and security tasks and direction on overall user's costs and revenue figures. ownership and funding activities associ- Models B and C vary only in the size of ated with the national initiative. the economic communities that they serve, that is, their potential user base. To some The revenue may come from two extent, the size of the economy influences sources: the speed and rate of take-up, if only because of the scale of the end user's own i end user payments for EDI products and resources. services; Model B assumes 100,000 enterprises, * privatization, and equity participation in Model C 250,000 enterprises. The three the national technology initiative, or models encompass population of up to 25 from charges for contracted access to million people. government information. It must be remembered that the costs quoted are those directly attributable to a The scale is dependent upon levels of modest yet highly focused reengineering activity and the overall potential of the effort of EDI-based trade facilitation. Extra initiative. Three different models are given product development, extra services, a below for general guidance. more ambitious roll out program and failure to meet what are proven to be THREE TYPICAL MODELS achievable user number targets, can easily result in multiples of the costs illustrated. The three different take-up models pro- The models assume 10 areas of business posed in this section illustrate variations in costs covering the first five years of a scale, activity, and cash flows. The first, national EDI initiative: discovery, aware- Model A, is based on a relatively small ness, feasibility, strategic business plan- scale initiative in an Indian Ocean, Carib- ning, technology acquisition and imple- bean or Pacific island community. It as- mentation, project planning, implementa- sumes about 20,000 enterprises in total, of tion planning, technical implementation, which 5 to 10 percent are involved in the operations, review. Thereafter the business transport and distribution aspects of the should be concentrating on consolidation import-export trade. The remaining enter- and the application of market-driven prises are concerned with the normal pricing to recover initial investments, if activities of primary industries, retail and they have not already been recovered by wholesale, transport and distribution, this time. The list does not include end user service, and government sectors. The first technology, which is taken to be outside the five to seven years of the business plan national initiative business planning. A would be aimed at capturing all partici- contingency plan can assume that one user pants in international trade and the most in three will buy new equipment, at an important domestic enterprises. estimated 1995 price of US$3,000 for hard- All models use global average prices for ware. 14 Information Technology and National Trade Facilitation: Guide to Best Practice Model A Costs Type Costs (US$000 per year) Total Years 1 2 3 4 5 Discovery 100 100 Awareness 150 100 50 50 350 Feasibility 100 50 150 Strategic business planning 100 100 Technology acquisition and implementation 400 250 250 300 300 1500 Project planning 50 50 100 Implementation planning 50 50 Technical implementation 100 100 100 100 100 500 Operations 50 150 150 150 150 650 Review 50 50 50 50 200 TOTALS 900 850 650 650 650 3700 Cumulative 900 1750 2400 3050 3700 Model A End User Revenues Number of Users 5 50 250 500 1000 Revenue (US$ 000) 50 250 800 1500 3000 Cumulative 50 300 1100 2600 5600 Model B Costs Type Costs (US$000 per year) Total Years 1 2 3 4 5 Discovery 200 50 250 Awareness 50 250 250 200 100 850 Feasibility 300 200 50 50 50 650 Strategic business planning 200 50 250 Technology acquisition and implementation 750 500 500 600 600 2950 Project planning 100 100 50 50 50 350 Implementation planning 100 100 50 50 300 Technical implementation 200 300 300 300 300 1400 Operations 100 300 400 400 450 1650 Review 50 75 75 100 300 TOTALS 1900 1900 1725 1725 1700 8950 Cumulative 1900 3800 5525 7250 8950 Investment Costs and Benefits 15 Model B End User Revenues Number of Users 25 200 500 1000 2000 Revenue (US$ 000) 250 1000 2000 3500 7000 Cumulative 250 1250 3250 6750 13750 Model C Costs Type Costs (US$000 per year) Total Years 1 2 3 4 5 Discovery 500 250 750 Awareness 250 1000 1000 500 250 3000 Feasibility 500 500 200 100 100 1400 Strategic business planning 100 250 50 400 Technology acquisition and implementation 2500 1000 1000 1250 1250 7000 Project planning 100 250 100 100 100 650 Implementation planning 250 250 300 300 300 1400 Technical implementation 500 750 750 1000 1000 4000 Operations 250 750 1000 1000 1250 4250 Review 100 250 100 100 500 1050 TOTALS 5050 5250 4500 4350 4750 23900 Cumulative 5050 10300 14800 19150 23900 Model C End User Revenues Number of Users 50 350 1000 2000 5000 Revenue (US$ 000) 500 2000 4000 8000 20000 Cumulative 500 2500 6500 14500 34500 All models illustrate a break-even point FROM DIFFERENT PERSPECTIVES after a period of 48 to 54 months of opera- tions, which is consistent with virtually From a wider perspective, electronic every nonsubsidized initiative. The critical commerce is directly analogous to the dependencies are obviously take-up rates telecommunications and broadcasting and end user revenues. Both are dependent industries: the payback may be longer than upon service, hence on initial investment. for many other commercial enterprises but All are dependent upon the awareness the revenue stream is also correspondingly campaign working. longer, and ultimately more profitable. The ratio of technology costs to total Specific costs are a function of scale. costs is around 15 to 20 percent. The pro- Direct costs are a fairly small proportion of portion of costs attributable to end user and the total. It is unlikely that all technology private sector efforts, as opposed to direct and external advice costs exceed 10 percent investment by the public sector, are around of the overall total of a national trade 30 percent of the total. facilitation EDI initiative. The balance of costs is concerned with people, from the technology provider and end user organiza- tions, in both public and private sectors. 16 Information Technology and National Trade Facilitation: Gutide to Best Practice The national benefits need to be assessed inevitably time consuming. Figure 4.1 in the same way as costs. They will involve demonstrates how goods are delivered direct benefits of efficiencies, of cost reduc- within a couple of days, while the complete tions, in better use of resources and in information processing task and payment deferral of capital expenditure. Growth in takes several weeks. One major supermar- trade needs to be considered, as does the ket admitted that, prior to EDI, its seven- value of the new skills and industries day accounts were taking 27 days to pro- fostered by the new technologies and new cess, with each supplier invoice costing techniques introduced to support the trade them an average of US$30 to process. facilitation initiative. One percent of GDP, In information systems time causes a or even a fraction of that may be incentive phenomenon called "float." It is an inbuilt enough to justify the investment. allowance by the system for investment in At the micro level of the individual time, resources and inventory necessary for enterprise, the costs and potential benefits the system to replenish stock. Float is often are much more tangible, and more immedi- measured in "days of stock." A key objec- ate. Figure 1 represents the normal situa- tive in any business system which has to tion, in which companies use computers to control stock is to reduce float. At one time create paper forms, then place them in float could be measured in weeks or envelopes and post them to their suppliers months. Now, when an EDI-facilitated or customers. It provides the end-to-end business practice has been properly imple- example of buying and selling, or the mented, float can be measured in days, and purchase order to receipt and payment in the future perhaps in hours. process, now often referred to as "the Of course, EDI is not the only reason: supply chain," especially when it includes bar coding systems, electronics funds all of a company's suppliers. transfer at point of sale (EFTPOS), and Even in this simplified presentation, modern computer replenishment systems, there are 10 steps in the complete end-to- all play their part. But EDI is the key end process, each one open to errors and facilitating technology; it is the reason why duplication. Data entry into computers for accurate information can be rapidly trans- internal systems is done on several differ- ferred between computer systems, which in ent occasions (It is a well recorded claim turn provides precise information on float, that 70 percent of computer output becomes thus making QR and JIT systems practical. someone else's computer input). All this is Figure 4.2 illustrates the impact of EDI Time: Days or Weeks? > Order placed Invoice received Check sent EFT initiated BUYING FIRM PAYMENT POLICY CREDIT POLICY SELLING FIRM Order Goods Invoice Check Check Funds received shipped sent received deposited available Figure 4.1: Order to Receipt Cycle (before EDI) Investment Costs and Benefits 1 7 Time Line: Hours or Days > Order placed Invoice received EFT initiated BUYING FIRM SELLING FIRM Order Goods Invoice sent Remittance Funds received shipped advice available received Figure 4.2: Order to Payment Cycle (with EDI and FEDI) and financial EDI on the "order to receipt mainframe computer could cost in the and payment cycle" described earlier in region of US$25,000. They would also have Figure 1. It shows that the computer- to connect to a VAN, rent an electronic generated order goes straight into the mailbox, and initiate a program for educa- suppliers' computer in a matter of minutes tion and training. or hours. That information is processed by Staff time and expense to interface the their order entry system and goods sup- translation software package, and then to plied thereafter. reengineer systems would, of course, be The same is true of payment. No paper internal to the individual company. Clearly is used by the EDI facilitated system and the costs would be significant, but compat- therefore no data entry, no mistakes and ible with a normal mainframe project. reworking, no paper storage and retrieval Cases of this size and complexity, although and no picking paper up and putting paper representing a high proportion of transac- down, that is, processing, need take place. tions exchanged within a given community, The time taken to process paper in the are nevertheless the exception rather than system is often called "the information the rule. Well over 90 percent of all EDI float." By reducing the information float it users around the world use a personal is possible to reduce inventory float and computer for the purpose. thereby make the whole process faster, The annual repetitive costs of using the simpler and cheaper. network for EDI are directly proportional to volume in the vast majority of cases. But SUMMARY this is quite inexpensive when compared to any other alternative. At a typical tariff of The costs of installing EDI by individual US$0.30 per 1000 characters sent and enterprises obviously vary with company received, this represents a fraction of size and project complexity. For example, today's postage rates. the organization might have a mainframe At the level of the smaller enterprise, computer handling high volumes of com- staff involvement may be measured in plex transactions. It might be necessary to hours, and one-off costs from a few hun- totally reengineer a function and to dedi- dred dollars to US$5,000. Repetitive costs cate a team to the task. In addition to are typically less than US$100 per month staffing the project team they would need a for an average small user. translation software package which, for a The benefits may take some time to 18 Information Technology and National Trade Facilitation: Guiide to Best Practice accrue, in line with the number of trading for trade clearances and trade facilitation partners who have adopted EDI practices. purposes. In addition there are many more But in some cases, for example, as in the times the number of users using EDI for case of a customs broker making export industry and efficiency purposes. declarations, the benefits begin to flow The cost-benefit case depends largely from the first day. upon local conditions and the local starting Generic benefits include direct cost point. But the more advanced trading savings, increased productivity, improved partners, at national and enterprise level, trading partner relationships, greater are beginning to demand EDI compliance marketing opportunities and reduced as a condition of doing business or con- inventory levels. Faster response times ducting trade in the future. Already some often lead to increased sales volume but in organizations will only accept new suppli- a greater number of smaller batches. EDI is ers if they can demonstrate an EDI capabil- the only reliable way to cope with this ity. There are cases of companies, particu- trend. New business opportunities, par- larly traditional, small, older firms, who ticularly from overseas trading partners, have gone out of business because of can develop simply because of EDI compli- inability, or unwillingness to comply or ance. disbelief in the need to comply. This has been particularly true of some middlemen CONCLUSION occupations. Ultimately there is an even harder fact to There are around 100,000 users of EDI consider. There is no longer any choice operating to national and international about compliance; the market has made the standards in 1995. The number of users decision for everyone. The remaining increases at a rate of around 25 percent choices involve timing, to a diminishing compound each year; and the volume of extent, and the level of participation. It may transactions and new applications at be possible to adopt a cosmetic approach, significantly higher rates. By no means all or minimum level compliance. But that of these users have experienced the sug- represents considerable pain for a limited, gested benefits, but many have and more and transient, gain. Market conditions will, expect to do so. in time, demand maximum participation The same is true for national initiatives. and the adoption of best practice for sur- In one form or another, over 50 countries vival. At the moment there are still oppor- are now actively using EDI. Traders in tunities for competitive advantage. virtually all these countries are using EDI Investment Costs and Benefits 19 5 Technology and Cost Options EDI is often seen solely as a tool for large slow when compared to many early firms and government. They improve their predictions. The reasons for this are rarely efficiency while their smaller trading those we hear at seminars, such as legal, partners are forced to absorb the costs of audit, security and network interconnec- installing EDI. Of course the issue is much tion issues. These may be reasons to defer more complex than that, but the fact is that serious consideration of EDI in the first EDI can be costly for small enterprises. place, but they are not reasons to stall This section looks at the real costs growth of existing users. involved in installing EDI and at how The real reason is the effort involved in these costs may be reduced so that even installing EDI and integrating EDI into the smallest of trading partners can justify business systems. This is the brick wall EDI. To the technical purist, the techniques facing all EDI implementers. involved in this low-cost EDI approach To take a practical example: may not fit the definition of electronic data Woolworths Supermarkets in Australia has interchange. But they can meet the same over 10,000 trading partners, the majority objectives, and at less cost. within Australia. About 80 percent of those trading partners supply goods which are EDI'S BRICK WALL eventually soid within the supermarkets, the remainder being goods and services for Of the estimated 100,000 EDI users in the internal consumption (among them build- world by end 1995, about 50 percent will ing maintenance, electricity, cleaning). be in North America, and the majority of It will take Woolworths three to five the remainder in northern Europe, with years to achieve full EDI capability. The sizable minorities in Japan, Singapore, company has to change internal disciplines Australia, and New Zealand. Also, t' re and processes. For example, it will no are indications that within three years the longer be dealing with vendors' invoices most rapid growth will be in the Asia- but rather with a new message, the SNM Pacific region. or Ship Note Manifest. It has to redesign EDI users go through a number of information flows, rebalance staff levels phases, but none of those phases have so against redesigned work practices, and far included exponential growth in num- redesign computer systems and databases bers of connections to trading partners. to handle EDI input and output. Even today the average EDI user is part of Woolworths' major trading partners, a community of less than 10 users. After all relatively few in number, are often multi- these years of experience, why is it so? nationals with large MIS departments. What are the real inhibitors and barriers to They will go through the same processes the rapid growth and success of EDI? as Woolworths, but to a different time scale Obvious inhibitors include the lack of and often for different motives. Hence adequate infrastructure, unsuitable soft- their priorities are often out of synch with ware or standards, cultural and language Woolworths'. impediments, monopolized telecommuni- A larger number of Woolworths' cations regimes, lack of skilled personnel, trading partners are mid-sized companies, and so on. But all these are rapidly being which use much less sophisticated forms overcome. Even in the advanced western of automation, from minicomputers and countries where these inhibitors no longer PCs to service bureaus. Once again they exist, the growth of EDI is still relatively have their own priorities, which do not 20 Informiation Teclhnology and Natioinal Trade Facilitationz: Guiide to Best Practice always match Woolworths'. Because they scenario by a variety of techniques, tech- are not Woolworths' most important niques that can reduce costs for all parties partners, Woolworths is not yet placing until such time as EDI is fully implemented pressure on them to implement EDI, so this across the whole community. category of trading partner has a little breathing space. NUMBERS OF EDI USERS AND EDI By far the largest category of MESSAGE VOLUMES IN AUSTRALIA Woolworths' trading partners are small to very small firms, many of them one-or two- The following Australian figures may be person businesses, often without as much useful as a model for what happens else- as a PC or any other form of automation where. except for a phone and a fax machine. In 1992 Australia had about 3,500 users Woolworths is placing no pressure on these of EDI, only 20 percent of whom were trading partners yet, but every trading actively using EDI as a business tool for partner knows that ultimately it must do general business benefits. The remainder EDI with Woolworths if it wishes to protect were using EDI because their major trading its business with the supermarket chain. partners demanded it (the auto industry, Table 5.1: Estimnated Business Message Volumes (1992) Countries Letters/Head Population Total Letters Business Mail in millions in billions in millions Australia 211.70 17.00 3.60 720.00 U.S.A. 715.20 250.00 179.00 35,800.00 U.K. 260.40 58.00 15.10 3,020.00 Singapore 119.60 3.00 0.36 72.00 Hong Kong 95.80 6.00 0.51 102.00 Of course, this is not just true of customs, government, taxation department, Woolworths; it is the same for all major and so on). These users were exchanging companies or hubs in EDI jargon. Australia around 3 million EDI messages a year in has around 500 hubs; their trading partners 1992. (and their partners) total about 800,000 to In contrast, the Australian Post Office 1,000,000. carried over 600 million business letters Many of these EDI hubs now realize (equivalent to EDI messages) each year, their predicament. They chose EDI for the many of them containing more than one familiar range of benefits, not the least of message (see Table 5.1). In addition, certain which is cost reduction. Yet most of them industries (for example, retail industries) are incurring not lower but higher costs use the telephone as the main ordering and through EDI because they are now running call-off medium. Fax is a popular medium hybrid systems: paper for the majority of for formal business messages, and telex, trading partners and EDI for a small but telegram, and electronic mail are also used. growing number of EDI partners. From these figures we can estimate that Clearly every hub would like to flick a there is a grand total of one billion business magic switch and turn all trading partners messages exchanged in Australia each year, over to [DI overnight. But to convert them all of which, potentially, could be converted all could take them well into the 21st to EDI messages. Considering EDI gener- century, maybe 30 years or so. ally involves two actions for each message: Experienced EDI implementers now a send-to mailbox and a receive-from realize there is no short cut to full EDI; it mailbox, the total potential for EDI mes- must be done thoroughly and patiently, and sages in 1992 is to the order of two billion. it will take some time. However, it should However, after six years of experience, be possible to overcome the hybrid system EDI has captured only 0.35 percent of Technology and Cost Options 21 potential Australian users and 0.15 percent of potential message traffic (see Figure 5.1). Actual Actual There are two other factors to bear in Messages - Users mind. First, as we use EDI to remove - 0.15% - 0.35% people from the administration of trading processes we will develop more and more \. specialized EDI messages to replace infor- Potential 99.85% Potential 99.65% mal telephone messages. Second, postal volume alone (that is, business activity) is growing at 3 percent to 5 percent per year worldwide. These two factors could within Figure 5.1: Message Volume and EDI 10 years result in doubling the volumes Potential, Australia 1992 quoted earlier. translation software, mapping and COSTS OF INSTALLING EDI testing. * Applications: as necessary, amending There are two distinct phases to acquiring applications to produce, say, a flat file EDI knowledge and experience: the pilot output. phase and the rollout or ramp up phase. * VAN costs: registration, monthly mini- The pilot phase involves the education and mums, volume costs, and special ser- training needed to set up a generally one- vices. on-one trading partner relationship. The * Software costs: translation package and effort for the pilot phase is not routine, maintenance. because it only happens once for each EDI user. The costs are distributed over the These one-time costs, if totally attributed following areas: to the pilot, fall between US$6,000 and US$9,000 per user. Mid-range and main- * Awareness: reading, researching, semi- frame costs can go as high as US$100,000 nars, visits. with averages in the US$25,000-35,000 * Education: management, project manage- range. It must be emphasized, however, ment, technical. that these are one-time costs, and for entry * Hardware: at entry level, PC and mo- into EDI for the first user. dem. The ramp up or rollout phase involves . Systems consultancy: installing the rolling out EDI to a wider community of Marketing / Awareness Advocacy / Selling cycle _ _ _ _ Implementation Systems development First stage /Pilot operation Maintenance / Administration Figure 5.2: Ramp Up Phase 22 Information Technology and National Trade Facilitation: Guide to Best Practice potential users. What follows is a model for development of relevant handout material. EDI advocacy and implementation that will It is reasonable to assume that this phase help to explain this phase of involvement. would require a total of 38 working (people) days and additional miscellaneous THE ADVOCACY AND expenses of about US$3,000 to cover statio- IMPLEMENTATION MODEL nery, audio-visual production, hotels and travel. This model, based on an actual case study, Advocacy, thie sellinig cyjcle. Once prospec- is designed for the EDI manager at a hub tive partners have attended a seminar and that has completed the pilot phase and is read the handouts, they are already on their now ready to add new users to its EDI way to discovering EDI. If they are suffi- community. It is a 20-partner ramp-up ciently interested, they will want to talk to effort, but makes no reference to who the EDI advocate at the seminar or soon actually carries out the work. Instead, the after. This is the first occasion when pro- emphasis is on the scale of the effort. spective electronic trading partners will The ramp up phase can be divided into meet face to face in the context of an EDI six stages (see Figure 5.2): relationship. The questions will be along the lines of "What do I do next?" * Marketing and awareness The post-seminar discussion will allow * Advocacy, the selling cycle the initiating agency to ascertain levels of * Implementation interest and collect data to help determine • System development what priorities (in terms of effort and * First stage, pilot operation for new users timing) should be allocated to each trading * Trading partner maintenance and admin- partner, and whether a trading partner is istration desirable as an EDI partner. The next step is a more formal data Marketing and awvareness-the discovery gathering process, which can be accelerated phase. This stage involves bringing EDI and by sending out a survey. Bearing in mind its benefits to the attention of selected the level of detail needed to progress at this trading partners, including some "reserve" stage (time, travel, and expense permit- or fall-back partners. A rule of thumb says ting), it is usually better to gather data that one out of two trading partners se- during more than one face-to face meeting. lected actually conforms to the program. This also assists the informal education Hence, for a planned community of 20 it is process for the prospective EDI partner. necessary to initially involve up to 50 A typical survey would include organi- potential partners. zation details, contacts (position, contact Recruitment methods will involve phone, fax, and so on), data processing personal contact, mailings, seminars, and so systems (hardware, operating systems, on. To keep costs to a minimum, it is communication devices), EDI capability, desirable to avoid individual face-to-face translation package or network used, meetings until this stage of the campaign document types, EDI standards, their levels has had a discernible effect, such as the and message sets, sample forms, volumes, conclusion of an introductory seminar. traffic analysis, and information flow The mailing effort should take 14 work- diagrams. At this stage it is also helpful to ing days (three targeted people or ad- have some demonstrations and quotations dresses per potential partner-say, 75 from one or more VANs. people), typically involving about a week's All this can take eight meetings, or four work to establish names, titles, addresses, days per trading partner for one person, fax and phone numbers, then set up the and travel and other expenses. For 20 mailing list, and actually complete the trading partners, the total effort would be mailing. around 80 working days, with miscella- Two people should work for 10 days to neous expenses of US$5,000. prepare for two seminars, with two addi- Implementation. At this stage the process tional days spent on the rehearsal and becomes a little more predictable. It in- delivery of each seminer. This includes the volves people with specific technical skills, Teclnlology and Cost Options 23 such as business analysts and program- System development. Effort at this stage mers. Assuming, for the sake of simplicity, varies with the trading partner. If, for that the trading partner already has appro- example, a flat file has to be mapped priate hardware and has opted for a front- between an application and the EDI transla- end PC approach, the options are a stand- tion process, that would take a few days of alone PC, a front-end PC sending and systems development time. Let's assume it receiving flat files to and from another would be a self-funding operation and the computer (or another program on the PC), work would be specific to an individual or a mainframe or mid-range computer. The trading partneris needs. It will still be implementation steps include: necessary to allow about three days per partner. System development for 20 part- * software product training in a classroom ners at three days each adds up to 60 days environment; for one person (funded), for an estimated * software installation and testing; cost of US$3,000 per installation. * document and standards mapping; Pilot operations. In this period the * network-mailbox testing; trading partner becomes self-reliant and * application training in a normal trading sufficiently competent to add new docu- environment; ments and install new versions of software * pilot commencement; without any external help. Since trading * trading partner or network or vendor partners will be joining the network at certification. roughly two- to three-week intervals, a consistent telephone support service needs Typically this would take a day in a to be available. Assuming each pilot calls classroom, with up to eight other trainees, the service once a week and takes one hour plus up to two days for a support techni- for the call and problem resolution, the cian on customer premises. For 20 trading support effort would require for an average partners, assuming two trainees per part- number of 10 partners, 50 weeks times one ner, this would mean six courses. Although hour per partner, and a total of 70 days for these activities would most likely be one support person. organized and run by VANs, the EDI Trading partner maintenance and adminis- advocate would have to spend some time at tration. Other tasks are involved here in each course. addition to technical support, advocacy and With total classroom training of eight education: for example, establishing a user days (this step also requires two days of group, communications, a newsletter, implementation effort per trading partner), perhaps a message development group; total implementation time would be 40 conversion to new document types; and days. introductions between trading partners. Table 5.2: Case Study, a 20 Partner Group Activity Days of effort Associated expenses($) Advocate Technical/ Support 1 Marketing awareness/ Discovery 38 - 3,000 2 Advocacy/ Selling cycle 80 - 5,000 3 Implementation 8 40 - 4 Systems development* - 60 5 Pilot operation 70 - 6 Maintenance/ Administration - 20 2,000 TOTAL 126 190 10,000 * A self-funding exercise 24 Information Technology and National Trade Facilitation: Guide to Best Practice Even for a 20-partner trading group, this can take four weeks for one Implementation Systems person in a year, plus printing, mail- 16% development ing, travel, and accommodation 19% expenses. Total time, therefore, would be 20 days for one person, with total Iii Pi expenses coming to US$2,000 for Advocacy / operation miscellaneous expenses. 25% -. 22% Table 5.2 illustrates the six stages of ' implementation for a 20-partner unit Marketing / Maintenance Awareness Administration when undertaken independent of 12% 6% vendors' efforts, while the proportions of effort involved in advocacy and imple- Figure 5.3: Proportions of Effort Required for mentation are represented in Figure 5.3. EDI Advocacy and Implementation Assuming a fully burdened professional person (that is, overhead plus salary, expenses, and so on) for both advocacy and COST SUMMARY FOR A technical support costs US$100,000 per year 20-PARTNER GROUPING (200 days per year), the people costs for a 20-partner effort can be estimated for 316 Anyone who is already in an EDI commu- days as US$158,000, plus expenses of nity, and expects to recruit more electronic US$10,000, that is, a total of US$168,000. trading partners, needs to recognize the This calculation ignores the resources and true costs of recruitment. Similarly, anyone costs for customer-specific work, such as intending to join the second stage of an EDI systems development. It may be reasonable community needs to know these costs exist, to assume a full cost recovery or revenue- in addition to the more widely known costs neutral approach for systems development. of the technology. Table 5.3, which summa- Accordingly, the people costs associated rizes this section, does not include hard- with developing the relationships with ware, software, or network-VAN costs. Nor trading partners to the point where they does it include the internal costs for an can actually use an EDI system can reason- installing organization, such as staff time ably be estimated at between US$6,000 and and expenses. US$9,000 per trading partner, or an average of US$8,400. These costs are in addition to ADVOCACY AND IMPLEMENTATION: hardware, software, network, and vendor THE LAST WORD training costs. Vendor costs, not considered in this section, may be categorized as the Someone has to foot the bill for these costs. cost of technology. The only costs described In the future, it will not be one of the EDI here are those of developing EDI trading vendors, but rather a different type of partner relationships. industry or EDI-specific cooperative-an Table 5.3: Cost Summaryfor a 20-Partner Grouping Labor Expense Total Average (days) (US$) (US$) (partner US$) Discovery 38 3,000 22,000 1,100 Advocacy 80 5,000 45,000 2,250 Implementation 48 - 24,000 1,200 Systems Development 60 - 30,000 3,000 Pilot Operations 70 - 35,000 1,750 Maintenance 20 2,000 12,000 600 Total 316 10,000 168,000 9,9000 Technology and Cost Options 25 essential move if communities are to grow. A PARTNER'S INTERNAL EDI COSTS Meanwhile, it is evident from the figures above that two people dedicated full-time The costs of rolling out a large community to the project can cope with a 20-partner are not just borne by the group or vendor implementation within a year. Certain who has undertaken the advocacy and activities, such as seminars, will need more implementation task. For every person people, such as those with experience from involved from the external advocacy and the first phase of the founding EDI partner implementation group, there could well be group. In practice, one person can deal with an equal number involved internally. only five or six attendees at any seminar; These internal people will come from the hence a seminar with 50 people attending various EDI-affected departments (purchas- would need an extra five or six volunteers, ing, accounting, and so on), and may well which adds to its costs. include an organization's complete EDI Similarly, two people can handle 20 committee. In addition to these staff and partners if the work comes in a steady flow. their associated costs, whether regarded as But the work never does come in a steady sunk costs or not, there are technology- flow. Holidays, sickness, training, and peak related costs, such as hardware, software, loads, all have to be accommodated, as and network costs. does a succession plan. Therefore, it may A recent survey of EDI implementation take up to three people, virtually full-time, in the Australian auto industry produced to service this effort. This would raise some surprising results. After a five-year actual costs to the range of US$12,000 to implementation, electronic messages now US$14,000 per new trading partner. represent 92 percent of the total value of The costs identified here are real costs purchases by the industry. The average cost which up until recently have been partly of implementing EDI was US$12,000 per subsidized by or paid for entirely by installation (range US$1,100-125,000); this vendors. Increasingly, however, the end includes hardware, software, integration, user will have to meet these costs, or they staff costs, and expense. must be absorbed by a major hub. Annual operational costs, including EDI Two further points need to be empha- service provider costs, network costs, and sized here. First, the costs described are associated staff costs average US$4,500 per concentrated on the costs of marketing to annum (range US$225-22,500). Although and implementing with individual trading these are Australian costs, and much of the partners. But the reality is that to sell and costs in the early days could have been implement EDI you often need to talk to a avoided if it were not for the pioneering trading partner's EDI committee-a group nature of this particular EDI community, of people. Each trading partner is likely to they illustrate a typical EDI community's send several people to meetings, training internal costs. session and the like. This adds to the costs. Second, although all the steps described THE DILEMMA for the large-scale ramp up model are indispensable, they can be streamlined to For a typical medium-sized EDI community some extent. Some of the information that (or a ramp-up increment of a larger EDI must be imparted to trading partners can community) the approximate costs, taking be delivered at seminars, so that multiple the large-to-medium in the ranges, are people hear the message at once. Further, shown in Table 5.4. each of the first 20 or 30 trading partners These are high figures for small- to mid- could be given responsibility for advocat- sized businesses, high enough to be barriers ing and implementing EDI with 5 to 10 new to entry for those businesses. Similarly partners every year. Over a period of three VANs do not have the resources, or the years this could increase the size of the EDI will, to continue subsidising the advocacy community to 1,000 participants, keeping and implementation tasks. At this rate the down the cost to the hub. necessary critical mass of users may never be reached. As it is, in many cases, EDI has added to business costs. 26 Information Technology and National Trade Facilitation: Guide to Best Practice Table 5.4: Internal and External Costs for technology to be usable by existing staff at EDI Ramp Up minimum effort. VANs want to increase data traffic Cost type One Time Per Annum without incurring substantial extra support (US$) (US$) costs. The local business community (specifi- External 5,200 - cally in the Asia Pacific region) would like to ensure that EDI and its alternatives Internal 9,000 3,375 embrace local business practices, culture and languages. It would like to avoid any TOTAL 14,200 3,375 forced adoption of new practices. The general business community, on the other hand, would want to achieve mass It is good to remember at this point that installation of electronic communications, there are other methods to reach the same using the existing infrastructure of technol- goals as EDI. These methods involve ogy and services. conventional technology (like fax), existing With these various objectives as a processes, and the existing business infra- starting point, it is possible to explore how structure. They can be cheap, easy to the existing infrastructure of technology install, and capable of being integrated into and services might be used to achieve the a full EDI scheme, as time, resources, and objectives of EDI today. cost permit. So far it has been shown that there are INTERMEDIARIES substantial external and internal costs associated with advocating and implement- The existing EDI infrastructure consists of ing EDI. As VANs and vendors will pay less mainframe, mid-range and personal com- and less of these costs in the future, it is puters, VANs and network services, trans- necessary to find innovative ways for lation software vendors and the various meeting or reducing these costs. education, training and consultancy organi- zations. This infrastructure is currently ALTERNATIVES TO EDI used by no more than 5 percent (and probably a lot less) of potential users. Given the expense of implementing tradi- For alternatives to EDI, we must look tional EDI today, users have ample incen- elsewhere. The goal is to find any existing tive to seek alternatives. These alternatives procedure or technology that will accom- must fulfill a variety of objectives, depend- plish the objectives of EDI, but with less ing on the perspective of the user. cost than the existing EDI infrastructure. The hub or large EDI user wishes to The types of business service providers that avoid having to support both electronic and even the smallest traders are accustomed to paper output and input. In other words, it dealing with on a regular basis include the wants (for appropriate applications) to treat postal service and couriers; banks, accoun- all output as EDI output and to receive all tants and attorneys; courts and service input, whatever its sources, as EDI input. bureaus; the local telephone company and The medium or small user who already other public utilities such as electricity, gas has some EDI-computer capability wishes and water; government departments; to have a number of different means of customers and suppliers; and so on. receiving and sending data, so as to satisfy Some of these service providers could each of its different trading partners. This perform an intermediary EDI service. They user wants to progressively install EDI could serve as walk-in service bureaus and while reducing costs. collection or distribution points for hard The least sophisticated user wants to use copy input and output, or even be one of existing installed technology to access EDI- the resources for "low tech-no tech" EDI. capable trading partners, without the expense and effort needed to implement a full EDI system. The same user wants the Technology and Cost Options 27 LOW-TECH INFRASTRUCTURE which scans input and translates it into ASCII-formatted EDI data. A low tech-no tech EDI service must cope * Wireless data technology, including radio with small to very small volumes of input frequency (RF) and cellular data technol- and output. This requires batch processing ogy, using cellular voice or cellular data techniques rather than real-time or interac- networks. tive processes. * Wireless personal computer technology. Intermediaries are just part of the * Customer input terminal, a specially existing infrastructure that could support engineered equipment, specifically built low-tech, no-tech EDI. Another part would for a single purpose. For example, it may be the "noncomputer technology" that is be a hand-held device with a screen, likely to exist today on the premises of keyboard and fax-data modem, capable small businesses. Many small businesses, of inputting, receiving and translating even in Asia, already have personal com- one or two document types. puters, but several of them refuse to use computers for EDI, using the machines for THE HYPOTHESIS specific jobs and nothing else. For EDI, the technology should be relatively current, There are some basic premises for the low electronically-based business machinery, tech-no tech model. connected to some form of communications No matter what the partners' circum- network, such as the telephone, telex, fax, stances, provided they have one of the and point-of-sale (POS) device (EPOS, ECR, suitable basic devices (phone, fax, telex, EFTPOS). As time goes by, the list would and so on) installed, they can be connected also include the cellular phone and other to the world of EDI. cellular data devices, such as portable The very large hubs, on the other hand, faxes. will be able to utilize their existing VAN infrastructure to send and receive data. In BROADER TECHNOLOGY INITIATIVES ideal circumstances, they need not connect electronically to any other service vendor. There are more sophisticated machines and A not too price-sensitive intermediary technology available, which would assist infrastructure in combination with the VAN intermediaries to provide an EDI service infrastructure can facilitate low tech-no between both noncomputerized trading tech EDI. For example, if a small enterprise partners and hub EDI users. Among them only sends one invoice a week, then US$5 would be to US$10 EDI charge for that invoice would not be considered too expensive. * Store-and-forward fax services, fax on This is not a hypothetical situation. demand, toll-free fax services and optical Several Asian territories are trying to make character recognition (OCR) faxes. EDI possible for nonautomated traders. * Telex technology, such as soft, or pro- Singapore has already made some progress. grammable, telex machines and telex-to- Singapore Network Services (SNS) and fax services. Singapore Customs helped to establish * Voice processing services, such as digital several EDI data entry-output bureaus for voice-in, data-out services. their import-export approval and quota * Point-of-sale technology, such as scan- control EDI system. Additionally, Singapore ners, electronic cash registers, EFTPOS Post now offers an EDI fax service for such and intelligent (programmable) POS messages as export approvals and acknowl- devices. edgments. Hong Kong, Taiwan (China), * OCR devices (scanners) and magnetically Malaysia and Korea will now follow suit encoded character recognition equip- within the next two or three years. ment. * Imaging technology, such as digital THE MODEL photography for document storage, archiving and editing. Two functions are needed to complete the * Intelligent character recognition (ICR), EDI loop. These are EDI-out and EDI-in. 28 Information Technology and National Trade Facilitation: Gutide to Best Practice EDI-out is where a hub can deliver mes- Because none of the messages are printed, sages (via an EDI service) to any trading the hub's trading partner enabling tables partner. The messages start in the format can be simplified. and medium of the hub's choice. EDI-in is The messages are transmitted as an where any partner can deliver EDI-format- aggregate file to the VAN. Messages with ted messages to a hub's mailbox, using any valid electronic trading partner addresses appropriate technology or intermediary for are delivered to the appropriate mail boxes. that purpose. For both EDI-out and EDI-in, Those without valid trading partner ad- the conversion of data between the hub and dresses, but with a default address, are the trading partner is transparent to the delivered to a dead letter mail box (DLMB). parties at either end of the transaction. The DLMB can be accessed by the VAN The EDI-out process is shown in Figure itself or by any of the intermediaries 5.4. The idea of EDI-out is that any EDI hub previously identified. can treat all of its trading partners as if they For example, a VAN may access this were EDI capable. With cooperation from DLMB, interpret the file of messages to a the VAN, this is not difficult. The VAN may standard print format and then fax them to have to do a little development and may their destination. This would mean that a have to charge a little extra. However, the fax number would need to be picked up VAN has incentive to cooperate because the from the profile tables and inserted into the EDI-out service will increase data traffic message. The VAN might bill the fax through the VAN. In addition, the hub recipients for processing and fax charges. should be interested in paying a little more Alternatively, a toll-free number could because the service will help the hub be used for a fax-on-demand service. eliminate systems that support both EDI Trading partners could dial into the service and paper. to receive their messages, and the costs All messages for any trading partner are would be billed to the hub. translated by the hub's data processing If an intermediary, such as a postal system from the application format into authority were to access a DLMB, it would EDI format and then delivered to the VAN. retrieve the file, sort it into print or fax I| 2 Trading Partner's computers _,' = EDI Servers (VANS) 1 -J + t_ - Im _i 1. Retrieve EDI messages. . /, + Electronic 2. Sort into EDIPost and EDIFax. Lz - s Mailboxes 3. Transmit faxes. 4. Sort post by code/ type. 5. Print, stuff. 6. Deliver. Figure 5.4: EDI Out, EDIPost and EDIFax Technology and Cost Options 29 groups and levels of service (for example, messenger-courier companies wishing to expedited or regular delivery). The inter- create new sources of revenue from an mediary would then format the messages existing client base. The technology ex- appropriately and deliver them directly to cludes no one; therefore, competition will the recipient trading partner. keep prices in line. This technology is not EDI to the techni- Several VANs already have vanilla fax- cal purist, and some may worry that this out services, but for registered users only. approach may delay the full acceptance of Several postal authorities are trying out or EDI. Nevertheless, the EDI-out scenario is a investigating EDI post services. At least one step forward; it avoids the artificial EDI international courier company plans to situation where partners buy hardware and introduce such a service. In addition to software just to print out EDI messages. (A Singapore Post, Australia Post has offered large proportion of EDI users do just that, an EDI post service since 1992. Australia which can hardly encourage others.) Post also offers an EDI data entry service Also, most of the economic benefits of for personal income tax returns. this scenario appear to go to the hub. The U.K. Royal Mail has had an EDI However, it does allow the smaller trading post service since 1991. By October 1994, partners to be part of an EDI network volumes were increasing by 50 percent without great cost and effort. More impor- every month. In Hong Kong, DHL, the tantly, it allows the smallest traders to courier company, unsuccessfully bid for an participate in QR and JIT communities and input bureau service for Hong Kong's avoid the risk of losing business because national EDI service, Tradelink. they cannot support EDI. The format of data delivered to small The EDI-out process may introduce new trading partners need not be limited just to players into the electronic trading vendor print or fax. Telex is a reasonable option. infrastructure, such as postal authorities Estimates of the installed worldwide telex wishing to protect their revenue and base range from 200,000 to 1 million. In EDI Input Bureau Key, enter or scan documents _ Transmit to VANs P Post, courier or hand deliver documents * Fax documents (toll free) VANS-Electronic Mailboxes Im;: I.s i Ia ''' Ia a1'; .tI 1 LD-tee---11 1- . t!e"ll - =Fl1ll C -s j bti---LA_.--'-- Figure 5.5: EDI Input Bureau 30 Information Technology and National Trade Facilitation: Guide to Best Practice places such as India, China and the African Customs agents in Australia and New countries, the telex population is actually Zealand offer an EDI input-output bureau increasing. In addition, there are many for nonautomated customs agents in their telex-to-fax services, in virtually every neighborhood. Chamber of Commerce country where there is a fax store-and- branches in Hong Kong are likely to offer forward service. this type of service for the national Another option might be to deliver data Tradelink Restrained Textiles Export to trading partners by voice, particularly if License (RTEL) EDI service. there is a local voice processing service. An example of an implant involves Sears This might be a little esoteric, but it may be U.K., who offers an EDI post service in useful in industries like grocery, where cooperation with the Royal Mail. Sears U.K. orders are often phoned out by the buying is the country's largest retailer with mail department. orders, apparel and footwear retailing and The EDI-in process is described in footwear manufacturing as their principal Figure 5.5. Useful though it may be, EDI- businesses. out only addresses half the problem. Hubs The physical delivery of a document to a are still left with the data capture-data bureau so that the data from it may be entry half of the problem. This is where we keyed into a system is labor intensive and can go back to the 1960-1970s for an idea. slow. An alternative to this approach is to The service bureau, for plain data entry or fax documents to service bureaus so that for a full input-output service, is returning, the documents may be keyed. An enterpris- but with some 1990s twists. ing organization is considering offering a In densely populated areas, like many toll free fax number, so that the documents Asian cities, the concept of a walk-in EDI may be collected and keyed at a single bureau has taken hold. At one time, national center, thereby avoiding the Singapore had 16 walk-in bureaus. This overhead of city center facilities. number has now been reduced somewhat Deeper problems concern VAN end user by market forces. identities (IDs). If a bureau acts on behalf of The idea is simple. The input document many trading partners, it may use a single is taken into a bureau that supports the VAN ID for all partners. This raises audit entry of a number of standard document trail, security and ultimately legal issues. types in a single formatted layout. The These are not roadblocks; they are merely document is keyed or otherwise converted points to be aware of. The trading partner into an EDI input document. The sender agreement would still be in force between pays on the spot (or on account for larger the hub and each of its trading partners. traders) and receives a statement complete The service bureau and the VAN would with details for tracking and tracing (for have agreements with its users similar to which bar codes are useful, pre-printed current post office or courier agreements. onto data entry documents). Bureaus performing this work are This is the basic EDI input-output virtually an instant fix for the countless service; there are many existing examples thousands of small users who are hesitant of such bureaus, including accountants for to adopt EDI. As the number of hubs tax returns, customs agents for import- expands, and their trading partner base export documents, "implants" (data entry swells, the business case for a walk-in fax- department for hubs) that offer a service to in bureau becomes stronger. The service is their trading partners, and post offices for significantly less price sensitive than a VAN public utility bills, tax returns. service, since the bureau provides an end- For example, all tax agents in Australia to-end high-value added service. and New Zealand, and all Australian post This simple bureau approach (shown in offices offer an EDI-in tax return service. In Figure 5.6) is almost immediately appli- return for submitting personal tax returns cable to current EDI initiatives. Since this electronically, the Tax Office guarantees approach will bring to the industry a new refunds (if permissible) within 14 days. group of intermediaries, such as post Refunds are sent by EFT direct to the tax offices and couriers, EDI will be given a payer's bank account. new stimulus. Furthermore, because VANs Technology and Cost Options 31 will be receiving low cost and regular individual may wish to import or export revenue from new traffic, they are likely to something personal, file an annual tax invest more in marketing the EDI ramp up return, or pay a public utility bill, and does process. not wish to stand in line at a government However, the idea has its drawbacks. office or a service bureau. The bureaus will only be able to service The other situation is where a national certain market segments and common authority has mandated EDI for certain document types. They will also only be able processes (such as export declarations) for a to handle a limited volume of activity. community that is largely not computer- There will probably be natural thresholds ized. For example Hong Kong's 120,000 to variety and volume that may place a traders, the majority of them not computer- limit on EDI growth. Take, for example, ized, may soon be told to declare their document type variety, infrastructure costs, import-export transactions by EDI. By 1999, data capture costs, or sheer volume and these 120,000 traders will be processing 75 turn-around restrictions. Some very large million documents each year. With errors, organizations have already anticipated this resubmissions, and so on, this will come to potential problem and are applying tech- over 100 million documents a year, each nology to solve it. containing an average of 750 characters, perhaps 35 percent of them in Chinese! The NOT SO LOW TECH EDI government may guarantee that these transactions will be turned around (acted There are two situations that may fall upon) within 48 to 72 hours. Because of outside the scope of the basic service of volume, archiving and retrieval issues, as manual data entry using a personal com- well as turn around guarantees, the basic puter. The first involves the casual EDI service bureau concept will not be adequate user; perhaps an individual who has to for all EDI input and output needs. make a solitary EDI transaction. This Two other technologies might overcome Imaging/Scanning/ ICR * Fax In * EPOS P OCR Walk In * Telex In * Voice Processing * MICR * Mark Sense * Audit Trail Data Entry * Help Desk Translation I Log * Bilring A RF - ~~~VCDN Other VANs Intermediaries and IVANs End Users A EDI Users I. I. Figure 5.6: A Model EDI Service Bureau 32 Information Technology and National Trade Facilitation: Gutide to Best Practice these particular problems-telephone * Text-to-speech is the process of convert- technology for the casual user situation and ing ASCII text into zrynthesized voice. For imaging technology for the high-volume, example, in the grocery industry, a high-speed situation. purchase order could start as text but be delivered to a supplier as voice in a voice VOICE PROCESSING: TELEPHONE mailbox. TECHNOLOGY * Voice recognition techniques convert voice into digitized computer records. This is a rapidly developing technology in This technology is of general interest for its own right. There are six basic voice EDI input purposes. Imagine the produc- processing technologies or services: tivity gains if a customer could place an order by speaking into a computer, * Voice messaging is voice input that is which transforms that order into an EDI digitized and stored for later use. Voice purchase order. Table 5.5 gives units messages can give the casual EDI user used in voice recognition-generation questions or prompts that tell when and systems. how to enter data through a telephone keypad. Work is proceeding with all of these * Voice response is voice output generated voice processing technologies. Some of by computer. This is for public use, often these will undoubtedly find their way into for generalized messages (for example, EDI applications, especially for casual users timetable information). and for very simple messages. * Interactive voice response allows a caller to retrieve specific information in re- SCANNING AND IMAGE sponse to prompts and the caller's use of TECHNOLOGIES a keypad on a telephone. This is often used for database access and for retrieval The main technologies under this heading of specific information, such as stock are scanning, which is a form of digital quotes. photography, and OCR. There are various . Transactional voice response allows nuances to the OCR approach, starting with callers to go one step further, facilitating Magnetic Ink Character Recognition the input and output of information. This (MICR), which is traditionally used for has limited EDI applications but could be reading data at the bottom of a bank check. used for message amendments, alter- Typefaces and fonts specifically developed ations and cancellations. for OCR have also been widely used for Table 5.5: Units Used in Voice Recognitionl GenerationSystems Unit Number in English Definition Phoneme 40 Smallest unit of speech e.g. generalized "k" sound Aollophone 230 All the variations of each phenome, e.g. the k in keep, cup and coop Diphone 1,400 Center-to-center; one phoneme to the next Syllable 20,000 Vowel and its immediate consonants Demisyllable 1,000 Consonant and part of vowel Morpheme 12,000 Smallest meaningful unit Word 100,000 (US) dictionary entries Word, all forms 700,000 Includes plurals Technology and Cost Options 33 such applications as subscription data and or upper portion of the screen displays the charge card accounting. Other symbologies original scanned image. The other portion for OCR include standard and special bar of the screen is organized to display a data codes for document type recognition, entry screen so that the operator can read sequential numbering and product and the source data from the scanned image and shipment data (the track-and-trace applica- then complete the data entry screen with tion). the aid of a keyboard and screen-based A much earlier form of scanning used template. mark-sense or mark-space techniques, This process may be no more efficient whereby preprinted forms, containing than data entry from the original paper specially shaped fields, were completed (or document. However, it eliminates the need left blank) using specific writing tools, such to store paper. It also allows documents to as a magnetic lead pencil. The scanner then be retrieved and edited quickly. It further recognized the completed fields in order to provides an audit trail and document identify a pattern. tracking and tracing advantages. Generic scanning applications include If the scanned image can be read by the EPOS devices, Fax-OCR technology, and Intelligent Character Recognition (ICR) bar code scanning-type technologies. logic and be automatically converted to EPOS devices and hand-held scanners EDI, then real efficiencies can be achieved. are all used for bar code reading. Figure 5.7 shows how artificial intelligence The fax-OCR technology enables a fax is used in the process. machine to read and interpret incoming A number of major banking applications textual or bar code data. Both formats are for ICR are already in use. ICR is a natural now in use for applications such as data- for EDI if recognition levels can be made base updating and newsletter input. The sufficiently high and if the computer OCR technology reads the fax image, processing load can be made cost effective. converts it to ASCII and manipulates the Rules processing and artificial intelligence ASCII characters. It is natural to expect that approaches are now being used to improve these ASCII characters might be manipu- confidence in the ICR-to-EDI process. Work lated into EDI format. Yet, so far the reli- is being done on this technology by at least ability of character recognition methods is three hardware vendors and numerous not adequate to support an automated fax- software companies. Table 5.9 illustrates the in, EDI-out capability, statistical probability of encountering It should be remembered that fax-OCR is not an extension of text-to-fax, which Table 5.6: Resolution of Printed Characters works in the opposite direction. Bar Code scanning-type technologies are Dots/Inch Quality Pixels for A4 page those that scan OCR fonts, MICR characters and simple shapes (such as check marks 50 TV; not legible 425x550 and crosses) in predictable locations on a 100 Just legible 850x1140 form. This category also includes "mark- 200 Lacks crispness 1700x4400 sense" techniques. 400 Printed page 3400x4400 Imaging offers the most potential of the applications discussed here. In the classic sense, imaging involves placing a docu- Table 5.7: Picture Resolution ment on a flat bed scanner and digitally photographing it so that a perfect image is Example Resolution captured, stored and archived in a way that (dots per inch) allows the image to be retrieved rapidly. Off-line storage is achieved by optical discs. Photograph 3000 Imaging and scanning requirements are Print of photo 1500 shown in Tables 5.6, 5.7, and 5.8. Polaroid 1300 An operator may manually translate an Hi-Res Scanner 800 image into EDI by viewing a large screen Human Eye 700 that is divided into two parts. The left hand Television 50 34 Information Technology and National Trade Facilitation: Gniide to Best Practice Table 5.8: Sizes of Typical Documents in Computer Storage Units Document Bytes Floppy Disks Mag Tapes/ CD-ROMS Page 2400 .003 0 Report 7.2x104 0.1 0 Book 7.2x105 1.0 0 Dictionary 6x107 83 0.06 Encyclopedia 1.3x108 180 0.13 Local library 7x10'° 97,000 70 College library 7x10"3 970,000 700 Library of Congress 1.8x10l3 2.4x107 18,000 particular words in free text. Similar tables correction of errors. The first commercially will need to be constructed for terms used priced and technically satisfactory ICR-to- in individual EDI applications if ICR is to EDI applications are expected as early as become useful. 1996. A practical ICR application for convert- ing data to EDI format must be able to OTHER TECHNOLOGIES recognize an acceptably large proportion of input data while also supporting manual There are other technologies likely to affect EDI over the next few years. These include Table 5 .9: Statistical Probability of wireless, or RF and cellular data technol- Tablunter5.9 Statistical Probability oogy, and customer input terminals or CIT Encountering Words in Text tehooy _ v ~~~~~~~~~technology. Word Frequency Wireless technology offers the ability to transmit data independent of traditional the .0700 terrestrial networks, enterprise networks of .0364 and local area networks (LANs). The two and .0289 major technologies involved are RF and to .0261 cellular data networks (CDN). RF is typi- a .0232 cally used for command and dispatch in .0213 applications, such as police, fire, ambu- that .0106 lance, taxi and warehousing. Operational is .0101 instructions are displayed on screens was .0098 installed in mobile equipment (taxis and he .0095 ambulances). for .0095 it .0088 with .0073 Inference is an artificial intelligence tech- as .0073 nique of constructing meaningful output his .0070 from partial data. As an example try to read on .0067 this sentence with only vowels and then be .0064 with only consonants. at .0054 by .0053 A- a- e-a-e, - -o -ea- -i- -e-e-e -i- o- I .0052 -o-e- a- -e- -i- o- -o-o-a-. this .0051 had .0051 -s -n -x-mpl- try t- r-d th-s s-nt-nc- w-th not .0046 -nly v-w-ls -nd th-n w-th -nly c-ns-n-nts. are .0046 but .0044 from .0044 Figure 5.7: An Inference Example Technology and Cost Options 35 Application software that generates RF extend the functionality of fixed-function, output is now being delivered with EDI low cost, mobile EDI terminals. functionality. RF-facilitated warehouse, distribution center and transportation EDI CONCLUSION applications are expected in the near future. Some trials on ship-to-shore RF applica- There can be no substitute for a fully tions have been carried out for transmission integrated EDI-capable trading commullity, of manifests, requests for dockside services which must remain the clear objective of and requests for preclearance by customs EDI users. However, most commullities will authorities. take a long time to fulfill this objective, and CDNs have greater potential. Any it will not be a cheap solutionl to begin with, network supporting cellular telephones can since the implementation and awareness support cellular data devices, such as tasks are generally people-dependent, personal computers, fax or portable rather than technology-dependent. In fact, EFTPOS equipment. Therefore, remote there may be greater resistance as EDI gets applications, data bases and EDI services into the second and third tiers of trading can be liberated from terrestrial networks, partners within a community. thereby enabling a range of new mobile EDI In the meantime, the EDI-out and EDI-in applications (such as field sales and field approaches can make a significant contribu- engineering). tion toward the long-term objectives. It CITs are now widely used for capturing should be remembered that the techniques consignment details for applications such described here are neither hypothetical nor as couriers and the gaming industry. academic. All examples of the technologies Combined with a future lightweight wire- discussed are currently in productive use less modem technology, these terminals can for EDI or other applications. 36 Information Technology and National Trade Facilitation: Guiide to Best Practice Annex 1 The Case Studies Field visits were undertaken in the following countries: Argentina Australia Brazil Chile Hong Kong Hungary Malaysia Mexico New Zealand Singapore Taiwan (China) METHODOLOGY ARGENTINA The study used a standard questionnaire as From a technological perspective, Argen- a startinig point, and purely for guidance. tina is like an emerging European country, There was already a great deal of published analogous to and closely linked with Spain, material available on the organizations we but with a time delay of three to five years. planned to visit, much of it produced by the This delay helps create a buffer which in organizations themselves. The question- turn presents a genuine opportunity to get naire, therefore, was designed to help frame electronic commerce right if the correct more specific queries which would get past action plan is put in place. the cosmetics of the organizations' market- EDI started in Argentina predictably ing departmenits presentations and elicit among managers with US experience information of real value to the project. showing an interest in the late 1980s, For example we were interested in the particularly in the oil and gas, apparel true costs and benefits of the initiative, not manufacturing and retail sectors. A few just those which have been made available local initiatives started in 1991 in these for public consumption. We sought opin- industries. At the same time, IBM began to ionls on the respective roles of the public offer their IIN services in response to and the private sector in setting up and customer requests, initially by long line runninig a nationlal EDI-trade facilitation access to their Tampa service. More recently initiative. WVe held meetings with both they have installed an access node or private and public sector organizations and switch based on an IBM Austria EDI ser- listened to views on the role of trade vice. Known locally as the BC service, it management and trade facilitation in the still has technical incompatibilities with the total trade process, the end-to-end supply older IIN which currently makes it an chain. Care was taken to get independent, impractical option for Argentinean users. or at least opposing, and hopefully, balanc- So far, with only about 50 EDI users, ing views on each of these national initia- there are no good examples of EDI benefits tives. or reengineered processes. Nevertheless the infrastructure is growing. IBM are still in a reactive mode. They do Annexl: Thte Case Studies 37 GENERAL QUESTIONNAIRE Status against plan. Reviews: How? When? By Whom? Contacts Correction process. Names, titles, telephone, fax, mail, electronic mail addresses. Lessons of experience Business cards. Local issues, such as politics, vested interests, Any other contacts? religion, culture, business practices, language, standards, legal infrastructures. Introduction: background Regional issues. Organization, key people. International issues. Overall project description. Other inhibitors. Objectives. Facilitators. History of the project How would you do it differently today? Preparation and planning: Who? How? What? Why? How much? How long? Technology issues Sponsors? Why? Hardware. Players and contacts. Software. Motives; justifications. Applications software. Key decisions; influencers. Communications. Stages of the project. Why? Integration. Vendors. Development. Costs. Standards. Projected (and actual benefits) for public Codes. sector and private sector. Vendors. Samples: Business Plans, relevant documen- VANS. tation, legislation, technical material. Interconnection, interworking, standards. Infrastructure, available skill levels. Current status Sponsors, reporting lines. Message development Organization. Which? Why? Specific key players; duties. Which standards. User communities; types. Implementation guidelines. Numbers of users; break down by user type Codes involved. and application/ industry. Compliance checking? Why? Why not? Service types (trade facilitation, general EDI, electronic mail, information services, Roll out plans network access services, hardware, Fully integrated EDI. software, implementation, consultancy, Interfaced EDI. training and education, and so on). Bureau(s). Pricing, contracts. Low tech-no tech EDI. Revenue per employee, per user. P.C., LAN, mid range, mainframe: numbers, proportions. Preparation Post office. Academic, intellectual leadership: Who? Technical innovations. Awareness, education. Who delivers, who pays? Competition Reengineering efforts? Impact. Specializations. Further plans: milestones Resellers of VANS. Software resellers. Planned benefits and costs Implementers, consultants. Original plan; performance criteria, indicators. Review and summary 38 Information Technology and National Trade Facilitation: Guide to Best Practice not yet offer consultancy and implementa- offer a local INS system implementation, tion services, but rely upon third parties, and most recently AT&T, with an interna- the principal among whom is EDI SA. EDI tional transport pilot. SA have already installed the Supply The GEIS service is a custom built data Technology STX PC translation software, entry, electronic mail service for auto Promenos software for AS 400, and Atlas manufacturers and suppliers. The AT&T software for Unix. These have been imple- pilot is intended to implement bay plan- mented in the apparel and textile supply ning (EDIFACT BAPLIE) with a local chain based somewhat loosely on the U.S. container terminal and one or two confer- KMart-Levis model. They all employ ANSI ence line shipping companies. X.12 for purchasing in a pilot project. The STARTEL system has the first More recently, a tender for an industry Internet access rights; all four VANS offer EDI service was invited by CODIGO, the electronic mail. Argentinean EAN authority. Although The situation is complex to say the principally chartered with promoting EAN least. Of the four VANS, two (IBM and bar code implementation, CODIGO also AT&T) do not offer local access. There are promote EDI to their members. One of three sets of standards in use, or about to their principal member groups, the super- be in use: ANSI X.12, UN-EDIFACT, and market industry, is well along the path to EANCOM. There are at least six translators full bar code implementation, but probably in use, and probably less than 100 users in has a further five years to go before it total. achieves 100 percent EAN compliance. In The consultancy, implementation, and the meantime, CODIGO is trying to integration industry is in its infancy. There establish the infrastructure for EDI. is no EDI association, bar coding is par- CODIGO received a number of tenders tially complete but probably needs another for their EDI service. In the event, the five years for full adoption. Customs have project was given to a combination of not yet made a commitment to EDI. Telecom Argentina and Telefonica, the However, there is a powerful local ship- state telecommunications duopoly. The ping and customs agent's lobby which service is based on the current Spanish takes a fiercely defensive position on local national system, running on a Tandem practices which are comparable to Medi- platform, using GSI end user EANCOM terranean practices of the 1950s and 1960s translators and OFTP file transfer soft- and some contemporary Asian practices. ware. This is a local Spanish implementa- There have been two national EDI tion of a retail industry closed user group. conferences operated by an international It provides no facilities for other EDI conference organizer, where expenses standards, no access methods, no software came to over US$1200 a delegate! products or interconnects with any other Finally there are no existing intercon- network. GSI is a French system, based on nect arrangements between the VANS; and French procedures, and has a limited there is no published national vision or appeal to companies who demand an open strategy on electronic commerce, either approach to EDI. from the private or the public sector. The CODIGO system, called STARTEL, All major initiatives, such as, oil and has several high profile potentially com- gas, automotive manufacturing, apparel mitted users among their owIn executive manufacturing, supermarket retailing and board members. However, based on international transport, have expansion international precedents, it will need to objectives. CODIGO is reportedly planning open up the system considerably if the for 500 users within two years. third party software and integration While the basic technology infrastruc- infrastructure are to help ramp up usage. ture is being put in place, albeit with serious technical deficiencies when com- CURRENT STATUS pared to a mature electronic commerce marketplace, the proven prerequisites for There are now four VANS represented in success at a national level, particularly in Argentina: IBM, STARTEL, GEIS, who trade facilitation, have not yet emerged. Annex]: The Case Stuidies 39 There is a possible exception. The two AUSTRALIA separate banking clearance networks are holding talks about amalgamation and EDI originated in Australia in 1985, when thereafter offering a national electronic the auto manufacturing industry set up a clearance system. Possibly financial EDI committee to investigate the application of will lead the way for business messaging, EDI to the auto assembly industry. The but this is a speculative proposition at the retail industry followed a year later, under moment. the auspices of the Australian Product Number Association (APNA). With the DISCUSSION development of interest in EDI, VANS began to offer their services. There are national cultural imperatives VANS currently offering services include which are inescapable. For example, the Telstra, the major deregulated telecommu- cultural role models of Spain and Southern nications carrier; GEIS; NEIS, a local VAN, Europe and traditional business practices in currently on offer for sale; AT&T EasyLink, trade processing and clearance procedures. set up through the acquisition of a local There is also a regulated telecommunica- VAN Paxus, who in turn bought a govern- tions duopoly with the relatively ment network service, CSIRONet; BT uncompetitive and expensive service which Australasia who are not offering EDI in this situation breeds, when compared to the Australia; IBM, who offer a service but not fully deregulated, fully privatized model. actively; SITA, who offer the specialist There is nothing fundamentally wrong airline cargo EDI services; and SWIFT with with electronic commerce in Argentina but its national operation in Australia. AAP- a nationally-funded government-directed Reuters entered, and left the market during initiative would provide all the leadership the period 1990 to 1993. and impetus that this market needs. But for There is a good infrastructure of soft- that to happen, the Argentinean govern- ware houses, technical developers and ment must be made aware of the potential consultants. The VANS themselves have of electronic commerce to the nation. largely abdicated implementation and Culture, vested interests and inappropriate technical support to third parties and role models currently make this unlikely resellers: EDI processing margins do not without a powerful external initiative. permit much bundled support. Finally, even if the government were to Several larger users and government take the lead, it is doubtful, given the past departments operate gateways; not neces- history, if the private sector would follow sarily for economic reasons, but to enable any lead which the government advocated. interconnection between networks. This is There is little mutual trust between the two, sometimes called user-based routing. not even some form of equilibrium where The main EDI user communities in common roles are identified and under- Australia are: stood. Emerging trade groupings will help, as will association with larger trading * Import-export, customs brokers, trans- blocs; but the time that will take will port and customs. probably damage, not enhance trade * The retail industry. competitiveness through electronic com- * The automobile assembly industry. merce. * State and federal government supply management. * Electronic tax lodgment. * Healthcare and education. * Heavy engineering. * Various smaller initiatives, including TV advertising, hardware sales, primary industry, pharmaceuticals, packaging, retail fund management. _ g1 > >* A limited range of electronic banking initiatives. 40 Information Technology and National Trade Facilitation: Guiide to Best Practice By the end of 1994 there were probably independent nonprofit-making organiza- around 10,000 EDI users in Australia, tion be created and funded by industry to switching over 50 million messages a year. facilitate efficiency improvements in the trading and transport chain. The govern- TRADE FACILITATION ment endorsed the recommendations, and Tradegate Australia Limited was incorpo- Australia is a major trading nation, cru- rated in August 1989 as a not-for-profit cially dependent upon exports, principally public company, limited by guarantee. One of primary products. Higher value-added of the principal recommendations was that products like machines, IT products and Tradegate should oversee and manage the aircraft, are imported in return. creation of a national communications In 1991-1992 total international trade, of network for EDI and related services within A$107 billion (US$80 billion) was made up the trade and transportation community. of: Tradegate Australia was funded by various organizations, including the Aus- IMPORTS tralian Customs Service, Qantas Airlines, Air Sea Total the Association of Australian Port and Tons (Malaysia) 0.17 34.4 34.6 Marine Authorities, the Australian Cham- Tons (°% total) 0.5 99.5 100 ber of Shipping, the Australian National Value (AS bn) 14.5 36.6 51.1 Maritime Association, the Customs Brokers % of total value 28.3 71.6 100 Council of Australia, the Australian Road Transport Federation, the Australian EXPORTS Forwarders EDI Association, the Railways Air Sea Total of Australia, and Austrade, which repre- Tons (Malaysia) 0.198 317 317 sented the exporters. Tons (% total) 0.01 99.9 100 A$1.1 million (US$0.82 million) in long- Value (A$ bn) 11.5 44.5 55 term loan funds was initially committed by % of total value 20.5 79.5 100 these organizations representing over 2000 individual participants in the trading chain. In 1991, 85 percent of freight was con- Today Tradegate also services the informa- tainerized, and 1,790,000 containers were tion needs of the container terminals and processed throughout the year. depots, importers and exporters, banks and Of the 2.7 million cargo consignments insurance companies as they relate to processed each year, 1.5 million (55 percent) international trade. are carried as air freight. Air freight repre- sents 0.6 percent by weight and 48.8 percent THE ORGANIZATION by value of cargo consignments. The consignment transaction processing Tradegate Australia has a Board of Direc- cost in these transactions may be 12 percent tors representing the founding organiza- per consignment more expensive than sea tions. A chairman is selected from the cargo and 15 times more expensive per unit directors. A chief executive officer is re- measure of weight. Emerging business sponsible to the Board for the day-to-day practices will even further exaggerate and activities of the company, supported by a accelerate these trends. small team of marketing, consultancy, and administration staff. A major activity is the TRADEGATE management of the various contracts with technology suppliers and value-added In December 1988, after an in-depth analy- service providers. In this sense Tradegate sis of the information sharing and data acts as a cooperative. This complements interchange capabilities of Australia's trade Tradegate's primary role as a facilitation and transport sectors, the National Com- body. munications Working Party (NCWP), set up Tradegate's corporate mission is to by the federal government's Industry improve the efficiency and speed of moving Committee of the Inter-State Commission, goods through the trading chain by wide- recommended to the government that an spread introduction of a comprehensive Annexl: The Case Studies 41 range of Electronic Commerce Services. second level were bulletin board projects on This means facilitating the introduction vessel arrival data, shipping schedules and of EDI and related services that will over general port and terminal data. Customs time eliminate the bulk of the estimated 110 related projects covering Australian Cus- million paper documents that support toms Service publications and system Australia's trading process each year. upgrade formed the third priority. By the end of 1994, EDI based services THE USER COMMUNITY were in operation for preclearance of imports by air and sea, and for export By mid 1994, Tradegate services were in use entries and manifests. Although imports by over 600 member organizations covering were being processed by a dedicated some 2200 user sites. Message volumes interactive network service covering over exceeded 15 million annually, representing 600 user sites across Australia, commercial some 8 percent of the target volume. The EDI took care of bookings, shipping and types of user organizations involved span forwarding, and invoices. Over 600 mem- the trade and transportation community. bers used a global e-mail service including Message volumes are forecast to grow at a fax sender facility. Over 200 regular users around 30 percent annually during the accessed Tradegate and customs informa- 1990s. tion through bulletin boards. The vision for Tradegate is distributed through a series of subsidiary objectives: ROLE OF GOVERNMENT * To facilitate community cooperation The government believes its role in trade through a process of cross sector work- facilitation is to provide opportunities for ing groups. the private sector. Most initiatives, there- * To build a working technical infrastruc- fore, begin at the departmnental or state ture through the VAN contractor, cur- level. But departmental objectives are rarely rently AT&T EasyLink Services. the same as the government's, being more * To create a critical mass of users through susceptible to budgets, internal politics, the Customs Electronic Initiatives pro- personalities and lack of decision making. gram. Hence, the first customs initiative, EXIT, * To assist users of the Customs Electronic was introduced to capture export statistics Initiatives program to become EDI and to reduce the data entry load on enabled. customs' internal IT departments, and not * To encourage the supply of additional specifically to enhance trade efficiency or to value-added services and end user assist traders. software by third party suppliers. The government has provided some * To actively support the international UN- leadership, but this has come through EDIFACT process. departmental initiatives and projects which * To promote a high market profile for quite often have a political orientation. In Tradegate. the last decade, the government has been of * To develop communication links to the a socialist complexion, with an organized international trade community. labor power base. Consequently, it has been * To provide assistance and education in constrained from articulating the benefits of electronic commerce techniques. a reengineered commercial environment * To work closely with the federal based on electronic commerce. Electronic government's micro-economic reform commerce on the waterfront, for instance, is process as it relates to the reform of predicated upon fundamental reform of Australia's transport environment. work processes. Progress has been slower e than many would have hoped. Finally, end users and community At the state government level, EDI members, through numerous surveys and projects have generally been aimed at state discussion groups, set some priorities, the purchasing and, in the case of New South topmost among them being EDI projects for Wales, a direct entry form of financial EDI maritime and air imports and exports. At a via a state-owned bank. 42 Information Technology and National Trade Facilitation: Guiide to Best Practice The federal government now has numer- exists in North America and Europe. Until ous initiatives operating, the most success- quite recently there were cost and legisla- ful being the Electronic Lodgment Service tive inhibitors for local users to make use of (ELS) for tax returns and payment. The ELS these overseas interconnections. There are is a classic example of a system designed to signs that this is changing; in the meantime, offload costs from a department, which local interconnects are very limited, in both claimed it had saved 300 data entry opera- availability and functionality. So far, only tors as a consequence of implementing EDI. industries with significant purchasing However, there are also benefits for end power to enforce compliance have per- users: refunds are provided electronically, suaded VANS to offer even rudimentary within 14 days of lodgment. interconnects. The idea of leaving the private sector to The local VAN, Telstra, offers an X.400 build the infrastructure and to develop the interconnect and UN-EDIFACT compliance electronic commerce technology is a seduc- checking facilities. AT&T interconnects with tive one for the government. It can easily be Telstra for the Customs EXIT 1 service. rationalized where there is a good existing Telstra and GEIS interconnect for the retail technology infrastructure, where English is industry, at the X.12 compliance checking the natural language, and where there is level. adequate access to capital. In Australia's Trials are taking place between other case this has led to a numerically successful networks, for both major standards, as well outcome. There are at least five VANS and as on financial EDI between separate banks, around 10,000 EDI users. The VANS have but no practical outcomes have resulted for evolved into industry-specialized networks, the last three years. as Australian EDI initiatives are generally driven by industry organizations. VENDORS The other side of the coinl is that, after seven years of electronic commerce experi- Very few of the VANS would claim to be ence, there is as yet no national agenda for making a profit from EDI at the moment. electronic commerce, there is still only Competition keeps the margins down and limited senior executive awareness and the level of service demands keeps the costs little comprehension of its importance at up. Among the VANs, GEIS have special- senior government official level. The ized in the retail industry and some inter- government has never tried to set the national transport projects. AT&T have agenda nor to encourage debate. These concentrated on customs related trade tasks have fallen to the private sector, by facilitation projects, solely through their default. contract as the Tradegate VAN. IBM and BT Partially because of leadership issues are not, so far, active in any serious way; but mainly because of competitive and while NEIS, a local VAN, specializes in marketing reasons, the major banks still do supply management applications for the not offer financial EDI services, nor do they New South Wales state government. Telstra operate a national corporate funds clearing services the automobile industry and house system. smaller groups in many specialized initia- In summary, it is evident that although tives. EDI has so far succeeded at the industry Much of the role of implementation, end level, it has had to be grafted on to a user support, and roll out and project government and banking infrastructure management is now being handled by the which has yet to adopt the principles of industries themselves and by third parties, electronic commerce and reengineered such as software houses and consultancies. processes for national competitive advan- Many of the government's departmental tage. initiatives have been predicated on the notion that the VANs fund all marketing VAN INTERCONNECT and development efforts, and then pay a proportion of traffic revenue to the govern- Interconnection between the major VANS, ment department involved, which has had such as AT&T, BT, IBM and GEIS, already the effect of reducing levels of service and Annexl: The Case Stuidies 43 diluting overall support in those projects. costs were between 8 and 10 times the costs borne by Tradegate for their share of the INDUSTRY ASSOCIATIONS EDI implementation effort. This is one of the first references to the indirect costs of Australia has had an EDI association since implementing EDI. These costs include the late 1980s. Known as EDICA (EDI setting message formats, based on UN- Council of Australia), it has always EDIFACT, message guideline development, struggled to maintain a paying membership systems reengineering, and software adequate to fund its activities. In 1994, testing. But they do not include systems EDICA merged with Electronic Messaging development, integration, internal training, Association (EMA) in order to form Elec- opportunity costs, and technology costs. tronic Commerce Australia (ECA). EDICA Tradegate are pleased with their only had partial success in its mission of progress, but believe they do better with raising awareness and setting the national active government promotion. For example agenda. Lack of funding soon made it a they have tried to get the government to member service organization, dependent on publish a national benefits statement on volunteers for message setting and support- EDI, but with no success. ing activities. It also offered commercial Their main operational difficulties have services which actually competed with its been in selling. Chief Executive Officers of vendor members. Its main fund-raising their target clients generally delegate EDI activity is the annual EDI conference. matters to technical specialists. Where the Most observers agree that the role of an Chief Executive Officer remains involved, EDI association is to raise awareness and there is nothing to guarantee that he or she help set the level of expectation for EDI. will retain the shared vision and continue This means that its activities fall into two to believe in the original objectives. areas: servicing existing users through Because Tradegate is essentially a standards activities and potential users cooperative of end user representative through information, contacts and aware- organizations at board level and commit- ness activities. tees of technical experts at the operations Funding initiatives made this only level, there is a significant gap between the partially possible and led to widespread levels. This gap can only be filled by member dissatisfaction, with a resultant business managers with a grasp of market fragmentation of effort and resources. As a factors and corporate survival strategies. consequence, the EDI association no longer exists as a separate entity. Its secretariat LESSONS FROM THE AUSTRALIAN EXPERIENCE duties are now performed by ECA; UN- EDIFACT responsibilities are now man- The Australian experience offered many dated to the national standards authority, lessons in the implementation of EDI for Standards Australia (SAA). Even under the trade facilitation. For example, it is evident SAA regime, standards activity continues that the government should by now have as a voluntary operation, although the developed a national vision and developed government did help fund a recent UN- a national promotion campaign to publicize EDIFACT JRT meeting in Sydney. the benefits of electronic commerce, and a national education program in coordination ASSESSING TRADEGATE with it. The benefits of international (UN- Tradegate commenced with A$1.1 million EDIFACT) standards should have been (US$0.82) capital, and with three people. promoted much earlier. This would have This level of staffing continued for three encouraged much wider participation in years, after which a tariff on revenues from the EDIFACT process. the VAN began to justify extra staff and There is serious concern locally that the consultants. existence of a local Australia-New Zealand In one Tradegate consultancy study, EDIFACT Board (ANZEB) excludes local developed in an attempt to attract govern- participants from the dynamics and wider ment funding, it was claimed that end user benefits of membership in the Asian 44 Information Technology and National Trade Facilitation: Guiide to Best Practice EDIFACT Board (ASEB). Currently the BRAZIL membership of ANZEB is limited to gov- ernment officials and EDICA (ECA) execu- A volatile and confused economic history tives. End users have no direct voice, apart has its parallels in the use of electronic from the rapporteur. Because of funding commerce in Brazil. Led by the banking restrictions, the rapporteur is perforce a sector for many years, most of the neces- distinguished but retired public servant. sary technologies have become common- It is also a matter for concern that EDI place. A deregulated VAN market has also for trade facilitation has not been mandated helped create the basic infrastructure. But after a period of grace, say three to five lack of central direction and cooperation years. It is still optional. between the public and the private sector In all this, EDICA should have had a has led to a multiplicity of initiatives, many more active and dynamic role to play. It of which are in technological conflict. should have set expectations, focused on The astonishing difference between EDI best practice and message development, in Brazil and in virtually every other acted as a focal point for information country is that EDI started in the banking exchange. Instead, very little reengineering sector. Many years of inflation and uncer- is actually being done; and at the same tainty about future costs forced the banks to time, it has not been easy to get govern- cooperate very early on such things as ment bureaucrats to adopt external ideas formats for data transfer between them- and to surrender some of their power over selves, usually by file transfer. Beginning in their fiefdom. the 1970s, the CNAB (National Council for A major problem is emerging with Banking Automation) specified standard message guidelines which were developed message and file layouts to reconcile intra- by industries in isolation from their over- and interbank holdings at a new reconciled seas trading partners, including some who daily value. Because of the rapidly dimin- have not yet committed to EDI and do not ishing face value of bank notes, automation fully understand the issues. This is fine for was employed as early as possible for a trade cluster with known participants and collections and settlements. Similarly where the industry leaders set the agenda. automation has been consistently used to But where this effort is happening in operate on predictable costs and minimum parallel, message sets and guidelines are staffing levels and to mitigate the impact of bound to be unsynchronized. This is rampant inflation as far as possible. increasingly true for trade facilitation Some banks operate their own networks across international trading groups. For and offer full accounts payable, accounts example, exports from Mexico, even under receivable, and cash management electronic the UN-EDIFACT message standard, need services, usually through a direct entry different guidelines for NAFTA, EU, APEC, (dedicated terminal) and using proprietary and other specific regions. standards. The central bank requires entry There is some move towards an interna- into the international settlement and tional registry of message guidelines, which clearing system and SWIFT access by a must be given strong powers if it is to similar (proprietary) direct entry system. overcome these emerging problems of There is no interconnect between central incompatibilities between international and banking and the other proprietary banking intertrade cluster message sets. and interbank network systems. An interbank network was developed in the 1980s through a cooperative arrange- ment of around 70 banks (of the total 240 banks in Brazil). There are very large numbers of elec- tronic banking service users. These are not ( % \ g rcs r:tEDI nor financial EDI systems; they are private format, dedicated terminal, direct entry systems. Nevertheless, they operate as paperless systems and provide a vital Annexl: The Case Studies 45 service for corporates in a country with a electronic mail and is soon to offer the volatile currency. nation's first commercial Internet access. A new interbank switch, known as Other VANS include: Interchange, owned by Unibanco, Citibank and Banco Real is currently handling 10 * Proceda, a Brazilian-Argentinean corpo- million banking transactions each month, rate joint venture. Proceda now resells something like 40 percent of the national the GEIS service. total. Interchange is now converting to UN- * GSI was established in 1990. It is now the EDIFACT message sets for users, although IBM reseller. it will switch between banks in private * Interchange is the banking VAN, operat- formats. There is still no interconnect for ing an OTC (Telstra Australia) X.400 the central bank and SWIFT transactions service. from the bank's own networks. Currently, at least 650 industrial groups, The combined revenue of the VANs over representing possibly as many as 15,000 the last three years was: end users, are using existing proprietary banking formats. Around 15 percent of (US$ million) these have indicated a willingness to 1992 1993 1994 1995 migrate to Financial EDI and then into (estimated) business systems EDI using EDIFACT. 8.3 16.9 27 50-60 There are a number of peak industry bodies and national initiatives which are Usage, in 1994, was broken down to 48 taking the lead in electronic commerce. percent in banking, 6 percent in transport, SIMPRO Brazil is the trade simplification 20 percent in general commerce, 6 percent authority, based on the U.K. SITPRO model. in the auto industry, and 20 percent in Its mission is now to promote UN- others such as insurance and credit cards. It EDIFACT as the national standard as well must be remembered, however, that stan- as to promote its use for international trade dards-based EDI is probably less than 10 data flow purposes. The Chairman of percent of these figures. SITPRO, is the PanAmerican EDIFACT There are two regional government Board (PAEB) rapporteur. initiatives, both for ICMS (a local value- EAN Brazil are also promoting the use added tax). They are proprietary systems of EDIFACT (EANCOM) for general com- using EDI principles, and are a regional, merce, particularly in the manufacturing, not a federal tax initiative. distribution, warehousing and retail indus- In 1995, the Brazilian federal govern- tries. ment asked SIMPRO for a submission on The banking association is still currently EDI for customs usage. Initial discussions supporting both private standards and are still in progress. EDIFACT for corporate and banking Unibanco, a major Brazilian bank, in clearance purposes. The central bank does concert with its partners in Interchange, not yet appear to have a position on began to offer value-added banking (VAB) EDIFACT but may be forced into a position services based on EDIFACT standard as SWIFT migrates to EDIFACT support. messages in the same year. Interchange will The auto manufacturing industry have a retrieve and deliver messages to all VANs, private format version of file transfer data other banking or private networks, or even exchange, while customs appear to have no direct to clients' own networks. They position on EDI, nor on EDIFACT at the provide an optional remittance advice moment. (EDIFACT REMADV), which may alter- nately be delivered by a VAN or point to CURRENT STATUS point by corporates. EAN Brazil are now attempting to Telecommunications is only deregulated for develop national EDIFACT message guide- VANs services, but voice is still regulated. lines, integrating Brazilian codes into The national carrier, Embratel, which EANCOM and EDIFACT messages. The launched an EDI service in 1995, also offers first two messages to be completed are 46 Information Technology and National Trade Facilitation: Gutide to Best Practice PAYMLT (multiple payments) and its A national shared vision articulated by Response message. the government is locally considered only In 1994, SINDIPESA, the Brazilian partially useful. A joint initiative with manufacturers association, recommended a agencies such as SIMPRO and EANCOM national standard for the auto manufactur- carries more support in the business com- ing industry. It contains 17 message types munity. Government-only guidance would and is based on ODETTE, the European be unwelcome although the issue of man- proprietary EDI system for auto manufac- dating EDI for customs clearance has some turing. ODETTE is in fact a message set and support, since a similar mandate for ISO a file transfer protocol (OFTP). The Brazil- 9000 proved to be effective. ian banks have rejected this proposition, In summary, inflation led to an informa- but discussions continue. tion explosion which in turn led Brazilian EAN Brazil have been developing banks to an electronic regime much earlier commercial EANCOM message sets since than in many other countries. The advent of 1993. They have helped around 60 commer- VANs over the last three years has given cial companies into EDI, using 8 to 10 EAN rise to concerns about banking messages. There are now several EAN disintermediation, resulting in a greater initiatives including hardware-wholesale, fillip to banking or financial EDI. Private the supermarket industry (which is now sector agencies and peak industry bodies nearly 100 percent product bar coded), are now taking up the challenge for busi- pharmaceuticals and transport. Their target ness systems EDI. Although there are only is to have 350 users by end 1996. A user is 100 to 200 true EDI users in Brazil at the defined by EAN Brazil as a large company, moment, there are few technological or hub; but they also hope to attract 10 to 20 inhibitors to growth. percent of medium-sized companies into these projects. A service bureau, Siscomex, specializes in trade documentation. It is talking to - . customs on the possibility of including EDI modules in their service for traders. - Mercosul will probably require EDI inter- change between members quite soon. Currently there are no tertiary education courses on EDI or electronic commerce. EAN run regular courses for their own --_ members, specifically on EDI implementa- tion and technology. There is also no law covering EDI. The few EDI translators at all supported, are EDI Edge (by Interchange), CHILE Supply Technology STX, St Paul Software, Unisys' Eadiplus, SSA, Sterling Software, Chile has progressed well with EDI in a and EDI*TIE. The level of support, how- short time; however, the legacies of a ever, is generally fairly primitive except Spanish style colonial administration have where a VAN or EAN supports them. left their mark and present a few barriers to successful implementation. Even so, it is DISCUSSION believed that Chile will get it right first in the region. Their main challenge is to Despite fragmented leadership, peak develop skilled and experienced resources industry bodies and nongovernment and to find a role model for guidance. As a agencies appear to be playing a useful role. Pacific country, Chile may well look to Asia The absence of any government initiative, rather than Europe or North America for particularly to legalize electronic commerce this guidance. is a concern, as are the different views on EDI arrived in Chile fairly recently from standards, but informed debate should two directions: transplanted from the resolve these issues. United States by Chileans working for U.S. Annexl: The Case Studies 47 companies, and through the Chilean EAN. The customs pilot is based on UN- Article numbering is administered through EDIFACT CUSDEC. It is planned to have the National Chamber of Commerce (NCC) three or four pilot users by the end of 1995. which is one of a small number of powerful The supermarket industry is currently peak representative bodies in the country. using ORDERS (EDIFACT Purchase Orders) The NCC has the support and the ear of and Responses between supermarkets and government. Together with the Bankers suppliers. They have about 30 trading Association and SOSOFA (Manufacturers partners in preparation, but only a small Association), the NCC persuaded the number are actually using EDI at the government to help fund the establishment moment. Bar coding in this industry is not of EDI*Chile in 1993. yet the universal practice but is well on the EDI*Chile has taken on a national, cross way. industry EDI promotion and implementa- The banks are testing EDIFACT tion role. Its mandate is to create aware- PAYORD (Payment Orders) at the technical ness, agree on message sets and implement level between themselves at the moment, EDI. It has no direct interest in any VAN. using internal banking formats for inter- EDI*Chile charges membership fees, for bank communications and clearance. The which it provides information, a forum for EDIFACT standards are for use by end users, and implements messages using users, not yet by the banks themselves. EDIFACT and EANCOM syntax and In total, there are probably no more than message sets. It is also creating a set of 50 pilot users in all industries, possibly Chilean message implementation guide- only five or 10 dependent EDI users at the lines in Spanish. In practice, these are more moment. But the pressure is obviously or less a direct translation of the EAN building up. guidelines, but with the integration of local Translation packages being offered at Chilean code sets. the moment include EDI*TIE (a Dutch In 1994, EDI*Chile had 15 members; in package) from EDI*Chile; DNS EDI*EDGE 1995 they have 125 members. They plan to from EDI*Bank; EDI*TIE and EXPEDITE have 3000 members by 1999. Membership from IBM; and St Paul Software from GEIS. fees vary with the size of the organization. Several local packages are said to be under Presently EDI*Chile have a staff of three: a development. general manager and two product manag- EDI*Chile intend to broaden their base ers (that is, applications specialists). to include all six peak industry bodies. There are five VANS in Chile: GEIS, who EDI*Trade is planned for a full customs run a service called Transaction; EDI*Bank declaration service. Financial EDI is with a financial EDI service and interbank planned at the national level using a locally clearing house; AT&T for mainly email; implemented Digital-based clearing house. IBM Advantis; and EDI Trade, a new The government also intend to imple- Customs initiative, which is preparing for a ment scanning systems to support the pilot. health and pensions EDI processing initia- EDI*Bank is a bankers' consortium, tives, to reduce the potential paper moun- representing companies processing 90 tains which will result from current sys- percent of all Chilean bank transactions. It tems. is made up of seven banks and 87 percent There are no specific electronic com- representation from the private sector. merce laws in place yet but EDITChile believe that legislative change will begin in CURRENT STATUS 1996. In the meantime, the national taxation authority have introduced a change in tax EDI*Chile have two government projects. legislation to enable submission of elec- The first is AFP, for the government's tronic invoices for reconciliation of Eva (a pension plan deductions and administra- local VAT), but only for companies above a tion. The second is ISABRE, for health certain size. Eva currently requires a insurance and administration. Both are in signed, watermarked, original invoice for their pilot phases with few, if any, actual all purchases, to be lodged monthly by all users. corporations. 48 Information Technology and National Trade Facilitation: Guide to Best Practice This presents serious administrative vision statement for electronic commerce; overheads for smaller companies. If EDI is and the ability of the port authority to to penetrate all levels of enterprise, a adopt contemporary electronic commerce technical solution must be found to solve and IT systems to help meet capacity this problem. constraints. At the same time, the ability of smaller companies to adopt the technology, DiscussION and the resulting potential for wholesale disintermediation, may test government Although there are only a small number of resolve. EDI users presently, the infrastructure appears to be developing much more along Asian than Latin American lines. The government has taken a position with - EDI*Chile and agreed to use EDI. The NCC . " - and EAN authorities and the banks are also participating. While there may be some grandstanding on UN-EDIFACT at the moment, trade with the United States is likely to draw in ANSI X.12 users. U EDI*Chile is acting as the EDI associa- -_ _ o_ tion as well as an implementer at the moment. Lack of resources, expertise and the conflicts presented by being a represen- tative body and a consultant and implementer at the same time will inevita- HONG KONG bly force role changes. On the trade processing front it is far too Like Singapore, Hong Kong has a small early to make a judgment, although every- land mass and a relatively small popula- one agrees that customs have been too slow tion: 6 million in Hong Kong as against 2.7 to take an initiative. The nationally owned million in Singapore. Both are major land port will present some logistics barriers and sea ports; both depend upon trade, until it adopts EDI. There is severe concern particularly reexports in the case of Hong about its capacity at the moment. Member- Kong. Both countries initiated a project to ship of APEC, NAFTA and association with implement EDI in the early 1980s: Hong the Latin American trade grouping Kong in 1983; Singapore a little later. What Mercosul, and possibly the EU, will soon has happened since that time is symptom- test systems to the limit. atic of the difference between the two There is no electronic commerce law, regions. and no local VAN interconnect at the The most obvious difference lies in moment. VAN experience and their natural government philosophy. Singapore is marketing ambitions are currently prevent- interventionist and paternalistic in nature, ing interconnections. However, since Chile hence offers strong leadership and direc- has a fully deregulated telecommunications tion. This has led to the great success of regime, it is expected that interconnects Singapore's Tradenet EDI services. On the based in the United States will soon be used other hand, Hong Kong has a laissezfaire and that the VANs will absorb international philosophy, taking the approach that connections in exchange for traffic and anything that is ultimately good for trade revenue growth. and industry should be paid for and oper- Chile has proven it can solve infrastruc- ated by private commercial interests. Since ture and public sector problems. The the most important relevant interests are country now needs time to develop skills represented by a small number of large and build on experience. trading and commercial companies, some The major concerns revolve around the of whom are in competition with each other ability of the Eva tax system to adapt to (competition in Hong Kong is much fiercer EDI; a government endorsed national than in Europe or North America), any Annexl: The Case Stuidies 49 collection of strictly commercial interests allow them to leave in the near future. tends to delay action. This has not been helped by the "1997 syndrome," when the TRADELINK colony is scheduled to rejoin China. An additional brake on progress is In 1983, the Hong Kong government helped caused by the practical concern that any sponsor the creation of a special council to trade facilitation EDI must have the active improve trade through trade facilitation. support of customs. However, Hong Kong This council was made up of representa- customs is much less important to its tives of the government, and of major economy than to most countries. Hong trading companies and financial institu- Kong is virtually a free port; very little is tions. The council proposed the creation of collected in the way of duties. The main an EDI system-a database of consign- role of customs is to police borders, to ments-to facilitate trade. The proposed oversee trade quotas and try to contain the system was called Hotline. Promising as drug trade. As a consequence, customs Hotline looked, the council did not have the trade processing IT systems, with the means or the charter to pay for the system. exception of quota management, are very The council then took the project to the limited in scope. Hong Kong government, suggesting that Hong Kong's commercial procrastina- the government build the system. The tion and lack of central leadership have government's reply was that such a system combined to allow Singapore to take the would benefit mainly businesses, and was lead in EDI and to gain significant commer- therefore unfit for official funding. A cial advantage. Which is not to say that survey of trading companies undertaken by Hong Kong is backward in establishing the the council provided another argument for infrastructure. It has deregulated the VANS government sponsorship, noting that most market and has an excellent telecommuni- trade business people said they would feel cations system. For example, there are 17 uneasy if competitively sensitive trade data suppliers of paging services, three mobile were stored by an organization other than radio operators, three telepoint (CT2) the government. Again, the government personal communication systems, two argued that it was not in the business of operators of trunked radio systems for providing information processing services voice and data and over 30 licensees of that could well be done by other VAN value-added services for such services as suppliers. electronic mail, voice mail and store-and- The government's reticence in taking the forward fax services. lead on Hotline resulted in a hiatus in EDI The small number of EDI users in Hong for trade in Hong Kong. Still, the belief that Kong are in the retail industry, shipping EDI was needed for trade persisted and lines, freight forwarders, some airlines and several companies that had participated in a few U.S. based multinationals. Textiles the council started their own forum, and apparel manufacturers and importers Tradelink, to support a consultancy study and exporters are also developing elec- investigating the commercial viability of a tronic connections to the major U.S. and trade-related EDI system. European clients. Even so, with all of this The resulting report indicated that such activity, in the absence of commercial a system would probably not be profitable unanimity and government leadership from a strictly business point of view, and there are probably no more than 500 or so further obscured what roles should be EDI users in Hong Kong at the moment. played by the government and the private Other factors are having a negative sector in creating such a capability in Hong impact, compounded by the 1997 deadline. Kong. The most obvious among them is the very In March 1990, the government an- real damage being done to the economy by nounced that it was setting up a shared the brain drain. During the period 1989 to initiative with Tradelink to take the project 1993, an estimated 40 percent of the top IT closer to a working system. The shared professionals either left Hong Kong, or initiative was called SPEDI (Shared Project obtained a British passport, which would for EDI). The first recommendations were 50 Information Technology and National Trade Facilitation: Gutide to Best Practice published in 1991, eight years after Hotline transport and distribution industry have set was created. up an alternative, Cargonaut. The retail Projects of special interest to SPEDI and industry also launched their own service in the Tradelink partners are: May 1995. Both of these important user bases are now lost to Tradelink, which will * a gateway to government systems, for pose both technical and marketing prob- example, customs and quota systems; lems to them downstream. * VANS and IVANS interconnection, and common access; SUMMARY * EDIFACT message development; * Chinese language standards develop- Surprising as it may seem, the idea of an ment (30 to 50 percent of documents are EDI service designed for a national trading in Chinese; an even higher proportion community, was born in the small island contains at least some Chinese); country of Hong Kong in the early 1980s, * Economic methods of EDI use and access with the Hotline project. for the 80 percent of Hong Kong firms The project, now called Tradelink, was which have less than 10 employees designed to eliminate paper from the (Community Access Service, or CAS); export process and to speed up approvals * A service bureau or paper-based trade and the quota surveillance operations. It facilitation service for these small com- promises considerable economies for the panies. government and the private sector alike. Today Tradelink is a private company Around July 1993, Tradelink announced with an equity partnership of 11 major they had concluded negotiations with IBM Hong Kong enterprises. It has government to provide the Tradelink EDI service, which backing to run a community EDI service, comprised CETS (Community Electronic with equity of between 30 and 48 percent Trading System), end user software reper- being taken up by the government. The toire; and CAS, a concept, based upon arrangement is that Tradelink will get an bureaus and no tech-low tech EDI services, exclusive EDI gateway to the government involving phone, fax, telex and hardcopy. for a period of seven years. The gateway The service was due to go live by early will provide two-way EDI access to trade, 1995, leaving very little time to prepare for customs and statistics departments. In possible changes that might take place in return, Tradelink have to provide electronic 1997. However, catastrophically, during input and output facilities for up to 120,000 1994, IBM and Tradelink abandoned their Hong Kong trading companies. negotiations, each side blaming the other And this presents the real challenge. for either rewriting the specifications or not Most experts agree that after something like adhering to original agreements. By early 10 years of true EDI experience, the total 1995, Tradelink had placed an order for an number of EDI users worldwide is cur- INS (GEIS) EDI software package to run on rently around 80,000 to 100,000. So to fulfill a Hewlett Packard Unix platform. The its mandate, Tradelink has to revolutionize original specifications had been down- the way in which EDI is implemented, and graded to match a revised budget. in so doing pay special attention to the Tradelink, which at one stage had 23 needs of small traders and to the Chinese employees engaged on system design and language issues. message development, are now having to There are still doubts about the rethink their implementation, marketing government's intention to make EDI and support roles, which were originally to mandatory, but without some form of be contracted out to IBM. CAS for compulsion it is doubtful if Tradelink will nonautomated users appears to have been come anywhere near that total of 100,000 placed on hold. There is no public an- plus users in seven years. nouncement on the government's participa- The importance of Tradelink's success tion in the project. for Hong Kong's commercial well being, The launch date for Tradelink's initial and in particular for the export-oriented service is now March 1996. Meanwhile, the industries of textiles, electronics and Annexl: The Case Studies 51 banking, cannot be overestimated. Hungarian industry. But these systems Tradelink EDI is a critical infrastructure were confined to individual plants in the project, but it will be breaking new ground. local economy and did not serve as a No one, anywhere in the world, has had medium for interindustry communication, experience in developing such a large EDI let alone as an instrument for interacting community from scratch. There is only a with consumer markets at home or abroad. small amount of EDI experience in Hong Still, the existence of computer-integrated Kong. Delays have enabled other private manufacturing (CIM) points to the fact that sector competitors to erode Tradelink's there were substantial R&D capabilities in potential customer base, its authority, and Hungary, and all related hardware and ultimately its participation in the full trade software had been locally designed and facilitation process. manufactured. Procrastination, lack of commitment, of The challenge for the Hungarian govern- leadership and, crucially, of a shared vision ment and the local business community embracing both the public and the private was to encourage the reluctant industrial, sectors (compounded by the imminent agricultural and service sectors to adopt changes in 1997) have made the future of informatics concepts and to integrate EDI- Tradelink uncertain. What would have been based management into their production, an opportunity for a quantum leap in trade marketing and sales processes. The urgency competitiveness and regional advantage of this was heightened by the fact that has been turned into an exercise which will foreign competitors had started to aggres- need considerable good fortune just to sively penetrate Hungary's domestic catch up with their regional neighbors. market. The lifting of import quotas and growing liberalization of regulations had created a situation where foreign parties - 7 P - - 1. -could expand their networks into the local economy. These foreign traders and service providers were put into advantageous positions because they employed advanced informatic systems, which the Hungarian / X 9; / b,Cr business community could not match. m' ,J' d << *Hence many local producers and traders ____[i____ efound themselves increasingly marginalized. With the help of foreign aid institutions, the government started to launch several initiatives aimed at introducing effective HUNGARY EDI-based management information systems for trade, industry and the agricul- The earlier centrally planned and con- ture sector. Notable among the aid provid- trolled economic structure had created a ers were the Economic Commission for contrived communication system, which, Europe (ECE) and the World Bank. Both when removed, left an information organizations engaged in market analyses vacuum. There is still widespread igno- and the derived design for informatics rance of EDI as a potential business facilita- systems. The ECE, through its PHARE tor within the Hungarian trade and indus- program, focused on the agriculture sector. try communities. Interindustry relations The World Bank concentrated on develop- and trading arrangements still reflect past ing competitive markets for consumer practices of hoarding inventories and goods while maintaining emphasis on agro- production to stock. As a result, inventory industrial products. Meanwhile, the Hun- turnover rates and order processing cycles garian government, through its ministry of remain excessive by international compari- Transport, Communications, and Water son. Interestingly, however, computer-aided Management (MTCW), took steps to tie into design and computer-aided manufacturing ongoing research in the application of EDI have a tradition in several branches of the concepts in the service sector, especially 52 Information Teclhnology and National Trade Facilitation: Guide to Best Practice transport. MTCW became active partici- and measures within the Hungarian busi- pants in the ECE's Research and Techno- ness community, mainly because of rival- logical Development Program in the Field ries among government ministries. The of Communication Technologies (RACE) former Ministry of International Economic and within the framework of the European Relations, a remnant of previous socialist Cooperation in the Field of Scientific and government structures, proved incapable of Technical Research (COST) program. taking the lead. TRADE FACILITATION CURRENT STATUS During the 1970s, the Hungarian govern- A new HUNPRO was established in 1993. ment had established a specialized body, The former Ministries of International HUNGPRO, which was mandated to Economic Relations and Industry, not arrange for trade facilitation. The organiza- always on friendly terms, were amalgam- tion and goals were modeled after the ated into the Ministry of Industry and British Simpler Trade Procedures Board Trade (MIT). Leadership was streamlined (SITPRO), a leader in such initiatives. and objectives more clearly defined, as SITPRO is an independent executive were the institutional responsibilities. The body established in 1970 by the British new HUNPRO includes three levels of EDI government and sponsored by its Depart- activitv. At the first level, an ment of Trade and Industry, although its interministerial committee decides upon members are drawn from a variety of trade the work plan, coordinates its execution, and industry organizations. SITPRO's terms ensures appropriate financing, and repre- of reference are to guide, stimulate, and sents Hungarv in international forums. A assist the rationalization of international second executive level includes the secre- trade procedures and the documentation tariat and other auxiliary groups respon- and information flows associated with them sible for the execution of the work plan and and, where appropriate and in consultation providing assistanceto other groups within with the department, to undertake HUNPRO. The third level comprises so- consultancy work in the trade facilitation called EDI forums or EDI clubs in different field in the United Kingdom and other sectors of the economy. countries. The transport EDI forum is the most Unfortunately, HUNGPRO, while active. As one of the first initiatives, MTCW interesting in concept and intent, did not arranged for seminars through which evolve into anything even remotely resem- participants had opportunities to learn the bling SITPRO. Its successor organization, basics of EDI, meet Hungarian software HUNPRO, which the government set up developers and discuss how to take part in during the 1980s, remained ineffective and transport pilot projects. Several such pilot failed to create consensus among govern- projects have started in the field of freight ment institutions and between these and forwarding, trucking, inland waterways the national trade and industry community transport, and railway management. about required actions. An experiment in financial EDI was HUNPRO established links with the launched by the Hungarian bank for ECE. ECE's working party 4 (WP.4) had Foreign Trade (MBK) with two users. This spearheaded efforts to establish the interna- bimodal solution enables those having in- tionally compatible system of EDIFACT, house EDI systems (through a banking EDI which has gradually become the interna- interface) to connect to MBK, but the bank tional system for trade and services related also provides stand-alone software for non- electronic data exchange, despite the earlier EDI users to send structured flat files to existence of competing systems, like the MBK. The national headquarters of customs North American ANSI X.12. HUNPRO are planning to introduce an EDI module in became a member of the Eastern European their new computer system. In early 1995 a EDIFACT Board. But beyond expressing project was launched to create the environ- interest in the EDIFACT system, HUNPRO ment for this under the name EDIFOCUS did little to propagate EDIFACT principles (Electronic Data Interchange for Customs), Ainnexl: The Case Stuidies 53 primarily with bonafide partners entitled to special plans aimed at dissemination and delayed customs payment. The project built training. on two EDIFACT messages-CUSDEC and CUSRES. The data content of the Hungar- DISCUSSION ian versions of ECE's Single Administrative Document (SAD) is taken as the basis for During a workshop organized by a World the subsets. But the acceptance of the new Bank mission in 1995, participants repre- Customs Law, presently under preparation, senting Hungarian trade, industry, and is required for the application of EDI. service communities identified the follow- EDI and EDIFACT standardization in ing conditions for a well-functioning Hungary are the responsibility of the Office national EDI system: of Standardization. Apart from the natural- ization of EDI and EDIFACT related stan- * reliable, competitive, cost-effective tele- dards set by the International Standards communications networks where users Organization (ISO), the office has taken the can choose from a range of solutions; first steps based upon German examples, * secure electronic environment where towards presenting specific EDIFACT business users can communicate without messages as Hungarian standards. The risk to confidentiality and integrity of ambiguity of EDIFACT code lists created proprietary business information; difficulties for initial EDI implementation. * strong and binding intellectual property Consequently, HUNPRO devoted part of its rights for manufacturers and service resources to preparing a Hungarian version providers; of the UN Trade Data Elements Directory * protection of personal data targeted to (UNITDED). More than a simple transla- address legitimate concerns while tion, this includes a thorough analysis of ensuring that EDI achieves the benefits code definitions and related issues by arising from free flow of information; experts from different sectors. * simple, unambiguous, timely telecom- The new HUNPRO holds much promise munications and information technology of success, although many hurdles remain standards set at a truly global level; to be overcome. Infrastructural issues * stable legislative environment attracting appear to ease, as HUNPRO reports data international investment capital to the exchange can now be realized in many telecommunications and information areas through telephone lines, through dial- technology sectors; and up modems at a quality approaching * environment where business takes the European standards. The packet switched lead, and government activities on data network allows direct connections in legislative, regulatory, and institutional packet mode (X.25) and asynchronous fronts are discussed with users, manufac- (X.28) terminal equipment from most turers and service providers. regions of the country through a radial trunk network and the connected local networks. International connections are possible to 27 countries. The digital leased line data network extends transmission possibilities by high quality services, while satellite data telecommunication networks offer special solutions. - - v According to evaluations by HUNPRO's transport forum, the data transmission infrastructure does not impede future development of EDI applications. While these observations may hold true in several respects, there remains continuing need to r entice potential users to participate. HUNPRO is aware of this need and has 54 Information Technology and National Trade Facilitation: Guide to Best Practice MALAYSIA had influenced the appropriate government departments to grant EDI (Malaysia) a 15- Malaysia's industrialization program aims year exclusive license to access trade- to transform the country into a developed related government information, particu- nation by the year 2020. In 1983, manufac- larly customs information. However, the tured exports totaled 30 percent of total agreement remained confidential until such Malaysian exports; 10 years later the figure time as the sponsors of EDI (Malaysia) had was 74 percent; and by the year 2000 it is their investors and funding in place. expected that this figure will exceed 80 Naturally, when the announcement was percent of the total. In part this achieve- made, under the auspices of the EDI Imple- ment results from a national strategy which mentation and Coordination Committee in saw the establishment of an Export Promo- 1993, it caused a certain amount of conflict tion Council (EPC) in the mid 1980s. in the marketplace, not least from VANS The role of the EPC was to expand who had already been offering EDI services Malaysia's external trade. The EPC defined for some time. three initiatives as part of its overall strat- By August 1993, the formal launch of egy: institutional development in trade EDI (Malaysia) had taken place, with promotion; export promotion and market- backing from various government depart- ing; and trade facilitation and export ments. They have now installed an INS EDI support. server and switch system. The INS system In 1986 EPC oversaw the establishment is a cut-down version of the public system of the National Trade Facilitation Commit- operated by INS in the United Kingdom, tee (NTFC), whose mission was to help which supported over 5,000 U.K. EDI users simplify the paperwork involved in inter- at that time. national trade. NTFC adopted the Aligned EDI (Malaysia) also offer the INS trans- Documentation System (ADS) as the lation software products. Malaysian model. ADS is a paper-overlay system designed by SITPRO (Simplified CURRENT STATUS International Trade Procedures Board), a one-time U.K. Department of Trade and The EDI (Malaysia) service is called Industry initiative. Dagang*Net (Trade*Net in Bumiputra). By The ADS system had been widely December 1994, they had around 100 adopted during the 1970s and the early employees and 100 customers, including 30 1980s. It was credited with being one of the customs brokers and agents, sending 500 major influencers of EDIFACT standards declarations a day to Malaysian Customs. and its predecessors. Indeed the first Start up capital was RR54 million EDIFACT secretariat was housed at (US$20 million), fully paid up. They esti- SITPRO; and SITPRO's Chief Executive, mate the split of their costs is 20 to 25 Ray Walker, is now Chairman of the UN- percent technology, the remainder being EDIFACT board. spent on awareness, education and promo- The ADS system never took off in tion. Malaysia, because by the time it was They have now started to resell the GEIS introduced EDI had started its remorseless service and a range of other software international assault on paper systems. The products; they have also introduced an promoters of ADS, who had by this time electronic mail and bulletin board service. formed a company, EDI (Malaysia) Sdn. It is likely that they will soon announce Bhd., became promoters of EDI. In time, access to information services. they were able to recruit major investors, Dagang*Net have pilot EDI communities including Tabung Haji, the Malaysian in the Port Klang community, involving Muslim Pilgrims Fund, Time Engineering, a customs import and export declarations, major electronics and telecommunications which will, in turn, involve the port author- company and the Malaysian chapter of the ity, customs, exporters, importers, forward- International Chamber of Commerce ing agents, shipping agents, hauliers, (National Chamber of Commerce, or NCC). container handlers, and banks. They are By this time, around 1991, the investors also involved in textile quota and license Annexl: The Case Studies 55 administration applications with the spend valuable time and resources in Ministry of International Trade and Indus- supporting this vital infrastructure which is try (MITI). A further initiative concerns the not of commercial value, forcing them into use of the UN-EDIFACT SANCRT, or selling other products and services, and Sanitation Certificate, for veterinary and pushing them into other, more competitive health approvals for the import and export markets in an effort to generate revenue for of livestock, particularly halal certificates. this start-up phase. Further pilots are taking place with the EDI (Malaysia) currently do much of the port of Johor. standards setting for Malaysia, and provide Other ports and airport EDI applications people who sit on the various committees are planned as are financial EDI and a set up for national EDI implementation. range of nongovernment EDI services. The cost of this privileged access could well They are certifying a number of local prove insupportable; the start-up technol- systems integrators to help with enabling ogy costs were around US$ 2.5 million; and selling. annual staff and running costs are in the GEIS reseller arrangements mean that order of US$ 15 million. It could well take they can begin to offer international gate- five to seven years before annual revenues ways. They also plan to offer SITA connec- reach that level. tivity services for the airline community. Customs have still not adopted EDI techniques; they are not yet technically EXPERIENCE capable of doing so. The best they can do is to receive a flat file and print it out on their In some areas, the experience of EDI (Ma- premises. EDI (Malaysia) staff then take the laysia) illustrates how not to go about printout and walk it through the fast track establishing a national trade facilitation approval process. This is partly because of initiative. It was established under the the computer vendor's agent who supplies sponsorship of a small number of govern- customs' systems. The EDI initiative threat- ment departments in a climate guaranteed ened his source of revenue to such an to induce hostility and noncooperation extent that he lobbied internally within from competitors (and the competitors' customs to try and ensure a minimum clients). Private sector funding subsidizes compliance and to delay full EDI imple- all awareness, education and training, mentation. which implies that EDI (Malaysia) will, in Even though the EDI (Malaysia) system time, only be able to address potentially has reduced approval times by as much as profitable or short term revenue clients, 70 percent, this is still not good enough thereby ignoring many who can have more when compared to the general experience impact on the national objectives of trade of reductions from to days to 10 to 15 facilitation. minutes. While educating their potential client At the moment there is no automated base they are simultaneously having to Malaysian inter-bank clearing system so educate the government in order to per- that traders will need to open special suade them to take the necessary steps to accounts for direct entry duty payments. ensure the success of EDI. By now the Except for faster payment clearance, this is government has enacted legislation to not a benefit at all. Also, it only benefits change the Evidence Act, has changed the traders who are not regular customs clients; Customs Act and has amended the Penal regulars normally obtain clearance on check Code to bring them into line with the presentation. Bank Negara, the Malaysian requirements of EDI. The Companies Act central bank, holds a watching brief on the has also been amended to allow the storage need for a national automated clearing of electronic documents for audit and house service. presentation purposes. In time, these changes may be integrated into an all DiscUSSION encompassing EDI legislation not unlike what has taken place in South Korea. The private sector has very little power or In the meantime, EDI (Malaysia) have to influence in shaping the direction of a 56 Information Technology and National Trade Facilitation: Guide to Best Practice national initiative unless it has sufficient MEXICO resources to force compliance. Also, it must have a vision which successfully combines From the perspective of electronic com- national good with its own ambitions. EDI merce, Mexico is the Southern equivalent of (Malaysia) seems to have neither the Canada, their partners in NAFTA. The resources, nor the vision. The danger it overwhelming technological and commer- poses to a national initiative is that as a cial influence is the U.S; 60 percent of all private partner it may become tempted to Mexican exports go to the United States. adjust pricing to a noncompetitive or Mexican practice is much closer to the U.S. predatory level for its own survival, and ANSI standards than the global thereby endangering the larger national EDIFACT movement. good. At the same time, local business EDI has been in active use in Mexico for practices and the existing interaction several years, and has been dedicated between the public and the private sector almost entirely to North American hubs in have not prepared anyone for the sophisti- industry-specific implementations, such as cated and synergistic relationship required retail and textile manufacturing. for this initiative. EDI in Mexico, like bar coding in To make matters worse, at first analysis Mexico, is a hybrid. The Mexican EAN it looks as though EDI (Malaysia) has been organization, AMECOP, promotes UPC, the underfunded by at least US$ 50 million if it United States version of EAN numbering. is to perform its true function; and even UPC has the same code structure as EAN, that figuie is based on the assumption that but the first two digits which represent government departments and other institu- country codes are absent. This means that tions make their own contributions by way the United States is implied in a UPC code; of staff and resources. and Mexico is treated as a virtual U.S. state Probably the most important missing by UPC. ingredient in Malaysia was awareness of AMECOP also promotes ANSI X.12 as the potential of EDI. Neither the govern- the national Mexican standard. It would ment, nor EDI (Malaysia) seemed to be have been difficult for them to choose any fully aware of what they were getting into. other course, bearing in mind the over- Finally, although it has not yet emerged whelming presence of their North Ameri- as an issue, the widespread substitution of can trading partners, and of course the Bumiputra for English is now being re- advent of NAFTA. versed due to a reluctant political accep- In addition to ANSI X.12, AMECOP tance of the predominance of English in promotes and supports derivatives and international trade. A generation of Malay- subsets of ANSI X.12, such as UCS (Univer- sians may be handicapped as a result, a sal Communication System) and VICS problem which may creep through to (Voluntary Industry Communications influence EDI acceptance in Malaysia. System) for the retail supply chain. VANS presently offering their service in Mexico include IBM Advantis, Sterling, GEIS, AT&T, and MCI/BT. A wide range of translation software products are supported by these VANS and increasingly by third parties. The main user groups include the health sector for pharmaceuticals and hospital supplies; the auto manufacturing industry and its supply infrastructure; textile manu- facturing, apparel manufacturers and department stores; and grocery and super- market industries. Telecommunications are deregulated in Mexico hence there is a truly competitive VAN infrastructure. Annexl: The Case Stutdies 57 AMECOP is the de facto EDI associa- beginning to make noises about financial tion. It employs EDI consultants and issues EDI but, being nationalized institutions, are guidelines and general communications on unlikely to take a very aggressive position. the subject. The EAN chief executive chairs Meanwhile the government is grappling a national EDI committee, which also with an economy in crisis. Many govern- includes representatives from a wide ment departments are in a state of flux, spectrum of industries such as pharmaceu- with significant personnel changes and the ticals, oil and gas, manufacturing, textiles, loss of a body of knowledge acquired over department stores, and now the govern- many years. ment. Presently there is no active work taking place on EDIFACT message stan- DISCUSSION dards for trade facilitation. Other representatives on the national At this stage electronic commerce in Mexico EDI committee include peak industry may be regarded as an extension of North bodies from the auto manufacturing indus- American practice and technology. Even so, try and the NCC. EAN itself now has 9,500 there are issues to be faced, apart from a members eight years after its establishment rapprochement between the public and the in Mexico. private sectors in order to articulate a national agenda or vision statement. In CURRENT STATUS addition, the government has to come to terms with the potential disintermediation There are 700 EDI users in various indus- of an extensive small to medium enterprise tries, particularly in the pharmaceuticals sector, comprising at least 600,000 enter- and health sector, oil and gas, the retail prises. Not only does government have to supply chain and general manufacturing. identify and absorb the potential of elec- There is no specific law for electronic tronic commerce, it has then to derive a commerce and no regulations regarding the strategy to ensure the participation of these tax status of electronic invoices. Discus- smaller organizations or to prepare for their sions are just about to commence with the ultimate disintermediation. government and the EAN-National EDI The conflict between the public and the Committee on these topics and that of private sectors cannot be underestimated. It national trade facilitation. is unlikely that under the present circum- There are hereditary cultural problems stances a planned or even publicly-sup- regarding relationships between the public ported growth of electronic commerce will and the private sectors. For example, the take place. It is likely that private market government still insists that the private forces will prevail and with it the growth of sector must prove the legality of any new conflicting standards and competing VANs. initiative, including EDI, of which the government appears to have become aware only recently. It was repeatedly stated that whenever the government senses a departure from traditional business practices, it attempts to gain control and regulate that new practice, which causes pioneering users of new techniques and technologies to become secretive and to distance themselves from - 7 disclosures to the government. EDI and electronic commerce appear to be a classic 73 case of hiding a new development in full view of the government. However, the EAN-National EDI Com- mittee are at the moment involving the government and may even conclude a partnership with them. The banks are 58 Information Technology and National Trade Facilitation: Gulide to Best Practice NEW ZEALAND The benefits to end users are generally confined to faster clearances. Integration In the 1970s, New Zealand Customs devel- with other government departments and oped their own automated clearance system most traders has not yet been achieved. based on paper input from traders. At the Lack of leadership, high costs of implemen- time the system was regarded as a world tation, and lack of an adequate EDI technol- leader in functionality. During the late ogy infrastructure, have all contributed to 1980s an automated, paperless import this situation. The economics of the small clearance system was added. Originally New Zealand market place have not en- called ICCS, it later embraced UN- couraged the necessary infrastructure to EDIFACT syntax and emerged as an EDI develop. based system called CEDI*FIT (Customs EDI for Import Transactions). In March 1995, this system, which had fallen into some disuse and had foundered F -,,", through lack of development was upgraded to full UN-EDIFACT current message status (CUSDEC). Previously, every EDI entry had to be converted to paper for local customs office and other government agency action. The aim is now to operate a completely ' paperless system. In May 1995, out of a total of around 260 customs brokers, 184 were using EDI for import clearances. The majority are ex- pected to migrate to CUSDEC. Export EDI clearances will not follow for SINGAPORE at least two, and possibly four years. Much of the supporting transport and trader Singapore Network Services (SNS) are an infrastructure has still to take up EDI with extremely well-documented company. They any enthusiasm. have attracted two Harvard studies. They The New Zealand government has evolved from a National Computer Board adopted an even more hands off approach (NCB) research project which began with than Australia, although in the early days five people in December 1986. The initial of the customs EDI project senior customs preparation stage lasted 18 months. The management were enthusiastic advocates. primary objective for the project was to Numerous government departments boost Singapore's competitive status in the now espouse EDI for trade facilitation but world market. Trade was selected as the offer no leadership. The local EDI associa- target for EDI; a natural choice, bearing in tion (EDIANZ) operate solely on a volun- mind Singapore's entrep6t activity and tary basis; their hands are tied due to ambitions. By March 1988, NCB had chosen funding limitations. to offer the service on an IBM 3090-MVS The method customs use to offer EDI using the "Tampa Engine", which is basi- services is to totally subcontract all process- cally the software which IBM use to run ing, implementation, training and ramp up their International Information Network facilities to the VAN. For the first three (IIN). This service, including EDI, is now years GEIS was the contractor, before a offered by a joint venture between IBM and retendering at the end of the contract Sears, and is known as Advantis. period. The contract was then awarded to The Tradenet service was inaugurated AT&T, through their local reseller, Netway. on January 1, 1988, with a pilot group of 50 Customs pay a monthly fee to the VAN companies, including traders, customs as do all end users. End users pay market agents and the Trade Development Board rates for all other products and services. (TDB), which handles much of the statisti- They also pay an EDI clearance fee to cal and licensing work traditionally per- customs. formed by customs in other countries. SNS Annexl: The Case Stuidies 59 was incorporated to manage and operate EDI service bureaus. At one stage there the Tradenet service. were 10 of these bureaus but their num- The basic purpose of Tradenet is to bers are decreasing as more traders install enable a trader to make an electronic their own computers. SNS now have declaration of imports and exports direct 12,000 users but probably only 50 percent from his own computer, typically but not are EDI users (of whom less than 3,000 are exclusively a PC. The declaration is trans- traders), the remainder are users of mitted, using EDI techniques, to the TDB, electronic mail, information services and who issue the appropriate approvals within bulletin boards as well as a range of new 15 minutes, after routing details to various services designed for healthcare, legal other government departments, depending systems, electronics, manufacturing, retail on the goods. As many as 20 controlling and distribution, and so on. agencies may be involved. On receipt of the EDI delivered approval the trader prints it CURRENT STATUS off and signs it to obtain release of the cargo. SNS claim to have broken even in year End user software was developed by three (1991-92) of operation. They now SNS and is offered through a cadre of have an IBM 9000 installed, three RS-6000 approved Singaporean software houses. and four Digital Vax machines. They Software not developed by SNS requires employ 200 people; the average burdened certification by SNS, which costs S$10,000 salary for a Singaporean IT professional is or around US$6,000. in the order of S$250,00 per annum. Of End user benefits include 20 to 30 their 12,000 users, 70 percent of revenue is percent productivity improvements and derived from the higher value-added cost reductions by as much as 50 percent. services of EDI. They are now installing Traders no longer have to make personal several exported versions of their service trips to obtain approvals; repeat trips to in such countries as China, India, resolve errors or disputes now hardly ever Mauritius, Canada, Silicon Valley-USA, occur, which has enabled them to reduce Vietnam, Malaysia and the Philippines. their labor force. Many of these installations are actually Storage of goods awaiting clearance is joint ventures with government depart- no longer necessary. Goods may now go ments, such as Mauritius Network Ser- straight to the consignee from the cargo vices or with commercial enterprises such vessel. This is a particularly important as Ayala in the Philippines. benefit to Singapore, where space is at an Singapore opted for EDIFACT stan- absolute premium. The flow of goods has dards well before any EDIFACT messages been expedited even further by the Port of had been approved. They developed their Singapore Authority's (PSA) own port, own proprietary messages, based on container and real time vessel management EDIFACT syntax. They have yet to con- system. It is claimed that ships can now be vert to United Nations Standard Messages turned around in less than 10 hours which (UNSM) such as CUSDEC. Singaporean offers a considerable improvement in users are not involved in standards utilization of port and harbor facilities. EDI development; Tradenet does it all for preclearance has added to these extra them. efficiencies to help make the PSA possibly By now SNS may be handling as many the most efficient port in the world. These as 10,000 declarations a day, each of "trade center management" efficiencies around 700 characters, charged at S$0.50 have been valued by the Singapore govern- (US$0.35) per thousand characters, plus ment as being worth in excess of S$1 billion S$6.00 (US$4.50) per declaration. annually, or around US$700 million. In 1994 SNS have embarked on a very aggres- this was worth more than 1 percent of sive international marketing campaign Singapore's GDP and around 0.4 percent of with particular emphasis on joint ven- total external trade. tures. Their home market is already SNS helped noncomputer users by reaching maturity, especially for the setting up a number of service centers, or higher revenue earning services, so they 60 Information Technology and Nationial Trade Facilitation: Gnide to Best Practice need new services and to add value to only around S$3 million and that they existing services. In addition to multimedia broke even in their third year of operation. services for home and education purposes, In 1993, Tradenet management were quoted real time EDI is likely to be high on the as saying "We have been profitable since agenda. For all their success, the Tradenet our second year of operation. Revenues service is still only a batch-oriented store- grew from (about) S$4 million in 1989 to and-forward service. In fairness, all of the more than S$20 million, with profits of other generic EDI services in the world are S$3.2 million in 1992. We have no debt; our also batch oriented, although not all are paid up capital was financed from funds store-and-forward; some are X.400 based. provided by our owning boards." If SNS decide to introduce a real time Another published source mentioned EDI service-and they have already dem- that the investment in technology, includ- onstrated a prototype-they will once again ing hardware, software, IBM consultancy be pushing the standards and performance assistance and development came to US$20 envelope. Real time EDI will need real time million. Around 250,000 lines of COBOL standards which is a significantly greater was developed for the initial installation. challenge to end user and server systems Even if technology was assessed at 30 than batch operations. It will probably also percent of the total investment, this would need to be Unix and X.400 based to con- raise the project cost to around US$75 form with the direction that SNS are pro- million or S$100 million. Perhaps, like moting to their overseas system purchasers. TradeVan, the efforts of the other participat- Such a set of changes will require renewed ing bodies such as NCB, PSA and govern- commitment to technical pioneering, ment departments have not been counted. especially since their competitors in Taiwan In fact, they do not even appear to have (China) and Korea are already part way been acknowledged. down this path. There is no doubt that technology SNS are now psomoting access to investment can be a much smaller compo- Tradenet through communication nodes in nent today. Companies like SNS, INS, GEIS Malaysia, and through connections facili- and Tandem now have a range of products tated by exported systems to countries such that eliminates much of the need for pio- as Mauritius. Experience suggests that such neering effort. But each country has its own international traffic peaks at 10 percent of unique characteristics. It is hardly likely transactions and 15 to 17.5 percent of that any product can be installed as a "plug revenue, a useful addition to domestic in and go" system. The capital cost must be revenue if support costs can be contained. assessed realistically and efforts to custom- ize systems for local adoption must be THE SNS BUSINESS CASE properly counted. The proportion of expenditure between SNS have demonstrated great success in the technology and awareness, promotion and application of EDI to trade facilitation. In education has still not been seriously particular, they are illustrating where challenged, be it 30:70 or 20:80. The overall national benefits lie for newer entrants. But scale of costs for the complete task also how truly replicable is the SNS experience? seems to be confirmed as being within the What are the levels of costs and benefits range US$50 million to US$100 million. that might be expected from an endeavor such as SNS in isolation from the special SNS RUNNING COSTS Singapore factors which command the cooperation of everyone and ensure that At the end of December 1994, SNS em- only success is publicized? ployed 200 people. The average burdened In 1988, when SNS was just being salary per head for the caliber of staff planned, a government spokesman was needed for SNS at the time averaged reported as saying that a financial payback S$250,000 per annum. A total cost of around for the Tradenet service would "take many S$50 million is indicated by these costs. The years". In 1991, the CEO of Tradenet stated 1994 industry norms suggest a turnover per that technology investment in Tradenet was head of around US$250,000, or S$350,000, Annexl: The Case Studies 61 inferring a budgeted turnover for SNS of businesses are much more complaisant than S$70 million with present headcount at their counterparts elsewhere; the economic normal commercial standards. health of the republic, and by inference its The majority of network revenue would traders, is of paramount concern. As a probably be earned by Tradenet, which is consequence, if a government announce- indicated to total S$6.40 per declaration, ment promotes a new efficiency initiative, it 10,000 declarations a day giving a revenue will be taken up without opposition, and in the region of S$15 million a year. Normal quickly. Singaporeans traditionally expect, EDI applications and less well-paying and rightly so, that their government has messaging applications are likely to earn no thought through any commercial implica- more than S$1,000 to S$2,000 for each tions, and that the new initiative will be of customer each year, a range of S$9 million benefit to all. to S$18 million for a probable network sales While this is fine for Singapore, who total of around S$40 million per annum. long ago shared their national vision with Consultancy and software sales, bolstered every citizen, it is less likely to work by export sales may stretch the total to S$50 elsewhere. Most countries have not articu- million (US$38 million). However, when lated a set of national goals and persuaded compared to other VANs in the field and their businesses and citizens to sign off on market pricing levels, the SNS business them. The type of uncritical acceptance of plan model would appear to work only in a government initiatives which is the norm in noncompetitive or highly protected busi- Singapore is most unusual elsewhere. ness environment, or with subsidies. The technology and business skills To take one item: before Tradenet, infrastructure, and the general level of exporters and importers paid TDB S$6 per education in Singapore are all more condu- declaration; now they pay that S$6 to SNS. cive to the success of a technology initia- A revenue gift, or subsidy, of such propor- tive. At the same time, the regulated nature tions is an extremely generous act, but it is of State enterprises does not encourage hardly likely to be duplicated elsewhere. much in the way of funding for competi- Now that SNS are operating with a tion, nor for competition with government Malaysian partner, the effect of SNS pricing enterprises as part of the business mindset. strategies on the nascent, local competition On balance, the SNS experience is is becoming evident. It has been claimed invaluable, but for a series of local special that the prices which SNS charge Malaysian factors it is unlikely to be repeatable else- businesses amount to unfair competition where. This is matter for concern, because and dumping. The truth of the matter is there are evidently many government that SNS prices are lower than what a local agencies around the world who believe that commercial start up can maintain. they can repeat the Singapore experience by At one time it was widely rumored that buying their hardware and software. This the Singaporean government was going to approach may make start up cheaper, but make EDI mandatory for trade declara- only for that proportion of the task that is tions. Legislation did not prove to be technology dependent. And even the necessary; a combination of enlightened cheaper technology will only work prop- self-interest and statements from TDB that erly if all of the preparation work has been paper declarations would not be accepted completed. after a certain date ensured over 95 percent compliance. Paper is still handled by the service centers on behalf of smaller, r - nonautomated traders; it is still used for declaring personal effects, for vessel provi- sioning and numerous other specialized imports and exports. -'-* BUSINESS AND CULTURAL FACTORS There is little doubt that in Singapore, 62 Information Technology and National Trade Facilitation: Guiide to Best Practice TAIWAN (CHINA) law, promulgation of automated cargo clearance regulations, and promulgation of TradeVan was initiated in 1989 following a TradeVan's service agreement. period of research by the Institute of Implementation included a review of Information Industry (III). Start up capital customs processes, significant redesign, was provided by the Ministry of Finance substitution of vital data with UN- (MOF) and set at NT$2.1 billion (US$85 EDIFACT messages and redesigned ap- million). The objective for the initiative was proval processes. Presently TradeVan offers to speed up international trade and im- a national packet switched network, central prove the use of airport and harbor facili- or application level translation, mailbox ties. More formally stated, TradeVan's services, various databases, audit trails, and mission was to improve the international a bulletin, board. There are additional competitiveness of Taiwan (China). services in operation, such as message During the initial III stuLdy, it was design, strategy and planning, software recorded that there were 5 million sea and design, training and software certification air declarations recorded in 1988, submitted for EDI. as part of a paper and clerical based clear- ance system. The clearance system involved CURRENT STATUS 222 data entry operators and four divi- sional staff officers. The system demanded By December 1994, TradeVan had around 32 different clearance documents; 4,000 800 users, including 300 customs brokers. customs brokers dealt directly with cus- Over 98 percent of export declarations and toms on a regular basis. Typically it took over 80 percent of import declarations, by two days to clear a declaration, because of volume, were being made by EDI. the bureaucratic process, multiple queues, The number of different types of cus- dense city traffic and the use and manage- toms documents has been reduced from 32 ment of key staff, messengers and couriers. to two: a CUSDEC now takes about 15 Naturally, this process had developed its minutes for approval to be granted for own inevitable cycle and resultant methods shipment release. The number of brokers of working with, and around the system, has been reduced from 4,000 to 1,300. for importers and exporters. It resulted in Customs staff have been reduced by 119 extra labor costs, idle time, unnecessary data entry staff and 41 customs officers. cargo delays, and hence the need for extra However, paper is still required for audit and expensive storage space, which in turn purposes but that now happens after the made physical customs inspections more event, once goods have been released and complex and time consuming. In its turn after duty has been paid. this led to the need for extra customs staff, Ten local software houses have been all of which caused added costs, delays and certified as software vendors to the inefficiencies. TradeVan user community. A typical TradeVan installed a BT-Tandem trade software package from TradeVan or one of facilitation EDI system, the software for the certified vendors can cost between which was developed around a core of US$400 and US$2,000, depending on the Tandem reseller messaging products. Much amount of integration and implementation of the translation and enabling software effort involved. These prices appear to be was developed from scratch with signifi- less than half the corresponding products cant local language capabilities. TradeVan and services in Europe and North America. also initiated the development of a large TradeVan has over 100 staff and receives range of UN-EDIFACT based messages, significant help from III and various minis- starting off with 24 customs related mes- tries. Of the NT$2.1 billion capital allocated sages based on six UN-EDIFACT standard by the MOF, approximately NT$1.5 billion messages, such as CUSDEC, CUSRES, had been spent by December 1994 (US$60 CUSCAR, and so on. million). TradeVan estimates that only 10 to Legislation affecting customs clearance 20 percent of this amount was spent on was amended by the government. Specific technology; the majority was used in re- legislations include: amendment of customs engineering, awareness, promotion and Annexl: The Case Stuidies 63 education. These figures do not include effort was not subscribed to by all govern- investment from other sources such as III, ment departments. Paper is still required other government ministries and the for audit purposes. The development of 24 private sector. Once taken into account, new UN-EDIFACT documents suggests that these investments in training and promo- some existing internal processes were tion sessions and a wide range of meetings simply automated, not reengineered. concerned with implementation, liaison Secondly, because the whole process was and consultation, would significantly underwritten by MOF, it might be that increase the figure of NT$1.5 billion. much of the planning and implementation The government and the banking was not subject to normal commercial industry have also sponsored a financial management control. Although it is difficult EDI initiative for the payment of customs to contest the savings quoted without duties, and at a later stage for full EFT and detailed investigation, it is possible that Remittance Advice processing. A sea cargo other interpretations could be made of the clearance initiative went live in November data. Perhaps significantly, no data on 1994. Other initiatives in the retail industry TradeVan revenue nor tariffs were pro- are being planned. vided. In line with the promised deregulation The key asset of TradeVan, and any and ultimate privatization of the telecom- other national EDI initiative, is the owner- munications sector, it is proposed to ship of exclusive access to customs systems privatize TradeVan in the near future. and data. Might this not be achieved more In November 1994, it was officially equitably by the creation of a customs reported that the TradeVan project had gateway, for example? Once again, the issue already saved the territory over NT$4.3 of the "shared vision", especially with the billion. While details were not provided, it private sector, and with a more active is understood that the figure was adduced involvement of the private sector in the from faster turnaround of vessels, im- planning and implementation, needs to be proved use of storage facilities, reduced addressed. delays, leading to better use of staff, less At the technical level, TradeVan does not lost time and a reduced impact on traffic yet have an international telecommunica- density. The report also drew attention to tions license, nor does it have any intercon- the "green" aspects of the TradeVan initia- nect agreement with other VANS or IVANS. tive: less paper used and reduced fuel Apart from its certified partners, it appears emissions. A "green bonus". to operate as a monopoly service-an anachronism in the context of EDI. SUMMARY TradeVan has also not provided any information on preparatory work that was By any standard this is an impressive required to persuade the government, nor achievement, however, there are other on their sponsors other than MOF. Such aspects to take note of in this program. information will be vital in recording the Firstly, it seems that the reengineering process and in modeling similar efforts elsewhere. 64 Information Technology and National Trade Facilitation: Gutide to Best Practice Annex 2 Implementation Considerations and Time Frames This section describes major activities logging, billing and administration involved in implementing EDI in a functionality; reengineered trade process. It is not * back office software for certain specific intended to be a guide to best practice, application development or application although it contains many of the recom- interfacing; mended elements. * end user translation software at main- The orientation of this annex is prima- frame, mid-range and PC level. rily technical. It assumes that there are no serious barriers to success, that a serious There are no special requirements of IT attempt is being undertaken, that re- professionals involved in these tasks, sources are not an issue, and that the although appropriate education and cooperation of all parties is forthcoming. training in product functionality, EDI Hence, unlike in real life, no compromises functionality and standards, and end user are catered for. application to standards mapping will be The starting point for this review is the needed. project plan. The preparation work to A lead time of six to 12 months would reach this point could well have taken 12 be the typical time to plan and install this to 18 months, although this time should type of system. A small team, comprising a gradually reduce as the overall level of manager, project leader, analyst and experience increases globally. possibly two programmers would form the In fact there are two types of project nucleus of the installation project, al- plan: the first may be applied to the though much of this work could be sub- implementation of the technology chosen, contracted. Annex 3, A Sample Technical on the assumption that a new EDI host is Proposal, gives more details on the tech- to be installed for the purposes of a na- nology. tional EDI initiative. The second may be applied to the end user implementation TRADE FACILITATION: plan for EDI and the reengineered trade EDI PROJECT PLAN information process. The project plan in Annex 2 Figure 1 TECHNOLOGY PROJECT PLAN involves integrating best practice and EDI processes into end user systems. The system will comprise: The decision on precisely which system to reengineer will have been taken at the * conventional mid-range computer executive level. A typical example would hardware; involve export declarations, with the * a form of Unix or similar mid-range objective of replacing paper, simplifying operating systems; processes and speeding up approvals. * communication switch hardware and software, possibly to X.400 specifica- INFORMATION GATHERING tions; * EDI VAN software, providing EDI The first step is to understand the end-to- functionality, mailbox, archiving, end process, the participants' roles, and Annex 2: Implementation Considerations and Time Frames 65 1. DISCOVERY 2. NATIONAL PLAN 3. AWARENESS 4. EDUCATION AND TRAINING 5. PROJECT PLANNING 6. TECHNICAL TRAINING 7. INSTALL TECHNOLOGY 8. END USER AND - I IMPLEMENTATION 9. AUDIT/ REVIEW 10. ROLL OUT Annex 2 Figure 1: Trade Facilitation EDI Life Cycle 66 Information Technology and National Trade Facilitation: Guide to Best Practice the way their systems work. It should be change. Systems reengineering is a widely borne in mind that, although the initial known and discussed set of techniques. The implementation will only affect a few basic principles are: people, say customs and a couple of gov- ernment departments, a small number of * Removal of all duplicated, overlapping brokers and perhaps a major exporter, the and redundant operations and processes system is being designed for the whole from the system. industry. Step one, therefore, is to ensure * Replacement of every item of informa- that the new system is capable of being tion which can be substituted by a code assimilated by the broadest community of or set of codes instead of the full descrip- users. This is an essential difference be- tion. tween designing in-house systems, design- For example: ISO Country Codes, ing products, and adapting systems for such as US instead of the United States, interorganizational use. The last is based, at or BAL for Baltimore. Similar codes exist least to some extent, on compromise; the for currency, weights and units of mea- first two can work to a pre-agreed design sure for a range of industries, for packag- specification. ing and containers, and so on. Naturally, since computers will be doing much of REVERSE ENGINEERING the reading and processing of informa- tion in this reengineered system, the After a suitable period of consultation and main purpose behind code substitution is study it will be possible to identify each to have easier and faster computer step in the process to a fair level of detail. It processing. is necessary to document all exceptions and * Implementing the World Customs processes, to record the time each step Organization (WCO) recommendations takes, and the resources needed to carry it on harmonized systems. In this system, out. This must be done for the complete codes are used for commodity types, end-to-end process, including the broker's product types, and various other catego- feeder systems, customs processing and ries of imports and exports. As customs approval systems, brokers handling of processes around the world adopt these approvals and what happens thereafter to codes, the job of processing clearances ensure that the goods are exported. becomes easier to automate. Each process variant for product or * Implementing an automated computer commodity code, each variant for different approval process and an automated documents or computer system and its excise-tariff allocation and payment interaction with the others, must be docu- system. This will ensure the vast major- mented for later analysis. ity of clearances can be authorized in a It is most important to walk current matter of minutes, and paid for before users through the documented system to the goods are actually physically ready ensure that they agree the system works as to move, thereby assisting capacity described, not as earlier designers have planning and scheduling of scarce said it should work. facilities and capital plant and equip- This process of stripping a system down ment. This in turn leads to further to its bare essentials to examine precisely downstream benefits. how it works is becoming known as reverse * Automating the approvals and informa- engineering. Reverse engineering of a major tion interchange between government system is the natural precursor to departments and other agencies involved reengineering that system. in the import-export process. These might include taxation and excise de- REENGINEERING partments, immigration, agriculture and fisheries, security and drug control When broad agreement has been reached organizations, quota and tariff manage- on the information flow and processes ment agencies, trade development, and employed by the present system, it is time so on. to test the system's capacity to assimilate It is acknowledged that this ideal Annex 2: Implementation Considerations and Time Frames 67 system will involve an enormous message longer, which costs more. amount of nontechnology effort, includ- Electronic mail is the right medium for ing negotiations, compromises and free text; it can be read by both sender probably a staggered implementation and receiver. Electronic mail is also plan spread over two to three years, or considerably cheaper than EDI. It needs even longer in some cases. These com- much less functionality. promises depend almost entirely on local Access to databases for codes and circutmnstances. transport availability, for tariffs, regula- The responsibility to achieve these tions, schedules, and so on should be social and administrative objectives are catered for in the reengineered system largely outside the direct terms of design. Information services on prod- reference of the technologist. The ucts, business opportunities and bulletin broader membership of the task force board services for local variable informa- will have to concern itself with these tion, and fast breaking commercial and issues. They will need to use their transport news should also be included knowledge of local conditions and their in their design. Ultimately multimedia authority to protect the technologists diagrams and graphics of ports and from being drawn into nontechnical harbors, container parks, bay plans and issues. navigational aids, for example, will be The reengineering process, if prop- available over the Internet and various erly staged and negotiated, needs to be other commercial networks. capable of being explained to all con- Bar coding and automatic identity cerned participants in both the public capture have not been traditionally and private sectors, and in turn to other within the ambit of trade facilitation agencies, to overseas trading partners information technology systems design, and to their governments. but the information handling needs of Designing the system so as to maximize goods handling will soon be an integral the use of electronic commerce. This is part of trade facilitation systems, and intended to ensure that all information will need to be incorporated into systems to be transferred between the computers design at some stage. involved in the declaration, processing and approvals system is transferred IMPLEMENTATION electronically in approved UN-EDIFACT standard formats. It is important to make Once the overall systems reengineering and use of UNSMs (United Nations Standard redesign is completed, there remains the Messages) where possible, to avoid specific question of how the new systems, lengthy development times. The use of particularly the electronic exchange of UNSMs also ensures that standard information, are to be integrated with other software translation packages can be systems in the end-to-end process. Many of used without changes. these systems will remain unchanged so A further important point concerns that integration issues take on particular economic use of networks and minimiz- importance for participants. ing end users' network charges. Each Such major changes could be made in electronic message should contain the either a "big bang" fashion or in a series of absolute minimum information needed smaller evolutionary stages. Once again, to convey the precise meaning of the the decision rests largely on local circum- message. For example, do not send stances. In either case, the new systems will postal addresses or product descriptions require an EDI module. where account codes and product codes will serve the same purpose. . Systems interconnection issues. The more It is bad practice to send free text likely case is that EDI functionality needs information within an EDI message. The to be added to existing systems, from a translator will not recognize the free text; customs broker to a customs and govern- it will be ignored or cause a system ment agency gateway system. interrupt. Free text also makes the There is a range of options available 68 Information Teclhnology and National Trade Facilitation: Guiide to Best Practice for retrofitting EDI translation facilities envelopes being wrapped around fields to existing custom-built software and of data, messages, files of messages, and application packages. The principal the complete transmission. These enve- choices are to interface to application lopes are the initial instructions to the systems, or to integrate EDI facilities into interpreting function of the translator, on application systems. the sequence of unpacking and interpre- EDI pilot implementation. The most tation, which must be done in order to technically elegant approach is to inte- format incoming data in exactly the grate EDI functionality into the applica- manner needed for automatic data entry tion in such a way that EDI output is a into the target system. standard option, just like output to a The envelopes also carry within them printer or to fax. Similarly, EDI input can control data, such as addresses, stan- be regarded as a direct data entry option dards type and level, message types, by the system. In the next generation of EDIFACT identifiers and security in- application software packages, EDI will structions. Time and date information become a standard option, as it already is and network identification data are for some major application packages. inserted by the network. EDI functionality is already being * Systems test. Once the translation soft- planned for the major PC-LAN products, ware is installed, and after appropriate such as Microsoft Office, Novell products training courses for technologists and and Lotus Notes. However, for the next end users, the next step is to connect to year or two, EDI implementers will the chosen network and to send and probably need to interface EDI transla- retrieve test messages. tion capability to the application. The software facilities to connect to The simplest method is to generate an EDI network are normally built into an outgoing message from the applica- the translation package (a communica- tion system, say the export declaration, tions script). It may be as simple as and then to transmit a flat file to an clicking on a screen icon. More typically, intermediate storage or processing in production, the network is accessed location. This may go to a directory, a automatically, at preset times of the day ( specific file or even a front end PC. The in the unattended mode). flat file may be an individual transaction Systems testing normally starts or a full file of transactions; the principle independent of trading partners so that is the same. the technology can first be tested, point There is an intermediate process to point. Each system needs to be tested between the flat file and full EDI compli- in this way. Similarly, all systems ant input or output. Commonly called changes need to include this test prior to translation (or interpretation when data issuing to production. is incoming), it involves reformatting After network testing, it is necessary each field in the file in order to map it to to perform an end to end send-and- the chosen EDIFACT message. retrieve test, when the trading partners' A flat file definition needs to be computers each perform a sequence of issued to all developers and system events. operators in the trade processing chain. To begin with, an application gener- This definition, agreed with the transla- ates a flat file, which is then converted to tion software support organization or the UN-EDIFACT format. The translated developers, essentially automates the file is transmitted to the trading mapping process for standards applica- partner's own mailbox (for example, the tion. broker's). Next the translated file is It is typically possible to map an moved to the target mailbox (for ex- outgoing message to a translator in ample, the customs) by the VAN's EDI around two hours for current translation server. The customs retrieve the file from packages. their own mailbox, and it is interpreted, The EDI translation process can then that is the reverse of translation takes take place. It will involve a series of place. The interpreted data is then Annex 2: Implenmentation Considerations and Time Frames 69 automatically read by the customs' adopts a user-based routing approach. This application system. The approval process means that all communication scripts for all is completed, and an export certification networks to be accessed have to be loaded or approval issued by the application into the translation software package. system. Finally, the complete end to end Trading partner tables, or address books, process is then inverted, from the cus- contain details of the particular network toms' to the broker's application system. which each trading partner uses, in addi- This total information flow typically tion to information on message types takes place in a few minutes, with data supported by the exchange, and standards flowing from computer to computer with and standards levels in use for each mes- no intervention except where it is de- sage type. These address books then select signed into the system. the appropriate network and automatically * Audit. Professional staff still need to make the network connections for each audit the transaction log at an early batch of trading partners. stage. Some European taxation authori- All three methods of interconnection are ties have formed specialist teams to help in common use. Selection will depend upon companies properly complete this task. local conditions. Legal and security issues also need to Variants of each approach will also be completed in harmony with the apply to other electronic network services, complete pilot process; nevertheless, it such as the Internet and e-mail. has to be acknowledged that the profes- sions normallv have trouble in meeting TIME FRAMES technologists' time scales, and in keeping up with their innovations. Much of the time involved in a major Legal, audit and security issues are reengineering initiative is taken up with not normally considered to be on the nontechnology issues. These might include critical path for implementation, espe- negotiations, overall project planning, and cially for the early, pilot users. legal, audit and security concerns. The critical path for technology issues in isola- TECHNOLOGY ISSUES tion from the wider plan still depends upon the members of the working party being One further point remains to be made in able to handle the nontechnology issues the context of implementation: this is about within the agreed time frame wherever network interconnection. possible. In a national initiative, the national EDI A fairly small technology team should server will normally facilitate all overseas be able to handle the nucleus of the best and network connections in such a way that practice EDI implementation, supported of a local end user can address any trading course by teams from the organizations partner, or any VAN, anywhere in the involved, initially from the pilot group. An world. For the price of a local call the host ideal number of trading partners comprises will make the interconnect. a group of around six organizations and a In some cases, the networks interconnect working party of perhaps three technolo- between themselves, thereby performing gists and three nontechnologists, who are the same interconnection functions as a there to handle organizational and proce- national service. dural, legal, audit and security issues. In both cases, the trading partner only These are in addition to the representatives needs to subscribe to a single network in from individual trading partners, who order to communicate with all of his should be kept to a minimum at the techni- trading partners, no matter what network cal implementation stage. the trading partners may actually be Thee main stages of the plan are given connected to. There are technical consider- below. The time frames quoted are within ations regarding the audit trail, and also the range of experience to date. They may pricing considerations in this approach but have to be expanded or condensed depend- the interconnect function works. ing on the skill and experience levels of the A third possibility is that an end user trading partners and the technologists. 70 Information Technology and National Trade Facilitation: Gntide to Best Practice Many of these activities will overlap in such a way that the overall time will actually be less than the sum of its parts. Main Project Plan 6-12 months Technology Plan 6-12 months End user EDI Implementation Plan 3 months Reverse Engineering 3-6 months Reengineering 3-6 months Systems Design 1-3 months Implementation 6-9 months Pilot/Test 1 month Audit 1 -3 months Target overall elapsed time from form- ing the working party to completing a successful first stage pilot is in the range 12 to 18 months. Annex 2: Implementation Considerations and Time Frames 71 Annex 3 A Sample Technical Proposal The system which acts as the intermediary . custom-built "back office" software for between a group of users (trading part- special local requirements; ners) and all of the other networks, or * end user translation and EDI manage- VANS, is generally known as an EDI ment software; and server, a VAN or an EDI switch. It per- * a detailed implementation plan for the forms the role of mailbox manager, central central site and the initial users. communications switch and the interface between all external networks necessary The same functionality is required for a specific local EDI and electronic whether the installation is for a large commerce system. The system now gener- corporate, a large government department ally operates on a standards-compliant, or even a moderate sized national service. fault-tolerant hardware platform, and These are increasingly being described as package-based, specific electronic com- "gateways." merce functionality software. A typical technical proposal would DEFINITIONS include: At this stage it is important to know what * a hardware platform, most probably function a gateway, particularly an EDI Unix based; gateway, performs that cannot be done • EDI mailbox software based on X.400, or efficiently in other ways. with a planned migration path to X.400 A large EDI initiative, especially one capabilities; with significant international trade re- * multiple communications options quirements, needs to be able to talk to all (switch software); major VANs, because that is where the End Multiple VAN , User . Subscriptions Trading N Trading Partners , 'N Partners Node Node Node E. - \Network B , - T.WT Network A 1 7 N NetworkC LiC Trading Partners Annex 3 Figure 1: How Networks Inhibit Electronic Commerce 72 Information Technology and National Trade Facilitation: Gtide to Best Practice connections are made to international integrating an organization's internal trading partners. network into a gateway means that the The usual argument is that EDI VANS organization needs only one mailbox on are unable to provide the necessary inter- each appropriate VAN. Once again the connect, or interworking between each argument has validity, but it does not other's networks. While this is now only generally reduce traffic costs, only mailbox partially true, there is still some validity in costs. the argument. But does it really need a So a gateway has a significant role to gateway to solve the problem? (See Annex play in providing a local EDI service, a 3 Figures 1 and 2.) local access to the major international At the local level, VANS find it uneco- networks, and interconnect services, both nomic to provide an interconnection. for technical efficiency and cost savings. However, a local interconnection may be no cheaper in the long run because VANS, REQUIREMENTS in general, charge for their network, even if no value is added. Of course, in some If we therefore take the broadest of current countries, VANS have been forced to requirements, a gateway must provide local interconnects, just to get business; but they rarely volunteer to do * have an internetwork switch; so. Also, even if some VANS do not have * have a range of communications op- local interconnect agreements, they may tions; have them overseas. For example AT&T, a display EDI functionality, including GEIS, BT, IBM and a few others have (corporate) central translation, valida- interconnect agreements in the United tion and compliance checking, trading Kingdom and in the United States. partner enabling tables (as a central or Telecom companies interconnect at the end user option), and security facilities; traffic level too; SWIFT and SITA have a * possess application integration capabil- range of interconnect agreements. But this ity; facility cannot be relied upon for any new * include application development gateway implementation. functions; The second part of that argument goes * be based on the open systems interface that increasing VAN traffic and multiple (OSI) standards (for example, X.400, mail boxes cause costs to escalate, and that X.500, and Unix), embrace all major EDI End Single VAN User Subscription Trading Trading Partners Partners A Node | Node Node / [ -N Network B X Network A \ Network C Trading Partners Annex 3 Figure 2: Gateways or Interworking Annex 3: A Sample Technical Proposal 73 message standards (for example, ANSI when a standard level was changed, in case X12 and UN-EDIFACT) and their major there are messages to or from the same derivatives (VICS, EANCOM, and so on); partner at different levels which are still in * have a range of administration functions, the system, or if there is need to change such as logs, audit trail, billing, reports, VANS connections at any time. However, and so on; this level of functionality is ideally con- * support other media and other data tained in the end user's own system. services than just EDI, such as file The gateway would also need to be able transfer, mail, fax, voice, value added to validate a trading partner number prior mail, fax and voice, and increasingly toeach transmission. In some countries, scanning and imaging applications, where EDIPOST is used for true EDI, the perhaps even audio and video gateway can assign a "dead letter" mailbox conferencing. number to an otherwise invalid combina- tion for onward transmission of hard copy FUNCTIONS and fax. If the gateway is being used as a central An EDI gateway, therefore, must be able to translator, it would need to apply a sepa- handle access to any network or direct links rate logic stream to confirm that the transla- with trading partners. Normally, asynchro- tion (or interpretation) of a particular nous access over a PSTN from a PC is the message set from a particular standards is simplest means of satisfying this require- called for. In addition, it would need to ment, even if the PC has to act as the front support all supersets and subsets of stan- end to the host processor. Providing the dards (message sets) used, or likely to be host processor has an operating system used, by trading partners. with PC support, the front end communica- At the enhanced functionality level, the tions switch would merely send and receive gateway may act as a platform for other flat files from the host. Most EDI users, communications services, such as X.400 probably over 90 percent, are satisfied with store-and-forward products, any mail, fax, this approach. The front end may also need and enhanced fax, digitized voice services, to access the packet switched network and X.500 services. The session protocol for (X.25), or satisfy a range of proprietary future EDI data transfer is likely to be protocols. Very high volumes can justify X.400, while X.500 may become the stan- dedicated digital services, but that level of dard vehicle for trading partner tables. functionality is only genuinely needed by a Some gateways have applications for small number of installations. However, specific functions. For example, user issues of reliability and security may billing, log, audit trail tracking and tracing override such economic issues. software, statistics, and so on. In one case The switch function can also vary in this included "opening" X.400 envelopes, sophistication. Externally, the switch will matching and merging data, and then log on to each VAN in turn, retrieve mail- reenveloping. box contents and then deliver a translated file. Note that ANSI X12 and UN-EDIFACT GATEWAY SERVICES message standards also have the ability to contain internal network addresses. This In general VANS are withdrawing from function is not exclusive to an application providing EDI end user services. Increas- system, host or front end system. ingly, either directly or through a third The processing functionality of the party, the gateway provider provides gateway could include trading partner support for the education function right tables, which contain details of electronic through to implementation, maintenance (VAN) addresses, fax and phone numbers, and the help desk. Where a particular VAN EDI document types, physical document has a turnkey arrangement with the gate- types, message standards and standard way organization, it will almost certainly levels, and security information. The user support only its own products and services. may also wish to maintain history files on However, there are several good products some of these fields. For example, exactly which are VAN independent, including 74 Information Technology and National Trade Facilitation: Gufide to Best Practice many of the better education courses, and and to set up appropriate security proce- ramp up or roll out programs which are dures: allocate keys, and manage key offered by third parties. rotation. The necessary level of end user support At the production stage it will be neces- is not likely to be available from VANS for sary to set up and manage a help desk, all end users, hence whoever takes on the make arrangements for "out of hours" gateway approach also takes on the end working (the overseas EDI partners could user support tasks. well be as much as 18 hours out of time synch); provide remote diagnostics and EDI GATEWAY AND SERVICE appropriate support; provide ongoing EDI FUNCTIONALITY audit and QA services, monitor usage and statistics, logs, audit trail, billing services, Looking at the complete life cycle of an EDI monitor security, password use, EDI trans- project, and bearing in mind the need to be lation standards support, levels support, self-sufficient, fully supported EDI end integrated EDI application support and users who are independent of VANs and maintenance, and trading partner table their products, desirable functionality at maintenance. the preinstallation stage would include Ongoing services will include develop- services such as cost benefit studies, EDI ment and maintenance of application capability and preparedness exercises, and interfaces: "hooks" for integrating EDI with EDI audits; education, training and updat- applications; and management of priority ing services; functionality studies on EDI EDI streams and priority allocation, while software products (to validate the product facilitating interactive EDI processing for internal and external network use); and where possible. other appropriate support services for User connectivity would include PSTN, existing and future EDI trading partners. LAN (IEEE 802.3), LAN variants, X.25, SNA At the installation stage the require- and variants, X.400 and X.435, FTPs, propri- ments would be to set up users, provide etary protocols, input from protocol con- integration services and create, and main- verters, and VAN connections. tain documentation (this may involve The EDI gateway will ultimately need to removing function from a host processor, connect to other communities, including followed by repair, remodelling and maybe enterprises, industries, government sys- systems reengineering); to establish busi- tems, VANS and IVANS. Such VAN and ness partners and trading relationship community connectivity efforts would tables; to allocate and manage passwords; include custom built VAN pipes, X.400 domains, mail and fax services, network session protocols, intercorporate VOICE GATEWAYS (intraindustry) switches, a national or In the 1920s, someone predicted that by international switch for specific, nonVAN around 1980 one quarter of the world's popu- connections, and an interVAN switch. lation (around 1 billion people) would need to become telephone operators if it was to VENDORS keep up with the demand by then. This was clearly tongue in cheek, but it actually came There are four main groups of vendors who to pass, although not in the manner implied. can offer the major components of a corpo- Today everyone can dial direct, hold calls, rate EDI gateway: hardware vendors, divert calls, and perform many other func- software vendors, telcos or VANS, and tions from a single telephone handset, in ef- consultancies. This does not necessarily fect doing the task of a telephone operator. The corporate voice switch too has pro- include all of the communications options. gressed from a manual exchange, to PABX, to Where an enterprise is considering a automated PABX, to intelligent exchanges, to gateway there is usually no alternative to intelligent networks, to new technology the RFI-RFP route. This may not achieve the centrex, and will soon become automated in- best results since many of the more experi- telligent network centrex services. enced vendors either have no direct local The switch is evolving into the network. representation or their centres of expertise Annex 3: A Sample Technical Proposal 75 data application to EDI is taking far too DATA SWITCHES long to implement between enterprises. To Data switches first appeared in the late 1950s long toe b etwee terpries in support of what we now call Local Area rathbnits of mutero com e Networks, by means of an in-host control- communications we must become more ler. Modems and multiplexers were followed flexible in our choice of the medium. by dedicated communication controllers, Hence, in addition to EDI, we need: supporting Wide Area Networks (telepro- cessing). Intelligent controllers, capable of * EDI to fax: fax to EDI handling more than one protocol and large * EDI to hard copy: hard copy to EDI networks, comprised of subcontrollers, (print) reached the market by the early 1980s. These * EDI to Telex: Telex to EDI (including use have been followed by front end network of Telex to fax services) controller hierarchies, access nodes, bridges, * EDI to digital voice: digital voice to EDI routers, and so on. * EDI to imgeia g e to EDI Very intelligent versions of these devices * EDI to image: image to EDI now totally insulate host processors and data base machines from the networks. It is inappropriate to detail the actual And soon, the public network may be technologies here, but they are feasible. For able to perform that function in a data- example, there are six voice technologies centrex, intelligent VPN controller. which are suitable in some measure. ICR (Intelligent Character Recognition) is also being used for the purpose. X.400 offers are based overseas. A do-it-yourself ap- some facilities in this area. In addition to proach, on the other hand, is slow, prone to EDI and file transfer applications, it will failure, and expensive (see Annex 3 Figure soon support technical document inter- 3). Under those circumstances, it is always change, voice mail interchange (X.440) and best to defer until the right product is image document interchange. available. X.400 and X.500 philosophies are likely to become the keystones for integrated OTHER MEDIA platforms for the exchange of all electronic business information. Evidently, the change from conventional Although it is difficult to recommend Technical Services End User Connectivity PSTN, LANS, X.25, SNA, * User Agents X.400, X.435, FTP, * Tables Proprietary, etc. * Translation/ Interpretation EDI Functionality Production Services * Standards Extra Functionality _ * Password *Security - w X.400/ X.500 Products UsagerStats f Enhanced Voice Logs/ Audit • nhanced Fax Trails * Enhanced Mail * Billing Support Services * Imaging Services Services - -- * Interactive Media (Revenue Collection) * EDI Audit External Connectivity CRemote * Help Desk -- * Consulting End User lus: Diagnostics * Roll Out ~ ~ En Usr,pls *Priority/ * Roll Out X.400, NIW Session Interactive EDI * Education VAN, IVAN, - * QA Services Other Services Annex 3 Figure 3: The Gateway Service 76 Information Technology and National Trade Facilitation: Guide to Best Practice specific choices in a rapidly evolving * cellular data network; market, it is possible to provide an insight into a fully specified gateway of the future as well as output by conventional EDI, and a migration path from where systems hard copy and any other input option. currently stand. The range is enormous: from PC to fault-tolerant mainframe; from SUMMARY EDI-specific, to an EDI gateway service, to a full electronic services platform. There is While the technical specifications for a no single definitive solution, as indicated gateway may look new and unconventional by the variety of vendors in this very new to an MIS professional who is used to marketplace. serving his internal client base, there is much precedent for successful implementa- A MODEL FOR A GATEWAY-ROLLOUT tions. However the operational success SERVICE depends much more on a service bureau, customer-oriented approach than the in- The (Hong Kong) Tradelink CAS and other house MIS philosophy. This change to a Asian requirements (see Annex 1), and more market driven environment often various national EDIPOST experiences, provides a challenge to the mature MIS have now made it possible to define what a organizational professional. mixed technology input-output gateway It should also be remembered that the service will look like. It will include all gateway installation represents only 5 to 15 support and production services identified percent of total investment. Many of the earlier, plus a full X.400-X.500 gateway, other costs are absorbed by the private with comprehensive access and intercon- sector and other public sector organiza- nections, plus end user facilities for input tions, and by a multitude of volunteers. by: They require a different form of support. This attitude of cooperation is further * business systems; extended by the need for active marketing - walk in EDI bureau; and marketing management, rapid and - telex; flexible response to external customers and * fax; customers on other networks, and the - voice; overriding need to meet local business and - EPOS; strategic objectives. - OCR-MICR; Technology is relegated to the role of the - intelligent fax; servant of electronic commerce; and elec- - intelligent character recognition; tronic commerce users have a voice: they - custom-built EDI terminal; expect to be heard. Technology is therefore * radio frequency device; the least of the challenges in this milieu. Annex 3: A Sample Technical Proposal 77 Annex 4 Sample Terms of Referencefor Electronic Trade Facilitation System, Implementation, Supervision, and Mid-term Review These Ternms of Reference, woith modifications, lhavye beeni utsed in a World Bank Technical Assistance to Enhance Competitiveness Project in Maturitiuis. Thle overall objective of tlhe project is to help enihance export competitiveness byfacilitatinig private sector acess to techniology suipport services. BACKGROUND reengineering practices to sea cargo procedures, air cargo procedures, govern- The Ministry of Finance has initiated an ment department procedures, and banking institutional improvement program to procedures. These Task Groups report to a improve the competitiveness of the trading Technical Committee, which in turn sector, speed up the process of trade reports to a Steering Committee chaired by documentation clearance, and streamline the Financial Secretary of the Ministry of critical procedural and operational areas in Finance. import and export documentation. This Tradenet is being established under a reform will culminate with the establish- joint-venture arrangement between the ment of a new Tradenet system. Government of Mauritius and Singapore The principal aim of Tradenet is to Network Services (SNS). While the deci- utilize trade databases and EDI for elec- sion of the Ministry of Finance as to tronic trade facilitation and to reduce trade partners and the scope of services is export-import approvals from days to sound-Singapore National Services has minutes. This will eventually lead to made an astonishing success of the electronically connecting the principal Singapore Tradenet-there are possible government departments involved in risks that have to be properly managed. trade, such as customs, port authorities, Mauritius has little in common with government agencies concerned with Singapore from the perspective of techno- trade, and their main trade interface logical and telecommunications infrastruc- partners, such as ports and airport, ship- ture, IT knowledge and awareness, avail- pers and container companies, container ability of skilled technicians, EDI and handlers, customs agents, freight forward- specific value-added service networks-all ers, banks, insurance companies, and of which will be ingredients to making the exporters and importers. The benefits will Tradenet project a success. include eliminating the need to physically Tradenet will be implemented in present documents to various organiza- phases, which include procedural studies, tions concerned, thus saving time and the provision of hardware and systems cutting costs, providing faster turnaround software, and network management and time resulting in quicker delivery of operation. Concurrent with implementa- goods, and reducing paper work. tion of Tradenet, tailored training and The government has placed high prior- awareness programs will be undertaken to ity on Tradenet and changing the existing ensure long-term integration and use of operational and administrative procedures the system following its initial design in trade. Four Task Groups have been phase. The experience of several national established to apply business initiatives in place (Hong Kong's 78 Information Technology and National Trade Facilitation: Gutide to Best Practice Tradelink, Australia's Tradegate, Korea's measurable outcome indicators for the KTNET, Taiwan's (China) TradeVan, and use of Tradenet will also be established Malaysia's Dagang*Net, among others) by the Steering Committee so that cost- indicates that training and "awareness" benefit data can be used for overall campaigns go a long way in risk reduction. program evaluation. A consultancy assignment is thus being proposed to enable Mauritius to profit SCOPE OF WORK from this initiative with internationally skilled and experienced help. The consultant's work includes, inter alia, the following tasks: ASSIGNMENT OBJECTIVES (i) Review and approve all technical, The goals of this assignment are initially system and procedural documentation, proposed as: data flows, EDI standards, functional specifications and outputs delivered AUDIT AND QUALITY ASSURANCE by each Task Group. (ii) Participate in Steering Committee The consultant will act as a resource and meetings to ieview project implemen- advisor to the Steering Committee, ensure tation and propose revisions or completion of a basic user requirements changes in policies, technical specifica- specification for the proposed system, tions o. schedules. review technical specifications, and ensure (iii) Ensure the technology used for there is a workable implementation plan. Tradenet will be open and state-of-the- art to avoid locking the government AWARENESS AND TRAINING into any particular proprietary system and to facilitate any software modifi- The consultant will prepare and present a cations following policy or procedural range of awareness, training, and promo- changes, and advise on the likelihood tional activities such that all Tradenet staff, of acquiring suitable off-the-shelf public and private sector users, and software. influential bodies-internal and external- (iv) Propose comprehensive measures understand exactly what the aims and and procedures to be taken to ensure objectives of Tradenet are, how it will be stringent protection of the confidenti- used and why, what they have to do to ality and security of data, including make use of it, and likely costs and ben- physical security, back-up procedures, efits. access controls, and periodic auditing of controls. MARKETING AND BUSINESS PLAN (v) Provide an audit report of the recommended technical specifications To ensure Tradenet begins with realistic for the architecture of Tradenet, expectations, a business plan will be standards, procedural, and telecom- prepared assessing the number of potential munications linkages. users of the system, the rate at which they (vi) Organize the acceptance and will join, acceptable pricing levels and support tests for determining compli- varying pricing algorithms for the service. ance with specifications for hardware, The experience levels and potential levels software and communication systems, of support for third party software and for backup and recovery procedures, software implementation, support, train- documentation, and the functionality ing, and network maintenance will also be of the overall system. assessed. With this information applica- (vii) Assist the Steering Committee in tions will be prioritized, types and mes- preparing the business (including cost- sages documented, and an implementation benefit study) and marketing plan for program prepared-both mandated (for Tradenet. example, for customs) and induced (for (viii) To the extent possible, provide example, appropriate pricing). Clear and information on potential downstream Annex 4: Sample Terms of Reference 79 impacts resulting from Tradenet's imple- months. The consultant should provide the mentation. Steering Committee an initial report four (ix) Advise on the measurable outcome weeks after the start date, summarizing the indicators for the use of Tradenet for progress of each task group, review of each Task Group, which will be used for training program, and the organization and overall program evaluation. schedule of future work. Monthly progress (x) Produce practical promotional reports should be prepared showing impor- brochures on the aims and objectives of tant milestones and the need for any Tradenet, how it will be used and why, interim decisions. At the end of 10 months what users need to do to make use of it. the consultant shall submit a post-imple- (xi) Assist designated agencies in the mentation review and a plan for further production and delivery of short courses, expansion of Tradenet in support of private workshops, and industry-specific presen- sector access to strategic information such tations on EDI and Tradenet to senior as statistical databases, company informa- managers, supervisors, and terminal tion, and so on. The final report, due 11 operators in both the private and public months after the initiation of the assign- sectors. The courses and workshops ment, should describe the outcome of the should include: introduction to EDI for overall work, and suggest any changes that managers; management workshop; may be required. technical workshop; special topics, such as trade facilitation, supply management, MID-TERM REVIEW electronic funds transfer, and business process reengineering. The computerization process in the public (xii) Advise, with cooperation from sector as well as in the private sector in customs, the Technical Committee on a Mauritius has so far focused mainly on the selectivity-risk analysis module to development of stand-alone systems, with Tradenet to permit better targeting of the exception of some of the commercial high risk consignments. banks which have set up more advanced (xiii) Advise the Steering Committee on networking systems. Government and setting up an EDI association, appointing private sector have taken the initiative to a delegate to the UN-EDIFACT ASEB create a value-added network service board, and attendance at appropriate provider to supply communication services, conferences. including EDI facilities, as well as database services. One of the first applications being REPORTING RELATIONSHIPS developed is a trade facilitation application. This project is an important step in the The consultant will report to the Steering national drive towards the creation of an Committee chaired by the Financial Secre- information based economy. The Govern- tary of the Ministry of Finance. To ensure a ment of Mauritius is actively seeking other coordinated and effective implementation areas for further exploitation of EDI tech- effort, the consultant should work closely nology in the public sector as well as with: (a) the Project Director; (b) chairper- encouraging private sector adoption of EDI. son of the Technical Committee; (c) chair- For this review, the consultant will: persons for each of the four Task Groups that have been established to streamline (i) Provide an assessment for further existing operational and administrative exploitation of EDI within the public processes involved in trade; and (d) the sector. Priority areas which have been National Computer Board for the training identified include contributions to the and awareness programs targeted to take National Pension Fund and welfare full advantage of the new system. funds, submission of monthly sales tax returns and collection of excise duty. DELIVERABLES This work is to be carried out with work groups made up of representatives The consultant is expected to complete the from the public institutions involved, assignment within an elapsed period of 10 private sector representatives as well as 80 Information Technology and National Trade Facilitation: Guiide to Best Practice officers from the Central Informatics extent to which they make up for an Bureau (CIB) which is the coordinating environment which is flexible enough to body responsible for computerization cater to the variety of national applica- within the public sector. tions which is being envisaged. The consultant will chart the critical The consultant's findings should path of activities and provide details of highlight the cost effectiveness of the the steps required to be taken towards existing infrastructure, its major features successful implementation of EDI in the as well as any major shortcoming that selected areas. The consultant will be may exist, with appropriate recommen- expected to identify critical technical, dations on solutions to those. regulatory, and organizational issues that need to be accounted for other than DESIRED QUALIFICATIONS OF technical issues. Some illustrations of CONSULTANT user requirements, and alternate solution that are available to address and the The selected consultant/s shall have at least identified areas should be provided. 5 to 10 years of intensive experience in EDI, Rough estimates of implementing the and be able to supply references to confirm priority areas as well as measurable successful implementation and knowledge performance indicators should also be of EDI applications in more than one included. country. Knowledge of the experience of (ii) Conduct an independent assess- other regional implementations of trade ment of the technology orientation of the facilitation networks is a prerequisite to EDI services provided to date. ensure that the implementation manage- Government has no internal special- ment advice given to the Steering Commit- ized expertise in EDI and given the tee is appropriately focused and relevant to strategic importance of the network the project. Appropriate client contact which is being put in place, an indepen- skills, writing, and verbal skills are re- dent expert perspective on the system quired for this assignment. Previous experi- architecture and the applications in ence with a value-added network or EDI development, as compared to technology supplier, bilingual capability (French and being used elsewhere, is sought. English), and willingness to spend appro- The focus for this assessment is on priate amount of time in the country to the key components that make up the provide the required assistance and expe- network services environment and the dite the project are all highly desirable. Annex 4: Sample Terms of Reference 81 Annex 5 UN-EDIFACT The followving is an introduction to UN-EDIFACT: to message standards, to the standards setting process, to the organization and cturrent status of UN-EDIFACT EDI messages. It is not intended as a text bookfor the technician or the specialist; rather, as a primerfor the tech- nologist and a reference sourcefor managers and generalists. Those in search of greater deal detail shouild contact UN-EDIFACT direct, or read the UN- EDIFACT Draft Directory of cuirrent message standards. Incompatible (a): opposed in character, discordant, inconsistent (with). Oxford English Dictionary Thirty years ago, the word "incompatible" The situation is no different in the field was associated with personal relation- of IT. ships, the visual and performing arts, and For 30 years as more, IT vendors almost anything nontechnical. Today the created and protected their own markets word has an entirely new meaning. based on proprietary hardware and soft- Incompatibility between international ware, on unique operating systems and voltage and power plugs and sockets is communications protocols. Indeed a major now a common experience. Perhaps less selling point for the industry leaders was well known are the battles between rival their defacto standards. products which led to compatibility The explosion in the IT market over the between electrical domestic appliances, last 10 years has been almost entirely due audio visual products and the components to the new interchangeability or compat- of information technology; for example, ibility between hardware, software and the struggle for supremacy between Beta communications. Over 35 million users and VHS VCR technologies. Developed could not access the Internet without a independently of each other, these rival very considerable body of international technologies were quite incompatible. agreements on supporting technologies. Ultimately VHS triumphed in the market- Over the same period, 100 million personal place to become the world standard. A computers have been installed using standard was necessary in this case to compatible hardware and software. ensure that all devices which used VCR A "standards industry" has been technologies, such as the cassette, need evolving; committees have been set up to only be produced to a single set of specifi- negotiate acceptable standards for every cations. imaginable product or service which Where competition or cooperation has requires compatibility for full market not evolved the rules for compatibility (or acceptance. a standard), the production costs for each UN-EDIFACT, or United Nations EDI rival format make the end product more for Administration, Commerce and Trans- expensive and less useful. Where the port, is the international organization opposite is true, where an accepted stan- which addresses the process of agreeing dard evolves, or is accepted by an indus- standards for business messages ex- try, the product is cheaper, more useful to changed directly between computers and the consumer and there is a wider choice between organizations by means of EDI. for the consumer. Thereafter, suppliers EDIFACT facilitates the removal of paper differentiate on quality, functionality and and fosters the substitution of electronic service-not on standards, formats or based processes between entities involved levels of compatibility. in international and domestic trade. 82 Information Technology and National Trade Facilitation: Guide to Best Practice WHOSE STANDARD: YOURS OR MINE? Industries cannot exist in isolation from other industries. For example, supermar- Generally speaking, larger corporates and kets obtain around 80 percent (by value) of government departments have already set their purchases from industry suppliers; their own internal standards. Database the other 20 percent is spent with suppliers systems define the information to be who are not industry-specific, such as exchanged; programs manipulate that construction and maintenance, vehicles, information and present reports to users in information technology, banks, financial a corporate standard layout by means of institutions, insurance companies and the hard copy or screens. Incompatibilities like. They also have to exchange informa- occur between computer systems as tion with labor unions, taxation and corporates acquire other companies who regulatory authorities and industry bodies. already have their own differing internal All industries have similar information standards, and between government exchange problems. departments who operate independently This has led to a movement towards of each other. No matter how large the cross-industry, or national standards. So organization may be, the standards they far, the leaders in national standard setting have developed for information inter- have included the United States with ANSI change are still unique to that corporation. X12 (American National Standards Institu- In messaging applications these have come tion, Accredited Sub Committee (X) 12), to be known as private standards. and the United Kingdom. The United About 30 years ago, corporates and Kingdom developed a retail industry government departments began to reach standard called Tradacoms which evolved out to their suppliers and clients in an into a national cross-industry standard effort to impose their own standards (or during the 1980s. With the possible excep- agree common formats), in order to reduce tion of France, no other country has the costs and time involved in data entry, embarked upon setting national standards error correction and paper handling, which for cross-industry trading, for a number of influenced their reaction speed and poten- reasons. tial economies. Clearly there were also These reasons vary but notably include: strategic marketing and supply chain cost, leadership, technology infrastructure issues involved at the same time. As these (and therefore the need), and in some intercorporate systems began to adopt EDI countries, such as Japan and Korea, busi- technologies and to embrace the wider ness culture. Japan and Korea operate industry rather than just a few key trading under similar business cultures which are partners, industry wide information aimed at locking suppliers exclusively into exchange initiatives evolved. This gave an industry or supplier-specific supply rise to industry standards. chain to the exclusion of their competitors. A small number of the industry mes- This trading system (Keiretsu and sage standards of the time applied to Chaebol-centric) is at odds with the global industries, most particularly to air principles of EDI and standards setting. transport and banking. Even today, these These ideals include precompetitive global industry standards are only acces- cooperative standards development in sible to specific members of that industry, order to upgrade a whole industry's ability although efforts are being made to broaden to compete. Proponents argue that you eligibility for use. Nevertheless, these type cannot steer only part of a ship. The of standards can still be more properly Australian rail system, where some states described as closed user group standards, have incompatible gauges with other such as SWIFT for the banking industry states, is a classic example of the penalties and SITA for the air transport industry. for nonstandardization. True industry standards are accessible to Corporates, industries, countries and all participants in an industry. End users regions which are committed to private cannot yet access SWIFT and SITA from standards as a means of excluding compe- their own systems, although this will, in tition or raising barriers to entry have time, come about. actually constructed electronic barriers to Annex 5: UN-EDIFACT 83 trade which lock themselves in as well as For any message standards setting exclude competitors. In so doing they are exercise there is a common objective: to creating a double problem for themselves: facilitate the rapid movement of data from they will undoubtedly have to remove computer application to computer applica- these barriers with, in some cases, substan- tion, reliably and with predictability. A tial cost and time penalties. They will also more sophisticated aim may include mov- have to invest in rejoining the world ing only the minimum amount of data trading community systems, based on necessary for this purpose. It is implied that agreed standards. this exercise is a prerequisite for software These reasons apart, the major motive package development which are able to for deferral of agreeing national standards deploy the standards in commonly used has been the undoubted success of the applications. Hence, when standards have international standards movement under been approved and tested, they are handed the aegis of the UN. over to software developers (in paper or Most countries now have, or are in the electronic media formats). The developers process of adopting UN-EDIFACT as both then integrate the standard messages into their national and international standard. their existing translation software pack- The more important trade is to a country or ages, or develop more appropriate soft- region, the more important to them are ware. international standards or UN-EDIFACT. Any structured message (such as a purchase order, invoice, and so on) which is MESSAGE STANDARDS exchanged between trading partners can be broken down into four categories of infor- Electronic commerce is a series of tech- mation: niques which involve electronic delivery and receipt of information. The term * Administration data: such as identifica- embraces electronic mail, information tion of parties involved in the transac- services, electronic forms and work flow tion, names, addresses, codes. automation products, databases and bulle- * Transaction data: such as specific buy-sell tin boards, and their multimedia enhance- information, products-services, quanti- ments. Most notably, it includes electronic ties, codes. data interchange, or EDI. EDI is the "se- * Financial information: such as values, nior" technique in electronic commerce, payment terms, discounts. involving specific business information * Regulatory or mandatory data: such as transfer from computer application to tax identification, taxation type and computer application. There is no human amount, company registration details, interaction in the process; it operates tax year date. independently of time, distance, and proprietary protocols, using electronic Every type of standards setting exercise, communications and (generally) electronic be they at the private, industry, national or mail boxes. Third party operators known as international level, needs to agree on the Value Added Networks or VANS, carry the information content and on the rules for majority of EDI traffic, both locally and exchange of each message type. At an internationally. industry level, for example, the retail The specific standards covered by the industry, it is assumed that the message, EDIFACT process embrace all structured such as an invoice, is industry-specific. messages deployed in the trade, transporta- Therefore it contains information which is tion and administration process. Conceptu- designed only for that industry. At the ally, this includes all information contained international level that invoice is a generic on paper documents used in current pro- message, including all of the information cesses. However, it is important to empha- exchanged for any invoice type, for all size that EDI does not envisage substituting industries. electronics for paper, nor automating There are a number of sequential steps current processes: this is merely the starting in the standards setting process: point for the proper application of EDI. 84 Information Technology and National Trade Facilitation: Guide to Best Practice (i) Agree data content: rather than an intraindustry (and interna- - Identify all messages exchanged tional rather than an intranational) ap- between partners in a trading commu- proach; and the support of all national nity. governments, national standards associa- - Allocate titles and functional tions, and international agencies involved descriptions to each message type. in the trade process. - Identify each individual specific This mandate also defines UN- piece, or field of data (data element) EDIFACT's latent weaknesses, which contained within each message type. include the following: (ii) Syntax: - To agree the rules of layout, and * The magnitude of UN-EDIFACT's scope grammar for identification. means that only powerful and wealthy - To compile a data dictionary for all corporations and industries can afford data elements, and all variations. active participation in the process. - To identify all usage of data ele- Smaller industries, countries and SMEs ments. (Small and Medium Enterprises) have to - To define frequency of usage. depend upon these participants to - To agree a unique identifier for each represent their best interests. data element contained in the data * UN-EDIFACT concentrates on messages dictionary. and message content. There is no formal - To agree and define a single, com- process for critically evaluating the mon standard data element for all future genuine business need for that message usage, for all variations. or that specific information, nor for - To document any exceptions and all messages which may be eliminated, rules for use. subsumed or even added to by the - To identify all codes and standard electronic commerce process, particularly tables used in the messages under following reengineering. Many say there consideration. is need to add a best practice component (iii) Interchange: to UN-EDIFACT work. Others argue that - To agree the character set to be used this work should be undertaken by a in the electronic exchange of messages. separate agency. - To agree electronic addressing * International messages are, by definition, conventions, headers, trailers and sepa- all-inclusive. The U.K. retail industry rators for identification of message and evaluated the UN-EDIFACT Purchase data element types, and any component Order message (ORDERS) as a substitute of a file of messages which may be for their Tradacoms purchase order. The exchanged. EDIFACT purchase order contained over - To agree where data elements are 200 data elements; the retail industry in required (mandatory) or where they may the U.K. needed less than 10 percent of be optional, or conditional. these. This perceived "overengineering" - To agree rules for exchange, logic for specific industries is leading to the and exceptions, where possible. development of industry subsets of EDIFACT. Once started, message standards setting In the case of the European retail becomes a continuous process. Rules for industry this has led to the development updating messages, for release to software of the EANCOM (European Article developers and other standard bodies need Numbering Communications) subset of to be agreed. Quality assurance processes, message standards. They use EDIFACT media and distribution, training and data elements, data dictionary, code sets publicity all need to be provided. and syntax, but have specifically struc- Factors which distinguish international tured messages for their industry. The standards such as UN-EDIFACT from EANCOM software is now designed to national and industry standards are, handle these shorter messages which therefore, geographic scope and application leads to better use of information tech- breadth of the process; an interindustry nology resources and faster processing. Annex 5: UN-EDIFACT 85 A CONNECTION contains one or Establishment CONNECTION Termination more interchanges. The technical -- -~ protocols for establishment, maintenance and termination, are not part of this standard. An INTERCHANGE contains: Interchange INTERCHANGE Interchange - UNA, if used ~- -~ -- A -s - - UNB, interchange hardware .,- / ~ ~ >\ - Functional Groups if used, or only - .' ~ messages ,~ - g / s- UNZ, interchange trailer UNA UNB FUNCTIONAL or UNZ ' A FUNCTIONAL GROUP contains: GROUPS M A - - UNG, Functional Group header - Messages of the same type '_ , ---- UNE, Functional Group trailer UNG Message MESSAGE Message UNE ' A MESSAGE contains: - UNH, message header - Data segments Data DATA Data - UNT, message trailer UNH Segment SEGMENT Segment UNT - - - ~~~~~~~~~~~A SEGMENT contains: - A segment tag TAG + SIMPLE + COMPOSITE - Simple data elements, or TAG + DATA ELEMENT DATA ELEMENT - Composite data elements A SEGMENT TAG contains: ' -x - A segment code, and if explicit ______'-.____._ indic., rep/ nest value(s) Code : Value A SIMPLE DATA ELEMENT ___ O- CoMo. contains a single value Vle COMPO- COMPO . Value NENT A COMPOSITE DATA ELEMENT DDATA ATA. [ contains component data elements EL. EL. A COMPONENT DATA ELEMENT contains a single value Value V Annex 5 Figure 1: The UN-EDIFACT Standard Reference Model (ISO 9735) EANCOM is expected to be a model for THE COMPONENTS OF EDIFACT other industries. The specific use of EDIFACT messages UN-EDIFACT uses its own terminology to for an application is defined within describe the components of the EDIFACT documents called Implementation reference model. (See Annex 5 Figures 1 Guidelines. While not normally the and 2.) province of UN-EDIFACT, local imple- Europeans tend to prefer the use of mentation guidelines are proving to be message branching diagrams to help define incompatible with otherwise identical a message. North Americans tend to use an international applications. This might EDIFACT message table for the same not be important in closed user groups, purpose. UN-EDIFACT publications pro- but where messages have to be ex- vide further detailed information on all changed between industries or between topics mentioned in this overview. global trading partners this is proving to be counter-productive. This is particu- THE UN-EDIFACT REFERENCE MODEL larly true for the import-export, customs and transportation processes. The UN-EDIFACT EDI standards articulate the rules that define the exchange and 86 Information Technology and National Trade Facilitation: Guide to Best Practice interpretation of data between systems. The they identify the boundaries between standards have also been designed to various levels. User Data Segments are achieve machine and communication media contained within the messages and carry independence. Thus, it is possible to create the user data. All segments are identified and transfer a structured message in by a unique three character alpha tag, accordance with the standard in any ma- preceding the data within that segment. All chine environment and over any type of Service Segments are defined by tags in supporting communications function. This which the first two characters are "UN," could be anything from physical media followed by another character to signify the transfer (disk or magnetic tape) to the use different types. In brief the interchange of a VAN. UN-EDIFACT (ISO 9735) de- structure consists of: scribes the standard reference model. EDI message exchange is represented in Segment Name Segment Tag EDIFACT by the concept of an interchange. This is the structure containing messages Service String Advice UNA Conditional and subsequent data elements. An inter- Interchange Header UNB Mandatory change is a hierarchical structure using Functional Group Header UNG Conditional segments to separate the levels. There are Message Header UNH Mandatory two types of segments, defined as Service User Data Segments As Required Message Trailer UNT Mandatory Segments and User Data Segments. Service Functional Group Trailer UNE Conditional Segments are always transmitted because Interchange Trailer UNZ Mandatory Level UNH BGM PAI 0M I M I GR. GR. 2 GR. 3 C 20 Cj5 C 5 l I RFF CTA NAD DTM TRI CUX ALI FIX PAT C 10 C 10 M I C; 5 M I MI I C 5 C 5 c 10 2 LOC RFF DOC CTA Fil LOC DTM C 5 C 10 C 5 C 5 C 5 C 5 C 5 Annex 5 Figure 2: A UN-EDIFACT Branching Model Annex 5: UN-EDIFACT 87 UN-EDIFACT SYNTAX Syntactic components in UN-EDIFACT UN-EDIFACT syntax defines the structures * interchange to be used for the interchange of data. * functional group Syntax rules specify the grammar for EDI * message communications which define how the * segment group EDIFACT components, that is, data ele- * segment ment, segment, message, functional group * composite data element (composite) and interchange, are combined to produce * (simple) data element an EDI communication. * data value EDIFACT syntax is based on three * character; separator fundamental assumptions on the data and how data are interchanged between trading partners. They are * mandatory or conditional status of data elements and segments. * character based data; * batch data transfer; and The syntax defines interchange and * predefined, structured messages. functional group as syntactic components for the identification, addressing or routing The UN-EDIFACT data types are based and control of the data, that is, messages. on characters: alphabetic, numeric and These functions are mainly used by EDI alphanumeric. Bit strings are presently not software and communication services. included. Discussions are taking place on From the user application perspective, the how to represent drawings and pictures main syntactic component is the message. which complement, for example, an inquiry Messages are structured by means of message. segments, that is, standard building blocks, The syntax is intended for batch transfer and groups of segments. The segments, in of data, or the transfer of one or more their turn, are built from composites and messages. Messages may be prepared in simple data elements, and the composites advance, in such a manner that the sending are built from data elements. The data and receiving applications cannot further elements are represented in an interchange influence the processing while file transfer by data values. is in progress. There are situations where The syntax offers basic (default) choices interactive EDI is needed, for example for character set, separators and representa- transport reservation systems where a tion of characters. User groups may make confirmation message is required instanta- other choices as well. neously. This kind of communication is The syntax also specifies some compo- typically bi-directional, with small data nents designated to have a special syntactic volumes and short response time require- meaning to control interchanges of data. ments. An interactive EDIFACT syntax They are alternative is currently being progressed to meet these needs. * service messages (many still under The data are interchanged in messages development); which are structured according to pre- * service segments; defined formats agreed by the EDIFACT * service composite data elements; process. The work of the EDIFACT organi- * service data elements; and zation primarily focuses on the design of * separators for data elements, composite such predefined message structures. data elements and segments. EDIFACT syntax has the following characters: DATA ELEMENTS * hierarchical structuring; Before any conversation can occur between * implicit data element identification; either people or computer systems, a set of * special character data separation; conventions and a dictionary of terms is * flexible length data structures; required. In EDIFACT these terms are 88 Information Technology and National Trade Facilitation: Guide to Best Practice called Data Elements, the vocabulary of an into broad categories according to their application. Each data element will identify nature, for example, an individual field or item of data designed - Oxxx for service data elements; for a specific purpose, for example, product - lxxx for documentation, references; number, quantity, unit price, and EAN - 2xxx for data, time, period of time. code. * Second to fourth digits: Individual data elements may be com- - xOOO-x499 for internationally bined to form composite data elements, for agreed data elements; example, a weight of 24 kilograms is - x500-x699 for national use; represented by the composite data element - x700-x799 for EDIFACT trial use; 24:KG. The database which contains all - x8OO-x999 for private use. data elements is known as the data element * Fourth digit: directory. - even for text form of data element; A data element is a unit of data which - odd ("even+l") for the coded form may be considered indivisible (source: ISO of data element. 2382/4). In EDIFACT a data element is specified through Names and descriptions are expressed in natural language. The working language of * a tag, or an identifier for the data ele- EDIFACT is normally English but, through ment, which is unique in the data ele- various international and national initia- ment directory; tives, data element directories are pub- * a name; lished in several languages. The tag is the * a description; and key in cross referencing language versions. * a representation, or format, for the The notation for data types is "a" for values of the data element. alphabetic, "n" for numeric and "an" for alphanumeric. The data element may be of Approved user data elements are regis- fixed or variable length. For fixed-length tered in the EDIFACT Data Elements data elements, the length is given immedi- Directory, which is a subset of United ately after the data type. A variable data Nations Trade Data Elements Directory element length is indicated by two dots (UNTDED). This is, the database of all after the data type, immediately followed registered data elements, be they on paper by the maximum length indication. or used in EDI. Some general guiding principles are There are established conventions for used to standardize data element lengths, the specification of data elements. The tag for example, is four digit numeric, designated to the data element according to these principles: . data elements in coded form are desig- * First digit: used to group data elements nated an ..3; Data Element Examples 3039 Party id identification (tag) Desc: Code identifying a party involved in a transaction (description) Repr: an..17 (represented by alpha numeric, up to 17 characters) 3042 Street and number/PO. box Desc: Street and number in plain language, or Post Office Box No. Repr: an..35 3055 Code list responsible agency, coded Desc: Code identifying the agency responsible for a code list. Repr: an..3 Excerptfrom the data elements directory, EDIFACT trial directory set 91.1 Annex 5: UN-EDIFACT 89 * data elements in plain language are found in the UN Code Lists Directory. given a format of either an..17, an..35 or Class 3 code lists are referred to in the an..70. UN Code Lists Directory. For some data elements only one code DATA ELEMENT VALUES list is specified, but in most cases more than AND CODE LISTS one code list may potentially be used. In such instances, the users may agree in the A data element value is a specific entry of interchange agreement to restrict their use an identified data element, represented in a to one single code list. Alternatively, the data element directory. Depending on the code list can be identified by specifying the form of the data element, the value is two data elements in association with the expressed as plain text or code. code value. In a few instances specific structures may be defined for data element values, for 1113 Code list qualifier, and example, for dates to be expressed as 3055 Code list responsible YYMMDD (year, month, day). agency, coded. A code list is a set of code values with defined meanings, designated to a particu- COMPOSITE DATA ELEMENTS lar data element. (COMPOSITES) Depending on the source, EDIFACT code lists are divided into four categories, A composite data element is a standard or classes. structure of two or more data elements. In EDIFACT, a composite data element is 1 Code lists for service data elements, specified through a tag, that is, an identifier maintained jointly by ISO and EDIFACT. for the composite data element, unique in 2 Code lists for user data elements, main- the directory; a name; a description; and a tained by EDIFACT. specification of content, that is, two or more 3 International code lists for user data data elements where the data elements are elements, maintained by ISO or UN/ taken from the EDIFACT Data Elements ECE. Directory, in a signifant sequence, and with 4 Code lists maintained by parties other a designated status for each element within than EDIFACT, ISO or UN-ECE. the composite. The tag of a composite data element is Code lists of classes 1 and 2 are to be composed of four characters. 3055 Code list responsible agency, coded Desc: Code identifying the agency responsible for a code list. Repr: an..3 5 ISO (International Organization for Standardization) Self explanatory. 6 UN-ECE (United Nations Economic Commission for Europe) Self explanatory. 7 CEFIC (Conseil European des Federations de lfilndustrie Chimique) EDI project for chemical industry. 8 EDIFICE EDI Forum for companies with Interest in Computing and Electronics (EDI project for EDP/ADP sector). 9 EAN (International Article Numbering association) Self explanatory. 10 ODETTE Organization for Data Exchange through Tele Transmission in Europe (European automotive industry project). Code values for data element 3055 code list responsible agency, coded excerpt from EDIFACT trial directory set 91.1 90 Information Technology and National Trade Facilitation: Gutide to Best Practice Examples of Composite Data Elements C080 PARTY NAME Desc: Identification of a transaction party by name, one to three lines. 3036 Party name M an ..35 3036 Party name C an..35 3036 Party name C an..35 C082 PARTY IDENTIFICATION DETAILS Desc: Identification of a transaction party by code, 3039 Party id identification M an..17 1131 Code list qualifier C an..3 3055 Code list responsible agency, coded C an. .3 Excerpt from the composites directory, EDIFACT trial directory set 91.1 SEGMENTS * First character: S for service composites; There is a need in EDIFACT to provide C for user composites. logical groupings of data, known as seg- - Second to fourth characters: ments. A segment is a standard structure of three digits (0-9), no particular functionally-related data elements and meaning implied. composites values, for example, an address segment, a goods description segment, or a The status of the data elements of a payments segment, which are identified by composite is their sequential positions within the struc- ture. * M for mandatory data elements; and In EDIFACT, a segment is specified * C for conditional data elements. through a tag, a name, a function and a specification of content, very much like When defining a composite data ele- composite data elements. ment, the data elements are arranged as There are, of course, conventions for the follows: specification of segments. The segment tag is alphabetic, and three characters in length. * mandatory data elements are placed before conditional; * First character: . frequently used data elements are placed U for service segments; before less frequently used; any other letter but U for user compos- * when updating a composite, any new ites; element is added to the end of (the new * Second and third characters: version of) the composite. no particular meaning implied. Composites are used to combine related The status of the data elements of a data elements into a structure. Composite composite is M for mandatory elements; data elements are used to relate a generic and C for conditional elements. data element to a qualifier; relate data When defining a segment, the data elements that express code and plain text elements and composites are arranged as representation of the same data item; relate follows: an amount to a measure unit specifier; and to specify an interval (range of values). * the segment tag is placed as a first data element in the segment; Annex 5: UN-EDIFACT 91 Segment Examples NAD NAME AND ADDRESS Function: To specify the name/address and their related function, either by C082 only and/or unstructured by C058 or structured by C080 thru 3207. 3035 PARTY QUALIFIER M anS3 C082 PARTY IDENTIFICATION DETAILS C 3039 Party id identification M an.. 17 1131 Code list qualifier C an..3 3055 Code list responsible agency, coded C an..3 C058 NAME AND ADDRESS C 3124 Name and address line M an..35 3124 Name and address line C an..35 3124 Name and address line C an..35 3124 Name and address line C an..35 3124 Name and address line C an..35 C080 PARTY NAME C 3036 Party name M an.35 3036 Party name C an.35 3036 Party name C an..35 C059 STREET C 3042 Street and number/P.O. Box M an..35 3042 Street and number/P.O. Box C an..35 3042 Street and number/P.O. Box C an..35 3164 CITY NAME C an..35 3229 COUNTRY SUB-ENTITY IDENTIFICATION C an. .9 3251 POSTCODE IDENTIFICATION C an..9 3207 COUNTRY, CODED C an 3 Segment NAD. Excerpt from the segments directory, EDIFACT trial directory set 91.1 * mandatory elements are positioned specific meaning to the function of a before conditional elements; generic data element, a composite or a * frequently used elements are positioned segment. The values of the qualifier are before the less frequently used; always expressed in coded form. * when updating a segment, any new The combination of qualifier and generic elements are added to the end of (the element(s) offers great flexibility. Several new version of) the segment. types of information can be defined in one single data structure. New requirements are When presenting segment specifications, met by adding new qualifier values while the names of simple data elements and leaving the data element directories and composites are written in upper case: the message structures unchanged. names of the components of the composite For the development of new segments, data elements are written in lower case. composites, and data elements, EDIFACT The concept of the segment has an encourages the use of generic rather than important role from the data interchange specific alternatives. perspective. It is the smallest data unit There are certain construction rules interchanged with explicit identification involving qualifiers. (using the segment tag as identifier). If only one data element is to be quali- fied, the qualifier is placed immediately QUALIFIERS after that data element; together the two elements form a composite. A qualifier is a data element providing a If two or more elements are qualified, 92 Information Technology and National Trade Facilitation: Guiide to Best Practice ______ __ _- - Approved messages are published in Qualifier for segment NAD, an Example EDIFACT Standards Directories, while SegmtNAD is qualified by data element messages accepted for trial are published in Se nty . Draft directories. 3035 Party qualifier. The conventions for specification of Depending on the value of 3035, the segment messages demand that the identifying code can carry name and address information about of the message is alphabetic, and six charac- various parties. ters of length. For example, The status of the segments and segment groups of a message is M for mandatory NAD+BY+... means Buye 's name and usage; and C for conditional. address data For a segment in a group inside another NAD+SE+... means Seller's name and address data group, the status (M or C) is conditioned by NAD+CN+... means Consignee's the status of the parent group. name and address data The message header (service segment UNH) is the first segment in a message, and the message trailer (service segment UNT) the qualifier is placed before these data is the last. elements; together the elements form a To document the message structure, composite. either segment tables or branching dia- If a segment is to be qualified, the grams are used. Their main purpose is to qualifier is placed as a simple data element secure the correct sequencing of segments. immediately after the segment tag. When specifying new or changed messages, great care should be taken to MESSAGES avoid segment collision. This occurs when a segment is used for different purposes in A message is an ordered series of characters different positions in the message without intended to convey information (source: separating the positions by means of ISO 2382/16). In EDIFACT, a message has mandatory elements. One mechanism often been allocated a well-defined business used is to place "stand-alone" segments function and a predefined structure, ex- before segment groups; another is to make pressed by means of segments. Within the use of the service segment section control message, each segment is identified by the (service segment UNT) to divide the mes- segment tag and its sequential position in sage into sections. the message structure. - - In EDIFACT a message is specified 0. Introduction through a unique identifying code, a name, This message provides the definition of the a function, and a specification of content, Party Information Message (PARTIN) to be which includes used in Electronic Data Interchange (EDI) between trading partners involved in * service segments for message header, administration, commerce and transport. message trailer and, as appropriate, 1. Scope message section control, plus a selection 1.1 Functional Definition of user segments taken from the A message to enable the transmission of EDIFACT Segments Directory; basic information regarding locations and ' segments structured in groups to show the related operational, administrative, financial, manufacturing and trading data. hierarchical data dependencies, as 1.2 Field of Application needed; The UN Standard Party Information Mes- * specified sequence of the segments and sage may be applied for both national and segment groups in the message; international trade. It is based on universal * status and repetition factor stated for commercial practice and is not dependent on each segment and segment group in the the type of business or industry. message; Excerpt from message PARTIN, EDIFACT trial * clarification of usage for each segment directory 91.1 and segment group in the message. Annex 5: UN-EDIFACT 93 Each segment position has a unique function. the data for this function is carried in a defined type of segment. To further structure a message, segments can be grouped. Segment group 4: NAD-DTM-FII-SG5-SG6-SG7-SG8 A group of segments for giving the details of a party. NAD, Name and address A segment for identifying the party identification code and the corresponding function, name and address. The party identification code is mandatory, and the structured address form is preferred. DTM, Date/time/period A segment specifying the date and the time details relevant to the party information identified in the NAD segment. FII, Financial institution information A segment identifying the financial institution, (e.g. bank) and relevant account numbers for the party identified in the NAD segment. Segment group 5: LOC-DTM A group of segments for giving locations and dates relevant to party. LOC, Place/location identification A segment specifying the locations relevant to the party identified in the NAD segment, e.g., internal building number on a site. DTM, Date/time/period A segment specifying dates and times relevant to the LOC segment. Segment clarification (excerpt). Message PARTIN, EDIFACT trial directory set 91.1 THE ORGANIZATION of the UN are entitled to participate under Article 11 of the UN charter. Among the In 1986, the UN-ECE approved the acronym many countries that participate under EDIFACT, which translates to EDI For Article 11 are Australia, Japan, Korea, New Administration (Government or Public Zealand, Singapore, and so on. Administration), Commerce and Transport. Under the UN-ECE's Committee on the The concept is to provide a single interna- Development of Trade, the trade facilitation tional EDI standard flexible enough to meet activities are undertaken by the Working the needs of government and private Party on Facilitation of International Trade industry. Procedures, commonly referred to as In 1987, three events marked the begin- Working Party 4 (WP.4). Within WP.4 there ning of the formal EDIFACT development are two groups of experts, GE.1 and GE.2. It process. The UN-ECE appointed EDIFACT is GE.1 that manages the development of rapporteurs for North America, Western the global UN-EDIFACT standard, and its Europe and Eastern Europe; EDIFACT parallel committee, GE.2 that deals with syntax was adopted by ISO and UN-ECE; procedures and documentation. and the first message was adopted for trial The UN-ECE WP.4 appoints individuals use. The organization has since evolved (by called rapporteurs who are nominated by June of 1995) as illustrated in Annex 5 the local governments, and delegates Figure 3. regional responsibility to develop the Authority is delegated by the UN to the standard in the best interests of that region. ECE, which then delegates authority to its The rapporteurs are required to set up committees. The UN-ECE is one of the the appropriate machinery and facilities in United Nation's regional economic commit- their region, including the appointment of a tees. Others include ESCAP (Asia Pacific) local Rapporteur's Team secretariat. They and ECLAC (Latin America). Full members also coordinate regional activity in message of the UN-ECE include the countries of development, technical assessment, promo- Eastern and Western Europe as well as the tion and documentation, and special United States and Canada. Other members projects. 94 Information Technology and National Trade Facilitation: Guiide to Best Practice Tag Name Status Repeats Tag Name Status Repeats UNH Message header M 1 NAD Name and address M 1 BGM Beginning of message M 1 DTM Date/time/period C 5 DTM Date/time/period M 5 FII Financial institution information C 10 FII Financial institution information C 10 Segment Group 5 C 20 FTX Free text C 5 LOC Place/location identification M I Segment Group 1 C 5 DTM Date/time/per:' d C 2 RFF Reference M I Segment Group 6 C 15 DTM Date/time/period C 1 RFF Reference M 1 Segment Group 2 C 2 DTM Date/time/period C I NAD Name and address M 1 Segment Group 7 C 5 Segment Group 3 C 5 CTA Contact information M 1 CTA Contact information M 1 COM Communication contact C 5 COM Communication contact C 5 Segment Group 8 C 10 UNS Section control M 1 SCC Scheduling conditions M I Segment Group 4 C 200000 DTM Date/time/period C 2 UNT Message trailer M I The segment table for message PARTIN, Party information message. Excerpt from EDIFACT trial directory set 91.1 STANDARDS APPROVAL STANDARDS DEVELOPMENT PROCESS PROCESS United Nations African General Assembly EDIFACT Board AFEB R _ _ A Australian/New Zealand Economic and Social EDIFACT Board Council p ANZEB P Eastem Europe O EDIFACT Board Regional Economic UN/ECE REEEB Commission U/C T Asia EDIFACT Board E ASEB Committee on Trade U Pan American R EDIFACT Board PAEB S Western Europe WP.4 GE.1 - - EDIFACT Board AFEB Annex 5 Figure 3: UN-EDIFACT, the Organization Annex 5: UN-EDIFACT 95 SUBMISSION Submit to local secretariat 4 REVIEW Local review Invite overseas participation STATUS 0 Submit to WP.4 i for information only STATUS 1 WP.4 approved as draft recommendation for trial usage STATUS 2 Recommendation approved by WP.4 Registered as a UNSM Annex 5 Figure 4: Message Approval Process Regional Boards are appointed locally to and could be used to meet the stated support the rapporteurs in the execution of business needs. their responsibilities. The Boards' constitu- . Whether there is a similar or identical tion is not regulated by WP.4. It varies to message currently under development allow for regional differences in geography, which would meet the stated business language and political environment. need. DEVELOPING A MESSAGE The results of this technical assessment are then advised to the industry group by Although involvement in the EDIFACT the EDIFACT secretariat and depending on message development process is relatively the assessment the following actions are simple, there are a number of important initiated. procedures to be followed. In the first Where there is a similar or identical instance, the industry group must identify EDIFACT standard message already in use, the functional and business need for an the industry is advised of this, provided EDIFACT message and submit these details with the details and invited to submit any on the appropriate "New Message Request" changes which they might consider neces- (NMR) form to the local EDIFACT Board sary to meet their specific needs. Any such secretariat. (See Annex 5 Figure 4.) At this change requests are again referred to TAG stage of the process some consideration for consideration. needs to be given to the technical aspects of Where there is a similar or identical the message. message under development, the secretariat When an NMR is received by the secre- recommends that the industry group join in tariat, it is logged and then passed through the development with the group currently the local board to the EDIFACT Technical working on the message. Where this devel- Assessment Group (TAG) for initial consid- opment is taking place in another region, eration of the following: the rapporteur consults with the chair of the industry group to ensure that the group * Whether there is an existing message is prepared to commit both the necessary which has similar or identical functions financial and human resources to the 96 Information Technology and National Trade Facilitation: Guide to Best Practice project. When this has been established, the and none under development, and the rapporteur consults with the rapporteus(s) rapporteur is satisfied that sufficient in the other region(s) and arranges for the human and financial resources are available chair of the group in the other region(s) to to develop the message, the secretariat liaise on further development work. forwards the validated NMR to all other Where there is no similar or identical regions. They are then given a period of six message already established as a standard, months to notify joint development. During Associated BOARD CEN Body Management Bureau Secretariat TEDIS Coordinating Committee Technical Assessment Mamntenance AssessmnTA) Group (MAG) GrouI (TAG) Change Request Procedures and I Agreement Documentation Awareness Group (CAG) Grou~ (PDG) Group (Aw G) Code Group PT Message Development Groups Special Interest Groups JM 1 Materials Management Interactive T3 JM 2 Purchasing UNSM User Guides/ Standard Liaison T6 - JM 3 Product and Quality Data Security T4 JM 5 Customs JM 6 Finance Business Information Modelling T5 JM 7 Construction/ Architecture - JM8 Statistics JM 10 Tourism/ Trave/ Leisure JM 11 Healthcare JM 12 Social Admin/ Employment Annex 5 Figure 5: A Typical Regional EDIFACT Organization Description, WEEB Annex 5: UN-EDIFACT 97 this period the industry group which has approved, they are distributed to other submitted the new message request can regions. If rejected, the relevant industry commence development work. group is notified. Change requests coming Once the NMR has been submitted onto in from other regions also pass through the the international scene, the message devel- local TAG. Every attempt is made to ensure opment moves through three formal stages: that interested industry groups are pro- vided with copies of the changes for review * Status 0. This is when a "working draft" and action if necessary. of the message is submitted to the United Annex 5 Figure 5 describes a typical Nations Working Party on Trade Facilita- regional EDIFACT organization. tion (UN-WP.4) to notify users world- wide that the message is currently under UN-EDIFACT DELIVERABLES development. The message at this stage is not in the public domain, but will be The main deliverables from the EDIFACT made available under a caveat arrange- process are the UN-EDIFACT set of directo- ment by the local rapporteur to encour- ries, formally known as UNTDID (United age other possible users of the message Nations Trade Data Interchange Directory). to join in the development process. The diectories include the rules of conduct * Status 1. When the message has been for interchange, syntax rules, message developed to the point where it is con- design guidelines, directories of messages sidered to have sufficient stability for a and their supporting directories, both draft trial, it is resubmitted to WP.4 with the and standard, descriptions of messages, recommendation that it be granted Status segments, composite data elements, and l-"Recommended for Trial Use". data elements, and that of codeswith * Status 2. Following a minimum of 12 reference to their maintenance agencies. months trialling of the message during Joint technical support groups also which any necessary changes are made, develop documentation such as guidelines the message is again submitted to WP.4 for business modelling, check lists for with the recommendation that it be technical assessment, and guidelines for granted Status 2-"Recommended as a implementation of messages. United Nations Standard Message" The UNTDID and all other deliverables (UNSM). are available via the secretariat of the UN- ECE as paper printout; the directories of Status 0 and Status 1 messages are messages and their supporting directories subject to changes which must pass through are distributed on diskette only. There are the approval process. To request a change plans to make all documentation available the appropriate Change Request Form must electronically in the near future, via e-mail be completed and submitted to the secre- connection. tariat. These are reviewed by TAG. If 98 Information Technology and National Trade Facilitation: Gutide to Best Practice Annex 6 Glossary and Abbreviations This glossary is aimed at those new to EDI, and merely provides a starting point. It may be expanded as need and opportunity allow. It should be noted that there are occasionally quite different definitions of terms between data processing usage and data communication usage; the term "baud" is a good example. The definition selected here, where any contention exists, is that which is clearest and most appropriate for the EDI aspirant. A usually consolidating the goods into a larger unit, which is then tendered to ABI See Automated Broker Interface. an airline. Many air freight forward- access To log on, to sign on, or to begin ers operate their own aircraft. using a system. telecommunications air way bill (air bill) A document used by connection to an electronic commerce the airlines for air freight. It is a system. contract for carriage that includes acknowledgment An EDI message in carrier conditions or carriage includ- response another EDI message. ing such items as limits of liability ad valorem Literally: according to value. In and claims procedures. The air way shipping, a freight rate set at a certain bill also contains shipping instruc- percentage of the declared value of an tions to airlines, a description of the article. In customs, an ad valorem duty commodity and applicable transpor- is assessed as a percentage rate or tation charges. value of the imported merchandise. The airline industry has adopted For example 5 percent ad valorem. a standard, formatted air way bill that ADS Aligned Documentation System. accommodates both domestic and advising bank The bank (also referred to international traffic. The standard as the seller's or exporter's bank) document was designed to enhance which receives a letter of credit or the application of modern computer- amendment to a letter of credit from ized systems to air freight processing the issuing bank (the buyer's bank) for both the carrier and the shipper. and forwards it to the beneficiary ALFA An automated clearance system for (seller or exporter) of the credit. German Customs at Frankfurt Air- AIAG See Automotive Industry Action port. Group. alphabetic character set A character set AID Automatic Identification. This in- that contains letters and may contain cludes such technologies as radio control characters and special charac- frequency identification, ear tags, bar ters but not numeric digits (ISO 2382/ codes and so on. 4). AIM Automatic Identity Marking, such as alphanumeric character set A character set bar codes, radio tagging, and so on. that contains both letters and digits air freight forwarder A freight forwarder and may contain control characters for shipments by air. Air freight and special characters (ISO 2382/4). forwarders serve a dual role. To the America Online A client support electronic shipper, they are an indirect carrier, network for users of PC software. because they receive freight from American National Standards Institute various shippers under one tariff, The body set up to define, maintain, Glossary and Abbreviations 99 and coordinate standards in the broad range of economic issues. United States. Data-processing- APEC includes the six ASEAN related standards are supervised by countries, plus: Australia, Canada, committees which are named X China, Hong Kong, Japan, South followed by a nuLImber as an identi- Korea, Taiwan (China) and the fier. For example, ASC X9 is the United States. The secretariat is banking data encryption committee, located in Singapore. X12 is the EDI document standards ASN Advanced shipping notice. A goods committee. delivery note sent to arrive before ANA See Article Numbering Association the goods so as to alert goods inward (United Kingdom). and supply personnel at the receiv- ANSI See American National Standards ing end of the supply chain. Institute. Association of Southeast Asian Nations ANSI X12 The ANSI subcommittee Established in 1967 to promote overseeing EDI standards setting. political, economic and social coop- ANZEB Australia-New Zealand Edifact eration among its six member coun- Board. tries: Indonesia, Malaysia, Philip- APEC See Asia Pacific Economic Coopera- pines, Singapore, Thailand and tion. Brunei. APNA Australian Product Number assumed receipt The principle of assum- Association. ing what the shipping note or deliv- application program Computer program ery note says of a shipment is cor- written to process a particular rect. Hence goods inward personnel function within a business, such as, do not need to check the delivered sales order processing, inventory quantity. Used in conjunction with control. bar code reading and an EDI-deliv- archiving The process of storing and ered ASN as a device for eliminating arranging historic records. In the the invoice. case of computer-related activities async Asynchronous: transmission which this is generally done for audit, is not related to a particular fre- backup, and security purposes. quency, that is, bits-per-second rate. Article Numbering Association (United A method of data transmission Kingdom) One of 36 such organiza- where each character sent is framed tions set up in as many different by start-stop signals. Used in slow- countries. Their original technologi- speed devices like teleprinters. This cal task was to establish bar codes, is generally the method used by PCs. particularly in wholesale and retail See sync. trade. Their duties are expanding ATA Carnet ATA stands for the combined now. For example, bar codes will French and English words "Admis- soon denote size, style, and so on. sion Temporair/Temporary Admis- ASC X12 Accredited Standards Committee sion." An ATA Carnet is an interna- X12, part of the ANSI organization. tional customs document for tempo- ASCII American Standard Code for rary duty-free admission of certain Information Interchange. A standard goods into a country in lieu of the binary notation for numbers, letters, usual customs documents. The and control characters. ASCII is the Carnet serves as a guarantee against basic communication method of the payment of customs duties which computing. may become due on goods tempo- ASEAN See Association of Southeast rarily imported and not re-exported. Asian Nations. ATM Asynchronous Transfer Mode. A ASEB Asian Edifact Board. more recent telecommunications Asia Pacific Economic Cooperation An technique. informal grouping of Asia Pacific AT&T (Istel) American Telephone and countries that provides a forum for Telegraph, now owners of Istel, a ministerial level discussions on a British EDI service provider and 100 Information Technology and National Trade Facilitation: Giide to Best Practice various other national VAN opera- bar code An automatic identification tions. technology which encodes informa- audit trail The series of logs and data tion into an array of varying widths, which follow a transaction from parallel rectangle bars and spaces. beginning to end. An audit trail is bar code reader See scalnner. used to ensure that a transaction has batch processing Procedure in which data actually reached its destination and processin-g records are collected is complete. together ancd then processed in authentication The process of ensuring sequence, one immediately after that someone who has logged on to a anotlher, as opposed to interactive service is a botnafide user of that processing, where each record is particular service. processed as it arrives. auto answer Process in which a terminal, baud A rate of transmission over a chan- PC, or modem responds to an inicom- nel or circuit. The number of pulses ing call on a dial-up line in order to which can be transmitted in a second establish a data link with an (often) is the baud rate. Thus baud trans- unattended device. lates as pulses per second. This is auto dial A function of some modems sometimes taken to be bits per which will automatically dial up and second (bps) but since not every access a network on a given com- pulse measured represents data, this mand, at a given time, or on recogni- is an inaccurate, although not totally tion of a given condition in a pro- inadmissible, definition. gram. Also known as auto call. baudot The baudot code is similar in Automated Broker Interface A part of concept to ASCII. It assigns codes to U.S. Customs' Automated Commer- letters of the alphabet, numbers, and cial System, permits transmission of punctuation marks. Baudot uses only data pertaining to merchandise being 5 bits for 32 possible combinations. It imported into the United States, does not have a unique code assign- directly to U.S. Customs. Qualified ment for each character. Two codes participants include customs brokers, are used for case shifting (letters and importers, carriers, port authorities, figures) which thus allows a total of and independent data processing 60 different characters to be repre- companies referred to as service sented. Baudot, named after the centers. French pioneering telegraphic Automotive Industry Action Group A engineer, was for many years used specific automotive industry manu- for telegraphic traffic. Digital tech- facturing group set up under the niques have caused ASCII and other, auspices of the ANSI X12 committee. more advanced codes, to largely Its purpose is to set standards for the replace the baudot code. North American automotive manu- Bay Plan (BAPLIE) An EDIFACT message facturing industry. describing the location of containers in ports, harbors and container ships. B BBS Bulletin Board Service. best practice A generic term describing backup Facilities which enable a com- the adoption of the latest technology puter or network to function even if and reengineering practices in order a vital component fails. Involves the to evolve new commercial practices. provision of extra hardware and bill of exchange An unconditional order software. See fault tolerant. in writing, signed by a person bandwidth The difference between the (drawer) such as a buyer, and ad- highest and lowest frequencies of a dressed to another person (drawee), transmission channel. Expressed in typically a bank, ordering the hertz (Hz). It can also be used as a drawee to pay a stated sum of money measure of line capacity. to yet another person (payee), often a BAPLIE See Bay Plan. seller, on demand or on a fixed or Glossary and Abbreviations 101 future date. The most common which travel agents pay airlines and versions of a bill of exchange are: wholesalers electronically, using EDI (a) A draft, wherein the drawer messages. instructs the drawee to pay a BT British Telecom. certain amount to a named BT-Tymnet The merged McDonnell Dou- person. Sight drafts are payable glas-EDINet and BT company; an EDI when presented. service provider. A later merger with Time drafts (also called usance MCI now sees them trading as Con- drafts) are payable at a future cert, a BT-MCI merged entity. fixed (specific) date or determin- bulletin board Electronic notice board able date. used in information networks for (b) A promissory note, wherein the storage and display of general infor- issuer promises to pay a certain mation. Available to all users of the amount. systern or to specified groups (for bill of lading A document issued by a example, for price lists). See BBS. carrier to a shipper, signed by the bureau Service bureau. A commercial captain, agent, or owner of a vessel, computer operation which sells time furnishing written evidence regarding and services. receipt of the goods (cargo), the conditions on which transportation is C made (contract of carriage), and the engagement to deliver goods at the cabotage Water transportation, navigation prescribed port of destination to the or trade between ports of a nation. lawful holder of the bill of lading. call ID Each leased line which has access A bill of lading is, therefore, both to an EDI systenm based upon X.25 a receipt for merchandise and a protocols has a unique ID, hence calls contract to deliver it as freight. There can easily be traced. With dial-up are a number of different types of calls, an ID needs to be embedded bills of lading. within each call by the network. bisync Binary synchronous transmission of (Note: Not to be confused with caller data, used for high-speed continuous ID.) transmission. Sending and receiving callback The process by which an EDI devices are controlled by clock pulses server system checks the source of which regulate the rate and timing of access to the system in order to data flow. Bisync is a character- ensure that the caller is an authorized oriented means of transmission. user. The process often uses a callback bond store A storage area where cargo still modem, password-activated. When under customs control may be stored. called, it will hang up and then call See also free store. back the user's number to set up data box Colloquial term referring to a trailer, communication. semitrailer or container. Caller ID A telephony technique whereby BPR Business process reengineering: the the caller's originating telephone process by which new commercial number is displayed on a small methods of operation may be estab- display screen built into a telephone lished, often employing electronic handset, enabling the recipient to see commerce techniques. who is making the call and to make broadcasting Simultaneously sending a decisions on screening the call. message to more than one destina- cargo manifest A list of a ship's cargo or tion. This technique eliminates passengers. multiple sequential transmission of CARGO-IMP An IATA standard for airline the same message and, more impor- messages, referring to cargo. tantly, ensures that identical messages CARGONAUT An internal clearing system arrive at the same time at all intended at Schipol airport in Amsterdam. recipients' computers. carnet A customs document permitting the BSP Bank Settlement Plan. The system by holder to carry or send merchandise 102 Information Technology and National Trade Facilitation: Guiide to Best Practice temporarily into certain foreign EDIFACT versions of CO obtained countries (for display, demonstration, through Chambers of Commerce, for or similar purposes) without paying example. duties or posting bonds. See ATA CETS Community Access Service. Carnet. CFR See Cost and Freight. carrier (i) An individual or legal entity that chaebol Korean conglomerates, character- is in the business of transporting ized by strong family control, authori- passengers or goods for hire. Ship- tarian management, and centralized ping lines, airlines, trucking compa- decision making. Chaebol dominate nies, and railroad companies are all the Korean economy. By 1988, the carriers. output of the 30 largest chaebol (ii) Authorized network operator; represented 95 percent of Korea's carrier of voice and data traffic. GNP. Generally known as PTT (posts, channel A physical or logical communica- telephone, and telegraph) in a tion path for transmission of data. duopoly or a regulated environment, character A standard representation of a for example, Telstra. Bell Atlantic of symbol, letter, number, or special the United States is an example of a character. In a computer, represented carrier in a deregulated environment. by bits. Often taken to mean the same Also known as telcos and telecom as byte. Not strictly accurate, but near authorities. See also BOC; RBOC; enough. RHC. character set A finite set of different CAS Community Access Service. characters that is considered complete CCC Customs Cooperation Council (based for a given purpose (ISO 2382/4). in Brussels). Now known as the WCO. Chemical Industry Document Exchange CCITT See Consultative Committee on An ANSI X12 subcommittee dealing International Telegraph and Tele- exclusively with the chemical phone. industry's document standards. CDC Control Data Corporation; formerly CHIEF Customs Handling of Import and operated REDINET, an EDI service. Export Freight. A U.K. Customs CDN Cellular Data Networks. project (successor to DEPS). CEC Commission of the European Com- CIDX See Chemical Industry Document munities. Exchange. CEDI*FIT Customs EDI for Import Trans- CIF See Cost, Insurance, Freight. actions. CIFCI Cost, insurance, freight, commission CEFIC Federation of European Chemical and interest. Industries. EDI for the chemical CIG See common interest group. industry in United Kingdom and CIM Computer-integrated manufaturing. Western Europe; one of the first CIT Customer input terminal. transnational EDI projects in Europe; classification The categorization of mer- pilot started September 1987. chandise according to a Harmonized cell The on-board stowage space for one Tariff Schedule (HTS). Classification shipping container on a ship. affects the duty status of imported CEN See European Committee for Stan- merchandise, and is initially the dardization. responsibility of an importer, customs CEPT See Conference of European Posts broker or other person preparing the and Telecommunications. entry and declaration messages. CER Common Economic Relationship. The clearing house In the context of EDI, a Australasian common market be- clearing house comprises a network tween Australia and New Zealand. and central-computer-based mailbox Certification of Origin An official docu- service enabling many trading part- ment issued by a national trade ners to send documents electronically department which validates goods for and receive messages from a single sale originated or largely produced in central system, independent of time that particular country. There are UN- or traffic. Glossary and Abbreviations 103 CNAB National Council For Banking same business file. Automation, Brazil. common interest group A group of net- CO See Certification of Origin. work users who may have profes- Codabar (2 of 7 code, code 27) A numbers- sional interests in common, rather only bar code consisting of seven than trading interests, such as doc- modules, two of which are wide. tors, engineers. Code 39 (3 of 9 code) A four alpha numeric common user group A group of network bar code consisting of nine modules, users whose shared interest is their three or which are wide. need to use a particular service; for Code 93 A four alpha numeric bar code example, a financial data base service. capable of encoding all 128 ASCII communication controller Generally, a characters. hardware and software unit which Code 128 An example of a long symbol monitors and controls telecommuni- broken into sections and stacked one cations traffic within a computer upon another, similar to sentences in network. It optimizes line usage, a paragraph. These are extremely allocates priorities, talks to the compact codes. outside world; for example, OSI, combined bill of lading A bill of lading SNA, X.25. covering a shipment of goods by communication session Slices of time more than one mode of transporta- established and agreed on by commu- tion. nicating computers, during which commercial invoice A document identify- data is exchanged, or interconnection ing the seller and buyer of goods or takes place. The more complex the services, identifying numbers such as network, the more sophisticated the invoice number, date, shipping date, task. mode of transport, delivery and communities Trading groups or end user payment terms, and a complete list collectives. and description of the goods or compliance checking In processing mes- services being sold including prices, sages or transaction sets within an discounts and quantities. A commer- EDI system, an essential part of the cial invoice is often used by govern- software logic is to ensure that all ments to determine the true value of transmissions contain the minimum goods for the assessment of customs mandatory information demanded by duties and also to prepare consular the EDI standard being used. Compli- documentation. Governments using ance checking does not necessarily the commercial invoice to control mean that the document is complete imports often specify its form, con- or accurate, but it does ensure rejec- tent, number of copies, language to be tion and identification of missing data used and other characteristics. elements or syntax errors. Hence it is commercial paper Negotiable instruments the comparison of information sent used in commerce. Examples of by an EDI user against EDI standards, commercial paper are bills of ex- and the reporting back of anomalies. change, promissory notes, and bank component data element A simple data checks. element which is a subordinate commercial set The primary documents for portion of a composite data element, a shipment of goods. A commercial and in interchange, is identified by its set usually includes an invoice, bill of position within the composite data lading, bill of exchange, and certifi- element. cate of insurance. component data element separator A commodity code A system for identifying character used to separate the compo- a commodity by a number in order to nent data elements in a composite establish its commodity rate in freight data element. transport. composite data element A data element common access reference The key which containing two or more component relates all transfers of data to the data elements. 104 Information Technology and National Trade Facilitation: Gutide to Best Practice CompuServe An electronic network bill of lading or waybill as the person providing databases, information or party to whom the goods are services and bulletin board services in consigned. addition to electronic mail. consignment note The document which is concentrator A hardware device which completed to cover a particular connects several communication lines delivery or consignment. There is a (coming in or going out) and con- UN-EDIFACT version of the consign- denses the data traffic onto one line ment note. for speed and economy. consignment Shipment of one or more Concert The merged BT-MCI messaging pieces of property, accepted by a service company. carrier for one shipper at one time, conditional A statement commonly used receipted for in one lot, and moving as a test value in computer program- on one bill of lading. ming. In standards setting, it indi- consignor Individual, company or entity cates that the presence of a segment that ships goods, or gives goods to or element is at the discretion of the another for care. The consignor is sending party, that is, used as re- usually the exporter or his agent. quired or based on mutual agreement, consolidation Combining of less than or is dependent on the value of and truckload (LTL) or less than container presence of another data element in load (LCL) shipments of cargo from a the message. Also, a statement in a number of shippers at a centrally message directory or a segment of a located point of origin by a freight condition for the use of a segment, a consolidator, and transporting them data element, a composite data as a single shipment to a destination element, or a component data element point. Consolidation of cargo often (see mandatory). results in reduced shipping rates. Conference of European Posts and Tele- consular invoice Invoice covering a communications A subsidiary body shipment of goods certified by the to CCITT, specific to Europe, includ- consul of the country for which the ing Scandinavia. It concerns itself merchandise is destined. This invoice with data services connectivity. Some is used by customs officials of the of its most recent work has been on country of entry to verify the value, incompatible videotex systems. quantity, and nature of the merchan- conferencing Technique of using intercon- dise imported. There are outstanding nected terminals and computer demands by numerous international systems, including PCs, for interac- agencies for the elimination of this tive messaging or electronic mail. document from international trade. confirmation A formal notice (by a mes- Consultative Committee on International sage or code) from a mailbox system Telegraph and Telephone A commit- or EDI server that a message sent to a tee within the ITU. Among other trading partner has successfully things, it concerns itself with the reached the intended mailbox or has conventions which enable incompat- been retrieved by the addressee. See ible networks and computer systems functional acknowledgment. to exchange data. CCITT operates connect time The time that a device is within the broader standard issues set connected to a circuit, and hence to a out by the ISO. computer. container A single rigid, sealed, reusable connection Established link for transmis- metal box which comes in standard sion of data. lengths, in which merchandise is connectivity Ability of a particular com- shipped by vessel, truck, rail or air. puter or network architecture to be Container types include: standard, connected to and integrated with high cube, hardtop, open top, flat, incompatible systems. OSI and X.400 platform, ventilated, insulated, standards address connectivity issues. refrigerated, bulk. consignee A person or party named in the container number An up to seven-digit Glossary and Abbreviations 105 number (six plus a check digit) used which the seller has the same obliga- to identify the size and type of tions as under cost and freight (CFR) container; usually preceded by a four- but with the addition that he has to letter alpha (letter) code prefix desig- procure marine insurance against the nating container ownership. buyer's risk of loss of or damage to Container Parks A Customs endorsed the goods during the carriage. The storage area where it may handle seller contracts for insurance and overseas cargoes in FCL containers. pays the insurance premium. containerization The practice or technique The buyer should note that under of using a container in which a the CIF term the seller is only re- number of packages are stored, quired to obtain insurance on mini- protected, and handled as a single mum coverage. The CIF term requires unit in transit. Container descriptions the seller to clear the goods for have been broadened to include a export. unitized load on a carrier-owned CPI Characters per inch as applied to bar pallet, loaded by shippers, and code density. unloaded by receivers at places other cross dock The process which takes place than on airline premises, and re- at a distribution center, whereby strained and contoured so as to goods are delivered to a dock at one permit proper positioning and tie end of the building. Loads are then down aboard the aircraft. made up and consolidated and continuous process improvement The delivered from the other end. system whereby every process is CRS Computer reservation systems; the constantly analyzed in order to spot airline specific reservation systems. weaknesses and eliminate them so as See GDS. to improve the process. cryptology The science from which data CONTRL An EDIFACT message: acknowl- encryption and decryption for secure edgment-rejection advice. systems is derived. Banking services, correspondent bank A bank that acts as a in particular, make great use of depository for another bank, accept- encryption techniques. ANSI X9.9 ing deposits and collecting items defines encryption algorithms (the (such as drafts) on a reciprocal basis. complex calculations which encrypt corruption Data corruption, the loss or and decrypt data). scrambling of data in a computer CUG See common user group. storage medium. CUSDEC The standard European Customs COSAC Hong Kong air terminal's system declaration format, employed in for import-export clearance. EDIFACT standards. COST European Cooperation in Scientific CUSRES An EDIFACT message. Customs and Technical Research. response. Cost 306 A message series under develop- Customs The excise, duty, and tariff ment for physical transport of goods agency handling the national customs in Europe. process. Cost and Freight A condition under which a seller must pay the costs and freight D necessary to bring the goods to the named port of destination, but the DagangNet EDI Malaysia's messaging risk of loss or damage, as well as network. additional costs due to events occur- data A representation of facts, concepts, or ring after the goods have been deliv- instructions in a formalized manner ered on board, are transferred to the suitable for communication, interpre- buyer when the goods pass the ship's tation, or processing by human beings rail in the port of shipment. The CFR or by automatic means (ISO 2382/1). term requires the seller to clear the data communication The process of goods for export. transmitting, receiving, and validat- Cost, Insurance, Freight A condition under ing nonvoice data over one or more 106 Information Technology and National Trade Facilitation: Guiide to Best Practice data links, according to an accepted bit key. RSA is the newer encryption protocol (for example, SNA-OSI). standard. See RSA. data dictionary A table of terms within a data entry The task of keying in data to a message standard or a specific appli- computer system from a source cation with precise meaning for all document. users of the system. For example, in data integrity Condition of data in a the ANSI X12 grocery document whole, original, and uncorrupted standards, CA is the code for a case of form. canned goods, of a known size and data item The alphabetically and numeri- known number of cans. Each use of cally coded contents of a data ele- CA in a specific message is entered ment. into a data dictionary. data segment requirement designator A data element The smallest named item in character which indicates the manda- an EDI message which can convey tory-conditional status of a data data. Also, a unit of data which, in segment. certain contexts, is considered indi- data transfer The physical process of visible (ISO 2382/4, EDIFACT); a unit initiating and sending data to a of data for which the identification, corresponding computer system. This description, and value representation is generally taken to mean the trans- have been specified. fer of a file of data, in a batch; hence data element attribute A defined charac- the terms batch file transfer and file teristic of a data element. transfer. See batch processing. data element directory A document which DB See data base. describes the attributes of all data DC See Distribution Center. elements, within EDI standards. Also, DCE Data circuit (terminating) equipment. a listing of identified, named, and In a network, an access point to the described data element attributes, network or a network node on which with specifications as to how the a data circuit terminates. corresponding data element values DDP Digital data prc.cessing. shall be represented. decoder Part of a bar code reading system; data element name One or more words in the electronic package which receives a natural language identifying a data signals from the scanner, performs the element concept. algorithm to interpret the signals into data element representation The format meaningful data and provides the (for example, numeric, alphabetic, interface to other devices. variable length) of a data item. decryption Returning an encrypted mes- data element requirement designator A sage to its original clear text (plain character which indicates the manda- text). tory or conditional status of a data dedicated line A nonswitched data chan- element. nel; a private line; a leased line. data element separator A syntax character DELFOR An EDIFACT message. Delivery used to separate data elements in a instruction. segment. delivery advice The document or EDI data element tag A unique identifier for a message which confirms to a supplier data element in a data elements or transporter that goods delivered directory. have been received intact. An ad- data element value The content or data vanced shipping note (ASN) or ship item within the data element. Also, note manifest (SNM) are examples of the specific entry of an identified data delivery advice. element represented as specified in a DELJIT An EDIFACT message. Despatch data elements directory. advice. Data Encryption Standard Cryptographic demurrage The detention of a freight car or algorithm designed by the U.S. ship by the shipper beyond the time National Bureau of Standards to permitted for loading or unloading; encipher and decipher data; uses a 64- the extra charges a shipper pays for Glossary and Abbreviations 107 detaining a freight car or ship beyond to destination mailboxes. time permitted for loading or unload- DLMB Dead Letter Mailbox. ing. Used interchangeably with dock receipt A receipt issued by a ware- detention. Detention applies to house supervisor or port officer equipment. Demurrage applies to certifying that goods have been cargo. received by the shipping company. DEPS Departmental entry process system The dock receipt is used to transfer (for U.K. Customs; see also CHIEF). accountability when an export item is DES See Data Encryption Standard. moved by the domestic carrier to the DESADV An EDIFACT message. Despatch port of embarkation and left with the advice message. international carrier for movement to detail area The portion of an EDI message its final destination. which encompasses the actual body document For the purposes of EDI, a of the business transaction. document is a form, such as an dial-up The act of accessing a network by invoice or purchase order, which dialing an access phone number, or trading partners have agreed to by initiating a computer to dial the exchange and which the EDI software number. The dial-up line makes a handles within its compliance- connection to the network access checking logic. See Message. point, via a node or PAD. Document Interchange Standards of digital (communications) The transmis- America The ANSI secretariat which sion of information using binary is the administration arm for ASC X12 digits as opposed to analog signals. activity within the United States. direct transmission Data transmission via document standards The data element an intermediary, such as a mailbox, directory, syntax and codes which introduces a time delay. Hence this describe approved standards for a can be said to be indirect transmis- given form (for example, an invoice) sion. Transmission of data from one in a given industry (for example, the host computer system to another grocery industry). See ANSI; (host to host) is direct. If the host-to- EDIFACT. host transmission utilizes a public document translation The process by network, simply for carriage, this is which the EDI software translates known as message switching. incoming documents using agreed DISA See Document Interchange Stan- logic for computer storage. It trans- dards of America. lates documents on retrieval into the DISH Data Interchange for Shipping, a format in which the receiving party value-added network for trade wishes to receive them. Hence there facilitation. can be three different forms for a Distribution Center The organization single document in EDI, between two which performs the cost docking partners: the original input format; function. Goods are received at one the translated, stored (standard) end and consolidated into loads for format, and the retrieved format. particular stores and delivered from documentation (i) The narrative which the other end. The Distribution records the logic of a program or a Center may also add value to goods; system or a standard. It is not neces- it may offer quality assurance, wrap- sarily contained on paper; it may be ping and price ticketing services for held on magnetic media or on the retailers. computer system, in which case it Distribution Requirements Planning The may be called on-screen documenta- computer system takes sales data tion. input from POS devices, compares (ii) All or any of the financial and against stock on order and policy and commercial documents relating to a then generates (EDI) purchase orders. trade transaction. distributor The mailbox manager program domain A notional geographic area, or, which moves messages from recipient when applied to networking, a sphere 108 Information Technology and National Trade Facilitation: GLuide to Best Practice of activity. See private domain; public (Pronounced ebbseedick.) domain. EBDI Electronic business document domestic network A telecommunication interchange, the original generic term network within a given (home) for EDI. country. A noninternational network. EBT Electronic Benefit Transfer; a Cana- drawback-refund of duties Refund of all dian system whereby financial ben- or part of customs duties, or domestic efits (such as unemployment benefit) tax paid on imported merchandise are issued to beneficiaries by using an which was subsequently either Automatic Teller Machine (ATM). manufactured into a different article EC See electronic commerce. or reexported. The purpose of draw- ECA Electronic Commerce Australia. back is to enable a domestic manufac- ECE The United Nations Economic Com- turer to compete in foreign markets mission for Europe (under whose without the handicap of including in auspices the EDIFACT standards are his costs, and consequently in his being developed). sales price, the duty paid on imported ECN Export Certification Number. The raw materials or merchandise used in number issued by a typical EDI trade the subsequent manufacture of the system to an exporter upon receipt of exported goods. an EDI declaration (CUSDEC). DRP See Distribution Requirements EDI Electronic data interchange, some- Planning. times electronic document inter- DTE Data terminal (terminating) equip- change or electronic business docu- ment. The sending-receiving equip- ment interchange. See EBDI. ment in a network, such as a PC or EDI association A national body created to video display terminal. propagate and control the use of EDI DTI Department of Trade and Industry within a country. (United Kingdom). Also direct trader EDI server The computer system at the input (for direct entry from traders to heart of an EDI service, comprising HMCE). computer, software, mailboxes, and DUA Directory user agent. An X.500 entity translation facilities. which allows a user access to direc- EDI service The provision of a secure EDI tory services. mailbox and document translation duplex See full duplex; half duplex. facilities via a network. duty A tax levied by a government on EDIA EDI Association, United States. import, export or consumption of EDIANZ EDI Association of New Zealand. goods. Usually a tax imposed on EDICA EDI Council of Australia. imports by the customs authority of a EDICC EDI Council of Canada. country. Duties are generally based EDICON The U.K. construction industry on the value of the goods, some other project for EDI. factors such as weight or quantity EDIFACT Electronic Document Inter- (specific duties), or a combination of change for Administration, Com- value and other factors (compound merce and Transportation, the ISO duties). See ad valorem. standards which will determine a unified international EDI standard. E Developed by ECE. Syntax is initially contained in ISO 9735. Known as UN- EAN European Article Number Associa- EDIFACT since the early 1990s. tion. See ANA. EDIFICE The European electronic industry EANCOM European Article Numbering project for EDI. Communication. EDX An organization for EDI for the EAS European Association of Shipping electronics industry. Informatics. EEC European Economic Community. EBCDIC Extended binary-coded-decimal EFT Electronic funds transfer, the generic interchange code. Used for computer term for sending payment instruc- storage and processing. An 8-bit code. tions over a computer network. EFT Glossary and Abbreviations 109 can be regarded as a set of standard transmission of software, generally documents in EDI jargon. via the intermediate medium of EFTA European Free Trade Association: the floppy disk, to another location (or non-EEC European countries locations) over an electronic network. (Scandinavia, Switzerland, and so Functions as a file transfer. on.) electronic supply management Stock EFTPOS Electronic funds transfer at point control and inventory management of sale: the use of credit or debit cards using electronic commerce tech- over a network to facilitate payments niques. for (generally) retail sales, by an electronic trading A full implementation individual consumer. of EDI, particularly the buying and EIE Electronic information exchange. A selling process within an industry or generic term for complementary common interest group. See paperless electronic services including EDI, trading. X.400 messaging, data bases, video- ELS Electronic Lodgment Service. tex, and so on. EMA Electronic Messaging Association. ELC Electronic letter of credit. Email, e-mail Electronic mail. electronic commerce The use of electronic enabling The process of integrating trans- networks and services to conduct lation software into an application business, such as information ser- software process. vices, data bases, electronic mail, EDI, encoding Turning plain text into code, of enhanced voice and fax services. any sort, by any means. electronic banking The substitution of encryption See cryptology; DES. electronic techniques for paper and end to end (supply, value chain) The bank notes. See FEDI. conceptualization of a complete end electronic documents The electronic to end process from raw material to images created at a computer termi- purchase of the final product at the nal or PC that replace the paper retail point of sale. trading documents. end user The specific individual involved electronic envelope Data sent with EDI in the active use of an EDI system, messages when the system does not indeed in any computer-based sys- employ document standards. It tem. consists of a header in front of the entrep6t An intermediary storage facility message and a trailer at the end, to where goods are kept temporarily for enable recognition and authentica- distribution within a country or for tion. No data translation is per- reexport. formed, hence it is of limited use to entry A statement of the kinds, quantities large trading communities. and values of goods imported to- electronic health care The substitution of gether with duties due, if any, and EDI and electronic commerce tech- declared before a customs officer or niques for the administration of other designated officer. health care services. entry documents The documents required electronic lodgment The declaration of tax to secure the release of imported and government duties using elec- merchandise. These may comprise tronic commerce techniques. Entry Manifest, evidence of right to electronic mail Interpersonal messaging: make entry, commercial invoice or a the process in which an individual pro-forma invoice when the commer- using a terminal or PC can access a cial invoice cannot be produced, network to send a keyed-in, unstruc- packing lists if appropriate, other tured message to another individual documents necessary to determine or group of people. X.400 is one of the merchandise admissibility. standards which governs the ex- EPC Export Promotion Council. change of electronic mail between EPOS Electronic Point of Sale. This is the services. generic term for cash registers and electronic software distribution The EFTPOS devices connected to net- 110 Information Technology and National Trade Facilitation: Gutide to Best Practice work. An EPOS device does not country on the value or volume of necessarily have an EFTPOS or certain exports, designed to protect settlement function. domestic producers and consumers ETSI See European Telecommunications from temporary shortages of the Statndards Institute. materials or goods affected, or to EU The European Union, until 1994 known bolster their prices in world markets. as EC, or the European Community. Some International Commodity European Committee for Standardization Agreements explicitly indicate when (CEN) The CEN (Comite European de producers should apply such re- Normalisation), is an association of the straints. Export quotas are also often national standards organizations of 18 applied in orderly marketing agree- countries of the EU and of the EFTA. ments and voluntary restrain agree- CEN membership is open to the ments, and to promote domestic national standards organization of processing of raw materials in coun- any European country which is, or is tries that produce them. Quotas are capable of becoming, a member of the the central plank of a managed trade EU or EFTA. policy. European Telecommunications Standards exported user A user of a domestic EDI Institute Established in March 1988 system in a foreign country. Overseas in response to the inability of CEPT to users of a Canadian grocery EDI keep up with the schedule of work on system (that is, suppliers) would be common European standards and regarded as exported users of the specifications agreed to in the 1984 system, since they would be paying Memorandum of Understanding the Canadian EDI operator for the use between CEPT and EU. ETSI has a of its EDI service. contractual relationship with EU to extract To select and remove (nondestruc- pursue standards development for tive, generally) items with a message, telecommunications equipment and which can be used for other purposes. services, and cooperates with other For example, message numbers can be European standards bodies such as extracted to compile a transaction log the CEN. and audit data. excise The revenue raising function of Customs and Excise, particularly for F import duties. In some countries this also includes the collection of value facilitation Programs designed to expedite added taxes. the flow of international commerce excise tax A selective tax on certain goods through modernizing and simplifying produced within or imported into a customs procedures, duty collection, country. An example is a tax on the and other procedures to which import of motor vehicles, or a tax on international cargo and passengers certain luxury goods. are subject. Facilitation includes EXIT An Australian system for automated simplifying the processes, adopting EDI trade clearances. internationally approved codes for expiration date In letter of credit transac- computer processing and EDI and tion, the final date the seller (benefi- electronic techniques for information ciary of the credit) may present interchange. documents and draw a draft under fault tolerant Attribute of computer the terms of the letter of credit. Also architecture so designed that even if called expiry date. various components fail, including a explicit representation The technique used processor or data channel, the com- to give absolute identification of the puter will still continue to function, location of a data segment within an albeit in a degraded (that is, slower) EDI message. fashion. export quotas Specific restrictions or fax on demand The inverse of the normal ceilings imposed by an exporting fax or facsimile transmission system. Glossary and Abbreviations 11 In this case, the user dials in a par- reformatting. Not exclusive to EDI. ticular number to a fax machine and forms See document. the fax is then delivered to the user. frame relay A data communications FCL Fuel Container Load. process analogous to fast packet FCP 80 A U.K. computerized port cargo switching. See packet switching. handling system. franco Free from duties, transportation FDX See full duplex. charges and other levies. Used also as FEDI See financial EDI. delivery condition, under which the feeding The movement of containers or seller must bear all transportation general cargo, undertaken by the charges and duties up to a named shipping company, by land or sea, to place of delivery. complete a sea voyage contracted free store A storage area which can store within the terms of Bill of Lading. only cargo that has been cleared by Feeding is analogous to airline customs. "hubbing." free text As opposed to formatted text FIATA International Federation of Freight used in EDI and message standards. Forwarders Associations. Free text is continuous string of fiber optics A high-capacity signal-carry- information just as in a normal letter ing medium in which signals are or conversation. Electronic mail is carried by light, as opposed to current free text. in conventional copper carriers. freight All merchandise, goods, products, file A collection of related information or commodities shipped by rail, air, stored in a computer. For example, all road, or water, other than baggage, purchase orders for a given period express mail, or regular mail. would be stored in a file. freight forwarder A person engaged in the file conversion Files may be held in a business of assembling, collecting, variety of data formats or code consolidating, shipping and distribut- conventions. So that a file can be read ing less-than-carload or less-than- by an incompatible system, it is truckload freight. Also, a person translated, or converted, to a format acting as agent in the trans-shipping which the other system is able to of freight to or from foreign countries read. and the clearing of freight through file transfer File transfer comprises a wide customs, including full preparation of range of specific data communica- documents, arranging for shipping, tions protocols, for example, TCP-IP warehousing, delivery and export (Internet Protocol), OFTP (ODETTE clearance. protocol), and so on. See data transfer. full duplex Simultaneous transmission of financial EDI The substitution of EDI for data in both directions over a data checks and paper remittance advice. communication link. financial instrument A document which full set All the originals of a particular has monetary value, or is evidence of document (usually the bill of lading). a financial transaction. Examples of The number of originals is usually financial instruments are: checks, indicated on the document itself. bonds, stocks certificates, bills of functional acknowledgment Automatic exchange, promissory notes and bills response by the EDI server that a of lading. message, or batch of messages, has float (information, inventory, financial) been received along with an indica- The amount of excess inventory, tion of syntax errors. information or finance created by a functional definition The precise purpose paper-based system in order to make of a message (for example, invoice or allowances for delays and for safety purchase order). A specific but stock. nonexclusive term used in standards format Set of rules governing a file or a setting. document, drawn up so that a pro- functional group Used within EDIFACT gram can be written for translation or standards to identify one or more 112 Information Technology and National Trade Facilitation: Guiide to Best Practice messages of the same type; headed by positioning system, such as ships, a functional group header service aircraft and goods vehicles. segment and ending with a functional GTDI Guidelines for Trade Data Inter- group trailer service segment. change, the original European functional group header The service UNECE EDI standards-setting body, segment heading and identifying the now subsumed by ISO's EDIFACT. functional group. Sometimes referred to as UNTDI functional group identifier Identifies the (United Nations TDI). type of message in the functional guideline A recommended set of proce- group. dures for use within EDI, particularly functional group trailer The service standards setting. segment ending the functional group. funds transfer See EFT. H G half duplex A circuit allowing two-way data transmission, but the terminals GDS Global Distribution System; one of connected to the circuit can receive the four major international airline only or transmit only at any one time. reservation systems which connects hand off In EDI document translation, the local and airline specific reservation act of handing over sorted, merged, systems together. and translated data to the next stage gateway A point of interconnection: the in the computer system. open door between one electronic handshake The name given to the act of network and another. For example, an recognition and opening of gateways electronic mail message to a corre- by two computer programs or two spondent overseas must go through a incompatible computer systems. number of gateways. The rules hard benefits Costs savings or financial describing the exact structure of a advantages which can be quantified gateway for electronic mail and as the result of a system change. (probably) EDI are contained in ISO harmonized codes An initiative of the X.400. The CCITT rules describing WCO by which all goods being gateways between international X.25 imported and exported are classified packet switched networks are con- in the same way, by all of the world's tained in X.75. International data customs authorities. destination codes are contained in Harmonized System A multipurpose X.121. international goods classification GATT General Agreement on Tariffs and system designed to be used by manu- Trade. See WTO. facturers, transporters, exporters, GDP Gross domestic product. importers, customs, statisticians, and GEIS General Electric Information Ser- others in classifying goods moving in vices. An EDI service provider. international trade under a single GENRAL An EDIFACT message. General commodity code. Developed under message. the auspices of the Customs Coopera- good funds The funds transferred into a tion Council (CCC, now WCO), this payee's account which have been code is a structured product nomen- checked against the payer's account clature containing approximately for validity and availability. 5,000 headings and subheadings goods movement The physical process of describing the articles moving in moving goods from the supplier to international trade. the consumer. Used in the same Hayes-compatible Hayes is a prominent context as information exchange and manufacturer and a leading supplier value exchange. of modems for personal computers GPS Global Positioning Systems. A satel- for over 10 years. To ensure compat- lite based system which can keep ibility between modems in PC-based track of devices fitted with a global systems it may be necessary to specify Glossary and Abbreviations 113 Hayes-compatible equipment. Never- otherwise dissimilar types. theless, modems must conform to Hz See hertz. V.Series recommendations. HDLC High-level data link control. A bit- I oriented data link control protocol. See SDLC; X.Series. Also description IAPH International Association of Ports of OSI in text. and Harbors. HDX See half duplex. IATA See International Air Transport header Data at the front of an EDI mes- Association. See SITA. sage, inserted for initial recognition. IBM 360/20 An early IBM computer. header area In EDI standards, the portion IBM 3270, 2780/3780 IBM proprietary of the message which precedes the communication protocols. actual body and trailer of the business IBM International Business Machines, an transaction, and which contains EDI service provider operating under information relating to the entire the business name IBM Information message. Network Services (INS). hertz (Hz) The measure of frequency (for ICAA International Civil Airports Associa- example, of alternating current) tion. measured in cycles per second: 60 Hz ICAO International Civil Aviation Organi- means 60 cycles per second. zation. HL/7 Health Level 7; a set of EDI-type ICC See International Chamber of Com- messages, although generally sent merce. and received in real time. These ICL International Computers Limited. A messages are used to exchange joint operation, with GEIS, of several medical information between hospi- UK-based EDI services, including tals and health departments. INS, International Network Services. HMCE Her Majesty's Customs and Excise ICR Intelligent Character Recognition. (UK). ICS International Chamber of Shipping. honeypot A jargon term used by EDI ID Identification, identifier. See call ID; service providers to describe a large line ID. company which is able to dictate to IDEA International Data Exchange Asso- its own trading partners the rate at ciation (Belgian-based international which a whole industry, or the large cross-industry association). company's own trading partners will identifier A character or group of charac- adopt EDI. A hub, or center of a one- ters used to identify or name an item to-many network. of data and possibly to indicate hooks Predefined entry points in a pro- certain properties of that data (ISO gram where other programs might be 2382/4). added or where data might be ac- IFTMFR An EDIFACT message. Interna- cessed under program control. tional forward and transport message host The computer at the heart of a net- framework (six messages). work-based computer system. III Institute of Information Industry. host to host Direct data communication IIN Institutional Information Network. between two computer systems in a images Coded electronic representations network. of, say, a document within a computer HOTLINE A proposed VAN for the port of system. More generally used to Hong Kong. Now replaced by describe line drawings or graphic Tradelink. information. hub The pivotal center of a trading net- IMO See International Maritime Organiza- work. The EDI mailbox-server com- tion. puter, in a one-to-many network. See implementation The activities involved in broadcast; honeypot. converting an idea (or contract) into a hybrid A mix of different technologies in working computer system. Includes computer systems. A mix of docu- everything from consultancy to ment types. A functional mixture of hardware installation. 114 Information Technology and National Trade Facilitation: Guide to Best Practice implicit representation Technique for the proliferating electronic net- whereby the location of a data seg- work services industry. Commonly, ment is implied from its relative but incorrectly, applied to denote the position within the message. Internet. imported users The reverse of exported Information technology The combination users. of computing, communications and importer The individual, firm or legal broadcasting technologies. entity that brings articles of trade information exchange Sharing of all from a foreign source into a domestic information in the supply cycle. Used market in the course of trade. in the same context as goods move- impost A tax, usually an import duty. ment and value exchange. See EIE. in-house system A system which operates INS See IBM; ICL. within an enterprise instead of being integration The process of harmonizing operated by a third party. systems and standards in order to incompatible Applied to systems that overcome incompatibilities. cannot communicate with each other intelligent network See network. because of, for example, dissimilar interactive processing Time-dependent documents, files with different data communication, in which a user formats, or differing communication enters data and then waits for a protocols. response. See batch processing. Incoterms A codification of international interchange Communication between rules for the uniform interpretation of partners in the form of a structured common contract clauses in export- set of messages and service segments import transactions. Developed and starting with an interchange control issued by the ICC in Paris. The header and ending with an inter- thirteen Incoterms (1990) were: change control trailer. (1) Ex Works (EXW), interchange control header The service (2) Free Carrier (FCA), segment starting and identifying an (3) Free Alongside Ship (FAS), interchange. (4) Free On Board (FOB), interchange control trailer The service (5) Cost and Freight (CFR), segment ending an interchange. (6) Cost, Insurance and Freight (CIF), intercompany Between companies. Ap- (7) Carriage Paid To (CPT), plied, for example, to a message from (8) Carriage and Insurance Paid To one company to another. See (CIP), intracompany. (9) Delivered At Frontier (DAF), interconnect A full, transparent-to-end- (10) Delivered Ex Ship (DES), user connection between networks, (11) Delivered Ex Quay (DEQ), offering end-to-end security and a (12) Delivered Duty Unpaid (DDU), single access process. and interface A shared boundary; a recognized (13) Delivered Duty Paid (DDP). and definable crossover point be- incremental paper trail The sequential tween two systems. See gateway; process in paper-based import-export handshake. processes. See additive trading Interleaved two of five code (I 2/5) A relationships, trade facilitation. number-only bar code symbology industry bodies Trade and industry consisting of five bars, two of which groups which represent the member- are wide. In this case both the bars ship of a whole industry, for example, and spaces carry information. article and product numbering intermodal transport The coordinated associations and manufacturers transport of freight, especially in associations. connection with relatively long-haul Information services The generic term for movements using any combination of electronic mail, Bulletin Board Ser- freight forwarders, piggyback, con- vices and data bases. tainerization, air-freight, ocean Information superhighway A media term freight, assemblers, motor carriers. Glossary and Abbreviations 115 International Air Transport Association A a system to the input requirements of trade association serving airlines, a receiving computer system within passengers, shippers, travel agents, an EDI community. and governments. interwork A limited version of full inter- International Chamber of Commerce A connect that gives networks the non-governmental organization ability to exchange messages. serving as a policy advocate for world INTIS An EDI project of the port of business. Members in 110 countries Rotterdam (the Netherlands). comprise tens of thousands of compa- intracompany Within a single company. nies and business organizations. The Applied to internal dealings. See organization aims to facilitate world intercompany. trade, investment, and an interna- INVOIC An EDIFACT message. Commer- tional free market economy through cial invoice. consultation with other intergovern- invoice A document identifying the seller mental organizations. and buyer of goods or services, International Maritime Organization identifying numbers such as invoice Established as an agency of the number, date, shipping date, mode of United Nations in 1948. Coordinates transport, delivery and payment technical matters affecting merchant terms, and a complete listing and shipping and traffic. description of the goods or services International Standards Organization being sold including prices, discounts Established in 1947, this is a world- and quantities. wide federation of national standards IRC International record carrier. The bodies, representing approximately transnational communication and 90 member countries. The scope of carrier companies, such as, ITT, RCA. work covers standardization in all IRD Inland revenue department. A generic fields except electrical and electronic term for a domestic taxation author- engineering standards, which are the ity. responsibility of the International irrevocable letter of credit A letter of Electrotechnical Commission (IEC). credit which cannot be amended or Together, the ISO and IEC form the canceled without prior mutual specialized system for worldwide consent of all parties to the credit. standardisation, and the world's Such a letter of credit guarantees largest nongovernmental system for payment by the bank to the seller/ voluntary industrial and technical exporter so long as all the terms and collaboration at the international conditions of the credit have been level. met. International Telecommunications Union IRS Internal Revenue Service, the US- A specialized agency of the United based domestic taxation authority. Nations with responsibilities for IRU International Road Transport Union. developing operational procedures ISDN Integrated services digital network. and technical standards for the use of The networks and equipment for the radio frequency spectrum, the integrated broadband transmission of satellite orbit, and for the interna- data, voice, and image, from rates of tional public telephone and telegraph 144 kbit/sec up to 2 Mbit/sec. network. There are over 160 member ISO 7372 The ISO trade data element nations of the union. directory; identical to UN Trade Data Internet A global family of electronic Element Directory. networks originally connecting ISO 9000 A series of voluntary interna- defense and tertiary education estab- tional quality standards. Its formal lishments. Now generally available to name is ISO 9000 Series of Standards. any user of electronic network ser- ISO 9735 The ISO application level syntax vices. rules used in constructing EDIFACT interpret The reverse of translate; to use documents. translation software to exactly match ISO See International Standards Organiza- 116 Information Technology and National Trade Facilitation: Guiide to Best Practice tion. linked groups include a broad range ISSC An international standard code for of industries linked via banks and newspapers, magazines and regular general trading firms. There are eight publications. major industrial groups, sometimes Istel See AT&T. referred to as Kigyo Shudan: IT Information technology. The broad, Mitsubishi, Mitsui, Sumitomo, Fuyo, generic European term, embracing DKB, Sanwa, Tokai, and IBJ. The telematics. See telematics. vertically linked groups (such as ITU See International Telecommunications Toyota, Matshushita, and Sony) are Union. centered around parent companies IVAN International Valued Added Net- with subsidiaries frequently serving work Services. See VANS. as suppliers, distributors, and retail IVR Interactive Voice Response. The outlets. technology which is able to respond key The unique code necessary for encryp- with prompts to spoken input across tion and authentication processing. telephone services. key management The organization and change procedures for cryptographic J algorithms. See DES, RSA. kilo See K. JCA (1(4) Japanese chain store's EDI KOMPASS A system for data exchange document standards. within the port of Bremen, West JEDI See Joint Electronic Document Inter- Germany. change. IT Just in time (applied to inventory L control). The technique whereby only the exact amount of stock to be label The code at the front of a file of consumed is delivered to the next link documents which enables the batch to in the supply chain. It is intended to be recognized by the EDI server. See free the final assembler in the supply data transfer file. chain of work-in-progress and goods LAN Local Area Network. inward stocks. Landbridge The movement of cargo joint Electronic Document Interchange A (containers) by land for a portion of transitory U.S. standards committee the voyage, to reduce the total dis- aimed to bring together standards- tance involved. An example is the setting work on X12, GTDI, etc. In landbridge across North America, practice this work has now been where cargo from Europe to (say) San handed over to EDIFACT. See UN- Francisco moves by sea across the JEDI. Atlantic, then by rail across the United States. However, the tendency K is simply to regard the shorter dis- tance as feeding and the longer K Popularly taken to mean 1000 (kilo). In distance as landbridging. fact K 210 which totals 1024. Hence laser scanner An optical bar code reading K in Kbit, Kbyte, Kbaud should device using a low energy laser light strictly be taken to mean x 1024, and beam as its source of illumination. the prefix k to represent 1000. Kbits Often hand-held. per second (or kbits per second) is a layer One level of the seven-layer hierar- measure of the rate of data flow chv of functions in the OSI model. across a network. LC See letter of credit. Kanban The piece of paper used in Japa- LCL See less than container load. nese JIT and QR systems. leased line A line permanently assigned to keiretsu family of companies Keiretsu connect two points, as opposed to a refers to the horizontally and verti- dial-up line which is only available cally linked industrial structure of and open when a connection is made post-war Japan. The horizontally by dialing the target machine or Glossary and Abbreviations 1 1 7 network. Also known as a dedicated assigned by a network controller or line. an EDI authentication validation less than container load A shipment of process. cargo that does not fill a container LOC See Letter of credit, ELC, LC. and is merged with cargo for more LOCODE Location Code: a UN system than one consignee or from more than which uses an acronym to describe one shipper. destination ports or harbors. less than truckload A shipment weighing log The act of centrally recording transac- less than the weight required for the tions by the systems management application of the truckload rate. function of an EDI service. letter of credit A letter of credit is a docu- log on To connect to an EDI service by ment issued by a bank stating its dialing the access number, entering commitment to pay someone (sup- user ID and password, and then being plier-exporter-seller) a stated amount authenticated as a valid user of the of money on behalf of a buyer (im- system by the EDI server. After a porter) so long as the seller meets correct log-on, the system is likely to very specific terms and conditions. respond with a menu or choice of Formally called documentary letters required actions. Also called sign on. of credit because the banks handling Low tech no tech EDI A generic for the transaction deal in documents as nonconventional low technology opposed to goods. The terms and methods of accessing EDI services. conditions listed in the credit all LTL See less than truck load. involve presentation of specific documents within a stated period of M time. The documents the buyer requires in the credit may vary, but MAC Message authentication code. See minimally include an invoice and a message authentication. bill of lading. MAF A generic term for Ministry of level Relative hierarchical position of a Agriculture and Fisheries. data segment within a message. Also mailbox A repository for messages in an used to define layers in the OSI electronic mail system or EDI server. seven-layer model. Only authorized messages are al- lex loci actus A legal rule to apply the law lowed into mailboxes. The EDI server of the place where a wrongful act authenticates each message before occurred. A court may apply this law depositing the message in the appro- in a legal action if the parties have not priate pigeonhole of a mailbox. expressly agreed to the law that will maintenance agency The accredited govern their contract and if the laws standards organization or committee of more than one jurisdiction could responsible for processing requests apply. for changes or additions to messages, lex loci solutionis A legal rule to apply the segments, and data elements and law of the place where payment is to procedures. The process is a standard be made or a contract is to be per- procedure, especially within formed. A country may apply this law EDIFACT. in a legal action if the parties have not maintenance procedure The authorized expressly agreed to the law that will process mechanism for requests for govern their contract and if the laws changes or additions to EDI mes- of more than one jurisdiction could sages, data segments, or data ele- apply. ments and related procedures light pen In a bar code system a hand-held (EDIFACT). scanning wand which is used as a mandatory A statement that a data seg- contact bar code reader. ment, data element, or component line A communication line; part of the element must be used. Used in every network. translation process (see conditional). line ID The address of a leased line as manifest The listing of goods contained on 118 Information Technology and National Trade Facilitation: Gutide to Best Practice a ship or vehicle. There are UN- and SWIFT. EDIFACT versions of the manifest message structured diagram A graphic document. representation of the message layout. many to many Applied to an EDI network message switching The circuit routing and in which many users may talk to direct transfer of a message from one many others (this is not desirable computer to another, without any without a clearinghouse). time-delay service (such as a mailbox) maritime Business pertaining to commerce or adding of value. or navigation transacted upon the sea message trailer segment Service segment or in seaports. Maritime law may be ending and uniquely identifying the administered by the court of admi- end of a message. ralty or of common law. message type Application for which a Mb Megabyte; one million bytes (eight message is designed. Also, an identi- million binary digits, or bits). fied and structured set of data ele- MBK Hungarian Bank for Foreign Trade. ments covering the requirements for a MCI A network and networking provider. specified type of transaction. A partner with BT in Concert. See MHS See message handling services. Concert. messaging A generic term for the elec- media Storage devices such as tapes (paper tronic mail family of services. Also, or magnetic), floppy disks, disks, an ordered series of characters in- even paper. tended to convey information (ISO medium exchange The process of elec- 2382/16). In EDIFACT, a set of seg- tronic data interchange whereby the ments in the order specified in a data is contained on files (tape or message directory starting with the floppy disk normally) and delivered message header and ending with the to another trading partner (say by message trailer. In EDI only selected courier) on a regular basis. data elements are used by a message, merchant A generic term for any trader. not the complete document. Applied specifically by banks to MICR Magnetic Ink Character Recogni- EFTPOS or point of sale device users. tion. Mercury Communications The deregu- MIS Management Information System. lated British carrier, set up to compete MIT Ministry of Industry And Trade. with BT. MITI Ministry of International Trade And message authentication The process Industry. involving encryption. Ensures that modem An acronym for modulator- only authorized originators and demodulator; a device for interfacing recipients exchange messages. communication equipment nodes, message code A unique reference identify- such as terminals or PCs, within ing a message type in EDIFACT. communication networks. message directory Directory of standard MOF Ministry of Finance. messages. Also, a listing of identified, MRS Material Release Schedule. The JIT named, described, and specified document used for calling off deliver- message types. ies against contracts for the automo- message handling services Generic term bile manufacturing industry. applied to X.400-facilitated services MTA Message transfer agent. An X.400 currently being planned (these have message switch which can be inter- already implemented in some coun- connected to facilitate interworking. tries). MTCW Ministry of Transport, Communi- message header segment Service segment cation, and Water Management. starting and uniquely identifying a multiplexer Somewhat like a concentrator; message in EDIFACT. a device to enable one communication message standard The sequence, at- line to be shared by several terminal tributes, and usage of data elements devices, and vice versa. within a message. Used in every kind multivendor Applied to an environment of document standards and in SITA where several different hardware, Glossary and Abbreviations 119 communication, and software an intelligent (software-defined) netwvork, vendors combine to provide a total capable of the functions of a switched service or configuration. network, of integrating various other networks and computers, and of N optimizing pathways, times, and costs. It may also be a packet swvitched NACS An automated air freight clearance netwvork, where data is assembled into system run by Japanese Ministry of packets. The nodes in this case are Finance, airlines, and forwarding PADS (packet assembly and disas- agents. sembly switches), which control the NAFTA North American Free Trade connect switches and the correct Association. sequence and routings of data packets natural language A normal spoken in a software-defined network. language, like English or French, as network management Overall supervision opposed to computer programming of the equipment and the perfor- languages, like COBOL or FOR- mance of a network. TRAN. NIST U.S. National Institute of Standards NBS U.S. National Bureau of Standards and Technology, supersedes NBS. (see NIST). node An access point in a network. See NCB National Computer Board PAD. NCC National Chamber Of Commerce nonvessel operating common carrier A negotiable instrument A written docu- carrier issuing bills of lading for ment that can be transferred merely carriage of goods on vessels which he by endorsement or delivery. Checks, neither operates nor owns. May also bills of exchange, bills of lading and be regarded as a broker. warehouse receipts (if marked NPSI An IBM proprietary product, net- negotiable), and promissory notes work processor systems interface. are examples of negotiable instru- Enables SNA to communicate with a ments. public packet switched network. nested segment A segment which di- NSA National Security Administration rectly relates to another segment in (United States). Involved in setting an identified and structured group and enforcing data encryption stan- of segments covering the require- dards. ANSI committee X9.9 is now ments for a specific message type. taking over the responsibility for nesting A technique of locating a seg- encryption standards for public ment or segments in a precise systems while NSA concentrates hierarchical position with respect to upon military needs. another segment. Used in program- NTFC National Trade Council Facilitation ming and standards setting. Committee. nesting identifier Number used to numeric character set A character set that explicitly identify level and se- contains digits and may contain quence of the repeat of a data control and special characters but no segment in a nested relationship. letters (ISO 2382/4). nesting level The position of a segment NVOC See nonvessels operating container in a nested relationship. carrier. network A physical structure of telecom- munication access paths (circuits 0 between different end users). A network may be point-to-point, that OCR Optical Character Recognition. A is, a fixed line between two access scanning process whereby characters points, thus forcing data to take may be read from paper, such as bank prescribed paths. It may be a account numbers from checks or switclhed network, where the comput- electrical account numbers from bills. ers in the network calculate the ODETTE Organization for Data by Tele- optimum data path. It may also be graphic Transfer within Europe. The 120 Informuation Teclhniology an1d National Trade Facilitation: Gutide to Best Practice original French has it: Organization dui completed merely for the duration of Donnees Echanges par Teletransmission the call (during which packets of data en Europe. ODETTE was formed to are transmitted to the next node in implement EDI in the European auto the network), and disassembling the industry. packets. X.25 is the CCITT recommen- OECD Organization for Economic Coop- dation which covers packet switch- eration and Development. A trade ing. organization for the wealthier nations PAD Packet assembly and disassembly. See of the world. network, packet switching. OFTP Open file transfer protocol. PAEB Pan American Edifact Board. on line Applied to a terminal or computer paperless payment See EFT; EFTPOS. actively connected to a computer, paperless trading EDI, the process of either directly or through a network. exchanging trading documents one to many Applied to a system in which electronically, supported by messag- a hub or central company connects to ing and various other electronic a range of trading partners, who do network services. not in turn trade with anyone else parallel processing The use of several within that network. See hub, broad- processors within a single computer cast, honeypot. system to facilitate fault-tolerant one to one Applied to a point-to-point processing. Occasionally called relationship, in a network, involving nonstop processing. two trading partners. parallel running The simultaneous use of open-routed network A switched network two systems (paper and electronic), to that has already set up the send-to- enable one to check the other. receive pathway, or a network be- parity checking An error checking tech- tween those points that is perma- nique used in programming and data nently open. communication to ensure receipt of Optus A deregulated Australian telecom- complete and valid data. munications provider. partner to partner relationship The new ORDCHG An EDIFACT message. Pur- electronic (paperless) trading rela- chase order change. tionship between trading partners in order to payment cycle The end to end an EDI network. process from receipt of an order to the passthrough Access of data to a network financial settlement of that order. by traveling across another network order to receipt cycle The end to end via gateways. process from receipt of an order to password A unique, generally six-digit, delivery of the goods against that word which identifies a specific EDI order. end user to the system. A user ID, ORDERS An EDIFACT message. Purchase system validation, and authentication order message. must also be satisfactorily entered ORDRSP An EDIFACT message. Purchase and processed and then accepted by order response. the system before messages can be OSI Open Systems Interconnection. A sent or received. The messages general-purpose standard architec- themselves are subject to compliance ture leading to application-to-applica- checking. tion communication. PAXLST A passenger manifest document codified by UN-EDIFACT, contains P names and loading information of all passengers on board a commercial packet A sequence of data structured to a aircraft. format defined by CCITT X.25 recom- payment instruments Checks, EFT, mendations. EFTPOS, credit-debit notes, credit packet switching Switching by using PAD memos, letters of credit, and so on. units to assemble data into packets, Value exchange is the generic term for switching packets over a circuit this process of replacing money with Glossary and Abbreviations 121 new technology tokens. for a different computer is said to payment terms In the EDI context, the time have been ported to the new com- delay between the acceptance of a puter. valid (electronic) delivery document POS Point-of-sale. and the specific time-data at which POTS Plain old telephone service. Voice money is received in the trading services. partner's account. Not the traditional Price Catalogue An EDI message used to payment terms, for example, 7, 14, or inquire or update on price or cata- 28 days net. With EDI, this period logue information to or from a data may be reduced to a few days. In the base. future this process will involve private domain In X.400, applied to those principles such as unchecked receipt networks which provide in-house of goods (such as, assumed receipt) word processing and in-house elec- and elimination of invoices. tronic mail. See domain; public PC Personal computer. domain. PDA Personal Digital Assistant. A hand private formats Where a honeypot or held portable or mobile computer. major company intends to implement PE UK Customs period entry declaration EDI only with its own suppliers and data entry service. customers, it may decide not to Pedi A mnemonic for the committee work implement an industry document under way to integrate EDI require- standard. In this case it develops ments into X.400 standards. something unique for the company or pilot systems An EDI system in the initial just utilizes an electronic envelope for testing phase, performed by perhaps transactions. See electronic envelope. just two trading partners. Pilot tests private key A unique key, assigned to only are utilized to check connectivity, one entity in a data encryption document standards, speed, and system. internal systems. private line A nonswitched circuit, leased PIN Personal Identification Number, used from the PTT. for ATM and debit cards access at private network A proprietary network securitv. established for a specific in-house pipeline A term used for the description of purpose; not available to other users. stock moving through the end to end pro forma When coupled with the title of supplier chain. another document (pro forma invoice, PNA Product Numbering Association pro forma manifest), it means an (U.K.). Several PNAs are active in informal document presented in coordinating EDI activities. See advance of the arrival or preparation Universal Product Code. Also see of the required document in order to ANA. satisfy a requirement, usually a PO Purchase Order. customs requirement. POD See proof of delivery. pro forma invoice An invoice provided by point to point See network; one to one. a supplier prior to sale or shipment of polling A communication control proce- merchandise, informing the buyer of dure by which a computer periodi- the kinds and quantities of goods to cally interrogates nodes in the net- be sent, their value, and important work, or terminals, to establish if they specifications (weight, size, and wish to gain access to the network. similar characteristics). A pro forma port of entry A port at which foreign invoice is used: (1) as a preliminary goods are admitted into the receiving invoice together with a quotation; (2) country by the importing country's for customs purposes in connection government. with shipments of samples, advertis- port The physical access point within a ing materials, and so on. communication controller. process improvement See continuous ported Software developed for a particular process improvement. computer which has been rewritten process reengineering The analysis of 122 Information Techinology and National Trade Facilitation: Guiide to Best Practice existing systems and processes in qualified data element A data element order to effect an improvement. whose precise meaning is conveyed product number A catalogue number, an by an associated qualifier. EAN or bar code number, or any qualifier An element of data that gives a other numeric indicator describing a qualified data element or segment a product. specific meaning. An EDIFACT term. product numbering association See ANA. qualifier code list A list of qualifier progressive data transfer A technique v alues. An EDIFACT term. allowing a sender to transfer data, as quality management The process whereby it becomes available, to the recipient quality is monitored and measured who creates, for this purpose, a and thereafter improved. TQM, or business file. Each transfer is linked total quality management, is a more by common access reference data. modern version of quality manage- promissory note Any written promise to ment. ISO 9000 is a measurement of pay. A negotiable instrument that is initial quality standards. evidence of a debt contracted by a queue Any group of items waiting for borrower from a creditor, known as a service bv a processor. The act of lender of funds. sequencing for the next process. proof of delivery Information provided to quick response Quick response systems. payer containing name of person who The use of EDI with data bases, bar signed for the package with the date coding, container and goods coding, and time of delivery. and universal product codes in fast- protocol The set of rules which defines the moving retail, apparel, and other way in which information can flow industries. within a computer or communication svstem. A protocol comprises: syntax: R commands and responses; semantics: the structured set of requests and R&D Research and Development actions permissible by each user; and R/A See Remittance Advice. timing: types of events and se- RACE R&D into Advanced Communica- quences. tions for Europe (an EU program). protocol conversion The process of en- ramping The process of adding many new abling systems to communicate with users onto a system. systems operating under a different rapporteur Person who prepares an ac- communication protocol. Such proto- count of proceedings of a committee cols include SNA and OSI. for a higher body (OED). Specifically PSA Port of Singapore Authority. applied to the EDIFACT organization; PSTN Public switched telephone network. there are now six regional EDIFACT See POTS. rapporteurs. public domain In X.400, applied to gate- RBOC Regional Bell Operating Company. ways between the networks of public read only Applied to a service in which service providers for such things as information can only be read from a electronic mail. See domain; private screen or printer, but cannot be domain. altered, nor can responding data be public key A publicly available key which, sent back down the line to the send- in connection with a private key, can ing computer. provide an extra level of addressing real time The usually brief time for data to and identifying in an encryption be entered and processed during an system. interactive session. See interactive processing. Q receiver (receiving computer) A (tempo- rarily) passive computer in an EDI QALITY An EDIFACT message. Quality network. The computer which re- data message. ceives or retrieves EDI documents, QR See quick response. directly or via a mailbox. Glossary and Abbreviations 123 release character A character used to as the internal trigger to create a new restore to its original meaning any design or custom design for a prod- character used as syntactical separa- uct. tor. RHC Regional holding company. Created Remittance Advice A message indicating by the deregulation and splitting up amount to be paid and for what of AT&T into the Bell RHCs. See telco, purpose, in response to delivery of PTT. Also known as RBOC, Regional goods or services. Bell Operating Company. remote job entry The submission of jobs RJE Remote job entry. by using a device connected to the RPQ Request for price quotation, sent by processing computer by a data link or EDI means. network. IBM 2780, 3780 are remote RSA The abbreviation for Rivost, Shamir, job entry devices. Known as RJE. Aldeman, the developers of an remote support Technical and systems asymmetrical public key encryption assistance provided over a telephone system. See DSA, encryption, or a terminal. This is now typically cryptology. the first level of support in an EDI RTEL Restrained Textiles Export License. system. See help desk. REP Request For Proposal. S repeating segment A segment which may repeat in a message as indicated in SAD Single administrative document. The the relevant message specification. official export, transit and import replenishment cycle Apropos JIT inven- customs form for international trade. tory control, time between ordering Introduced in the EEC in 1988 and stock and receiving it, with allowance also used between EEC and EFTA. for usage during the time taken for SAGITTA A natfonal Dutch customs order entry, manufacturing, and clearance vstem. delivery. SANCRT Sanitation Certificate. Request for Confirmation An EDI mes- scanner An electronic device which reads sage used for requesting acknowledg- bar codes which electro-optically ments. converts bars and spaces into electri- reroute The action of sending data to a cal signals. different node (or network of nodes) scanning fax A facsimile machine which in a circuit if the original route is also performs limited optical scan- obstructed or unusable. ning functions. See OCR. resource usage A billing method based SCP Simplified clearance procedure (for upon actual usage of computer, U.K. exports). network, storage, and so on. SDLC Synchronous data link control. An revolving letter of credit A letter of credit industry standard data communica- which is automatically restored to its tion technique. SDLC is a subset of full amount after the completion of HDLC, originally developed by IBM. each documentary exchange. See HDLC; IBM 3270, 2780/3780. RF Radio Frequency. sea waybill A transport document which is RFI Request for information, a formal not a document of title or negotiable tendering process. The next step after document. The sea waybill indicates a requirements specification. the on board loading of the goods and RFID Radio Frequency Identification. This can be used in cases where no ocean is an automatic ID device used in, for bill of lading, that is, no document of example, transponders. title is required. For receipt of the RFP Request for proposal. Usually follows goods, presentation of the sea waybill an RFI. Interchangeable with RFT. by the consignee named therein is not RFT Request for tender. The next step after required, which can speed up pro- an RFI. cessing at the port of destination. RFW Request for work. A document form SEAGHA System for Electronic and or procedure used in some industries Adopted Interchange in the Port of 124 Infornmation Techinology and National Trade Facilitation: Guide to Best Practice Antwerp, Belgium. service segment A segment required to section control segment A service segment service the interchange of user data. used within the EDIFACT standards An EDIFACT term. to separate header, detail, and sum- service string advice A character string at mary sections of a message where the beginning of an interchange necessary to avoid ambiguities in the defining the syntactically delimiting message segment content. characters and indicators used in the security A generic term generally describ- interchange. ing the methods adopted to protect service vendor See vendor. data from loss, corruption, and session See communication session. unauthorized access and retrieval. settlement The process of exchanging security fence The term given to security payment for the supply of goods. procedures in mailbox, EDI, and other ship's manifest A list, signed by the network-based systems. captain of the ship, of the individual segment A predefined and identified set of shipments constituting the ship's normally functionally related data cargo. elements which are identified by their ship's papers The documents a ship must sequential positions within the set. A carry to meet the safety, health, segment starts with a segment tag immigration, commercial and cus- and ends with a segment terminator. toms requirements of a port of call or It can be a service or a user data of international law. segment. An EDIFACT term. SHIPNET A network for EDI in interna- segment code A code which uniquely tional trade, specific to the freight identifies each segment as specified in carriage and forwarding industry. a segment directory. An EDIFACT shipper's letter of instruction A form used term. by a shipper to authorize a carrier to segment directory A listing of identified, issue a bill of lading or an air waybill named, described and specified on the shipper's behalf. The form segments. contains all details of shipment and segment name One or more words identi- authorizes the carrier to sign the bill fying a data segment concept. An of lading in the name of the shipper. EDIFACT term. shipping agent An organization which segment qualifier See qualifier. books export cargo on behalf of the segment specifications The contents, ship's operator, handles the adminis- structure, and attribute of a segment. tration of import cargo discharged An EDIFACT term. from the ship and generally looks segment tag A composite data element, in after the interests of the operator, his which the first component data ship and cargo. element contains a code which shipping instructions Information sup- uniquely identifies a segment as plied by the shipper-exporter provid- specified in the relevant segment ing detailed instructions pertaining to directory. Additional component data the shipment (for example, shipper, elements can be conditionally used to consignee, bill-to party, commodity, indicate the hierarchical level and pieces, weight, and so on). nesting relation in a message and the shipping order Instructions of shipper to incidence of repetition of a segment. carrier for forwarding of goods. segment terminator The syntax character sign on See log on. which is used to identify the end of a simple data element A data element segment. An EDIFACT term. whose data item representation separator character A character used for embodies a single concept, that is, a syntactical separation of data. data element which is not made up of server The computer at the heart of an EDI component data elements. system. See EDI server; mailbox. simple segment A segment which requires service data element A data element used no qualification, whose meaning is in service segments. fixed and explicit. Glossary and Abbreviations 125 SiSTEMI TeLEMATICA A VAN for the retail equivalent of Advanced Ship- port of Genoa, Italy. ping Note (ASN). SNM is confirma- SITA Systeme Internationale Transport tion by a retail supplier that the A&ienne (or Aeronautique), an goods have been shipped. It may also organization that provides all of the include transport details. communication and message switch- SNS Singapore Network Services ing services between international SOFI (1 and 2) A French equivalent of the airlines. SITA is actually a VAN, since U.K. Customs CHIEF system. most of the application tasks are software-defined network See network. performed by the computers belong- SOSOFA Manufacturers Association, Chile ing to the airlines themselves (SITA's special interest group See common inter- membership. SITA is represented on est group; common user group. EDIFACT committees. SPEDI Shared Project for EDI SITPRO An acronym for Simpler Trade SPIC Simplified Procedure for Import Procedures Board. Originally set up Clearance (part of DEPS). as a department within the British standard level The specific release level of Department of Trade and Industry, a standard, effective at a given date. the organization now operates com- A new release occurs once or twice a mercially. SITPRO's task was to year. design a universal set of documents standards The rules which are laid down to be used by British industry in- to enable incompatible computers and volved in import and export. It now communication systems to exchange offers software for document transla- information and to enable document tion and is represented on EDIFACT types to be exchanged. See ANSI, committees. CCITT, UN/EDIFACT, document slack See float. standards, message. smart card A card shaped device contain- store and forward The term commonly ing electronic contacts, electronic applied to a messaging system (such memory and a miniature processor. as, electronic mail) where a message SME Small and medium enterprise, as is stored before delivery to a third used in data gathering and research party. The term implies that the reports by various government mailbox system itself performs departments. delivery to the addressee, that is, SMMT The (U.K.) Society of Motor Manu- direct delivery. This is the key differ- facturers and Traders, the organiza- ence between store and forward and tion which represents British auto store and retrieve. In point of fact manufacturers. SMMT commissioned most mailbox systems allow retrieval the first auto-specific EDI scheme, in and perform direct delivery. Provided close coordination with ODETTE. there is a time delay induced by the SNA Systems Network Architecture. An mailbox system, they are both accept- IBM proprietary communication able services under most telecommu- protocol. Although a defacto stan- nication regimes. dard, employed by 30,000 IBM hosts store and retrieve Applied to a system in around the world, SNA does not yet which a message is sent to a mailbox conform to ISO standards as does and resides there until retrieved by OSI, since SNA was developed on the the addressee, or possibly by being basis that it would be talking only to purged to an archive file if the mes- IBM hosts, with leased lines between sage lies dormant for, say, four weeks. them. Sophisticated additional Purging routines vary with the software is required by an IBM system being used. communication controller to use an suite (of programs) A series of computer X.25 packet switched network, programs which interact with each enabling SNA to operate in a polling other. manner. See NPSI, polling, X.25. summary area The portion of the message SNM Ship Note Manifest. The ANSI X12 following the body of the message 126 Information Technology and National Trade Facilitation: Guide to Best Practice and which contains summary infor- scene for anticipated changes induced mation relating to the entire message. by paperless methods of performing supply chain All organizations involved in the same task. Changes will include the production cycle from raw mate- clerical tasks, job functions, computer rial right the way through to retail systems, possibly even office loca- organizations. tions. supply cycle The lead time between placing one order and the next. See T JIT. support The assistance necessary to install, table-driven program A program in which test, and fully implement a system. the factors, variables, data, etc. to be Support includes consultancy advice, used are looked up from a table or software provision and installation, matrix, held on a file or in memory. education, training, fault diagnosis tag A unique identifier for a segment or and correction, help desk, and so on. data element. An EDIFACT term. Not everyone needs cradle to grave target computer The computer for which a support, but, in the early stages of specific message or file is intended. In EDI, more rather than less support is EDI systems this could be sent direct likely to be necessary. from computer to computer or via the SWIFT Society for Worldwide Interbank intermediary of a mailbox system. Financial Telecommunications. SWIFT Data volumes determine the method is a VAN originally set up by banks used. See host to host. for the purpose of international EFT. TARIC The EC's Integrated Customs Tariff, SWIFT now has over 3000 members, based on HS. See EC, HS. is a full-fledged multidocument tariff A schedule of duties or taxes as- (financial) EDI system, and has sessed by a government on goods as codified over 150 message types. they enter (or leave) a country. Tariffs switched network See network. may be imposed to protect domestic sync (synchronous) A clock-controlled industries from imported goods and method of data transmission for use to generate revenue. Types included in high-speed circuits or networks. ad valorem, specific, variable, or See bisync, async. compound. syntax rules Rules governing the structure TC 154 Technical Committee 154, a UN of an interchange and its functional committee affiliated with UNECE groups, messages, segments, and data WP.4 for the purpose of agreeing on elements. EDIFACT document standards system administration The function of through ISO. allocating mailbox addresses, user ID, TDB Trade Development Board. passwords; checking security rou- TDCC Transportation Data Coordinating tines; bulk printing; conducting audit Committee. An early (1960s) stan- routines; housekeeping; gathering dards-setting committee, established statistics; billing; etc. to assist American transportation system interconnect See network; integra- modes coordinate EDI standards for tion. air, motor, rail, and ocean transporta- systems integration See network. tion. systems management The tasks involved TDED UNECE Trade Data Elements in keeping a network in service and Directory. providing access to valid users. It also TDI Trade Data Interchange, directory involves security, logging, and developed by UNECE. See GTDI. providing statistics, billing, and TDL A Scandinavian trade facilitation central services such as printing. It organization. embraces systems administration TEDIS An EC and EFTA program to within its function. promote the use of EDI. Trade Elec- systems study A review of existing inter- tronic Data Interchange System. nal methods of operation to set the telco An American acronym for telephone Glossary and Abbreviations 127 company (a carrier or PTT). Basi- time delay system A network-based cally the national, regulated carrier system where, as a consequence of o. (now) in the case of the United adding value to a message, a time States, since the breakup at AT&T, delay is added. For example, EDI or a an RHC (or baby Bell). See deregula- mailbox electronic mail system. tion. time slot The time set by communicating Telecom Gold British Telecom electronic computers during which they will mail and X.400 messaging systems. exchange data. telecommunication (also comms or time-out Occurs when time limit estab- telecoms) The use of a network for lished for a certain action, for ex- the transmission of voice, data, or ample, receipt of a message, has been image. All that is implied by the exceeded. The message is rejected and switching process. The generic name the end user is so informed. Some for remote communication using systems allow only a certain time modern technologies. between accessing a mailbox and telematics The technological area of sending a message. If the mailbox is overlap between data processing open for, say, 5 minutes, and a mes- and data communications. sage has still not been sent, the telephony The engineering science of computer will disconnect the mailbox converting voice into electrical with an appropriate message to the signals and reconverting them to terminal operator. This is for both voice. security and economic reasons. teleprinter A printer used (now) gener- time-sharing The original term given in ally remotely as a telegraph, telex, the late 1950s to the technique which or limited-character-set printer. enables multiple users to simulta- Early computers used them as neously access a large computer consoles and system printers. without being aware of each other. As teletex An attempt to provide a black box the cost of computing declined, approach to solving problems of especially after the PC was intro- incompatible devices. New network duced, time-sharing services gradu- and software technology, together ally fell from favor, but with mailbox with standards development, has services, MHS, EDI, and the like, caused a very low acceptance rate of time-sharing principles have made a teletex services. comeback. Telstra The rebadged Telecom Australia. TQM Total Quality Management. The terminal (i) A point where data can either current term for the Quality Assur- enter or leave the network. See DCE, ance and Quality Measurement DTE. movement. (ii) An area at the end of a rail, ship, tracer A request upon a transportation line air or truck line which serves as a to trace a shipment for the purpose of loading, unloading and transfer expediting its movement or establish- point for cargo or passengers, and ing delivery. often includes storage facilities, track and trace (i) The use of bar codes or management offices and repair other AID technologies to monitor the facilities. movement of goods from end to end. time charging A method of charging for (ii) A carrier's system of recording the use of network which calculates movement intervals of shipments charges on the basis of network from origin to destination. connect time rather than a flat fee. Tradacoms Message standards for data time definite delivery Range of service interchange between major U.K. performance standards offered by retailers and their suppliers. Devel- air freight carriers which permit the oped by the ANA, it utilizes much of customer to select a specific time the UN-EDIFACT and GTDI syntax frame for delivery based on require- and standards. ments for service and economy. trade clusters A grouping of interested 128 Infornmation Technolog,y and Nationial Trade Facilitation: Gutide to Best Practice trading partners, generally for inter- given period of time. See resource national trade. See facilitation. usage. trade facilitation See facilitation. transaction set identifier Synonym for trade management The logistics and message code. systems involved in managing the transaction set In EDI standards, the name supply chain. given to a complete trading document trade terms The terms of a sale. The setting sent electronically. Also known as a of responsibilities of the buyer and message. seller in a sale, including: sales price, transaction set trailer Synonym for mes- responsibility for shipping, insurance sage trailer. and customs duties. The most widely transactional voice response A voice used trade terms are Incoterms 1990, services technology which enables a published by the ICC. computer connected to a voice net- Tradegate An Australian trade facilitation work to collect information in order organization comprising QANTAS, to process it. shipping and container companies, transcription errors Mistakes and omis- Australian Customs, and a variety of sions caused by copying information traders and industry bodies. from one document to another, Tradelink The Hong Kong EDI trade whether done clerically or via a facilitation organization. See keyboard. HOTLINE. transfer A communication from one Tradenet A Singapore EDI trade facilita- partner to another. tion service. translation package A software package TradeVan A Taiwanese EDI trade facilitat- which performs a function of convert- ing body. ing custom data to specific EDI trading bodies See industry bodies. standard formats. trading partner agreement A generic term transmission rates See baud, bps. for a contract describing new elec- transmittal letter A list of the particulars tronic terms and conditions of trad- of a shipment and a record of the ing. documents being transmitted together trading partner Suppliers or clients in any with instructions for disposition of trading relationship. documents. Any special instructions trailer Data at the end of an EDI message are also included. indicating the conclusion of the transparent A commonly used computer message. term which refers to technically transaction A single completed transmis- difficult environments which are not sion, for example, the transmission of apparent to the end user, who for a single invoice over an EDI network. example, may be sending a message This is no different from data process- from an IBM system to a mail box ing usage, where a transaction could system for subsequent retrieval by a be an inquiry or a whole range of Unisys computer. The user should not updates and trading transactions. The be aware of the work involved in definition is important for interpreta- making this possible. The difficulties tion of invoices from EDI service should be transparent to the end user. operators. transponder A device containing RFID transaction header Control information at technology. the beginning of any EDI message. transport A generalized term for the The transaction header includes function of a network, that is, the electronic addresses and information network transports data. on the type of transaction which transport documents All types of docu- follows. ments evidencing acceptance, receipt transaction pricing A charging and billing and shipment of goods. Examples: bill system based upon the numbers of of lading; ocean bill of lading; air transactions of different types pro- waybill; rail waybill; dock receipt; cessed by the EDI system, over a and so on. Glossary and Abbreviations 129 transpotel An international freight market internationally recognized codifica- information system operating in U.K. tion of rules unifying banking prac- and Europe. tice regarding documentary credits set up by a working group attached to U the ICC. Uniform Rules for Collections The inter- U.K. United Kingdom. nationally recognized codification of U.S. United States of America. rules unifying banking practice UA User agent. A term in X.400 to describe regarding collection operations for the protocol for user access to MHS. drafts, their payment or non-pay- UCC See Universal Commercial Code. ment, protest and for documentary UCP See Uniform Customs and Practice. collections. Set up by a working UCS Uniform Communications Standard. group attached to the International An X12 subcommittee on document Chamber of Commerce (ICC). standards for the grocery industry in uninterrupted power supply Special the US. backed-up power supplies for com- UIC International Union of Railways. puter systems which ensure that UIRR Union of International Rail and current keeps flowing to the com- Road Transport. puter. UN United Nations. unit load device Term commonly used unattended mode Operating without when referring to containers and manual (operator) intervention. pallets. UNCID The ICC'S Uniform Rules of unit load The strapping or banding to- Conduct for Interchange of Trade gether of a number of individual Data by Teletransmission. cartons, packages, sacks, drums or UNCITRAL United Nations Commission other cargo, often on a pallet, in order on International Trade Law. to create a single unit. UNCTAD United Nations Conference on unitization The practice or technique of Trade and Development. consolidating many small pieces of UNECE United Nations Economic Com- freight into a single unit for easier mission for Europe. handling. UNECE WP.4 United Nations Economic UNIVAC The original name for Sperry Commission for Europe, Working Univac, later Sperry. One of the first Party No. 4. Part of the EDIFACT commercial computers. organization. Universal Product Carton Code See ANA, UN-EDIFACT United Nations EDI for UPCC. Administration, Commerce and Unix A widely used computer operating Transport. See EDIFACT. system. UN-GTDI UN Guidelines for Trade Data UN-JEDI United Nations Joint Electronic Interchange. See GTDI. Data Interchange committee working UNICORN An EDI project for ferry sailing on converging European and North in Europe. American EDI standards. The com- UNIDO United Nations Industrial Devel- mittee proposed and is developing opment Organization. the EDIFACT standards. Uniform Commercial Code A set of UNSM United Nations Standard Message. statutes purporting to provide some An international message which has consistency among states' commercial been approved by the UNECE. laws. It includes uniform laws deal- UNTDED UN Trade Data Element Direc- ing with bills of lading, negotiable tory (developed by the UNECE). instruments, sales, stock transfers, Identical to ISO 7372. trust receipts, and warehouse re- UPCC Universal Product Carton Code, a ceipts. standard administered by UCC Uniform Customs and Practice Full name: (Universal Code Council of USA). Uniform Customs and Practice for UPS See uninterrupted power supply. Documentary Credits (UCPDC). The URC See Uniform Rules for Collections. 130 Informationi Teclinology and National Trade Facilitation: Gutide to Best Practice user data segment A segment containing standard. Can also widely be applied application data. An EDIFACT term. to software, to standards, and to USS Uniform Symbol Specification. The documentation. series of symbology specifications VICS Voluntary interindustrv communica- published by Automatic Identity tion standards, document standards Manufacturers around the world. in use by supermarkets, retail indus- tries, and so on. V VMI Vendor Managed Inventory. A pro- cess by which inventory is owned bv V. Series A series of recommendations by the supplier until a point designated CCITT governing data transmission by the purchaser of those supplies. over telephone circuits. voice messaging A generic term for voice VADS See Value Added Data Service. services implying the store and validation The process of checking forward of particular messages. whether a document is the correct voice recognition Technologies which type for a particular EDI system and recognize individual components of whether it comes from and is going to speech it then digitizes them and an authorized user. All of the editing either stores or manipulates them for and syntax checking involved in later use. standards conformance. See compli- voice response A voice recognition service ance checking. whereby recognized sounds or tones value chain A chart illustrating the addi- generate selected automatic responses tion of value, not cost, throughout the from the voice service. supply chain. voice services The generic which covers all value exchange In context with goods voice related value added services. movement and information exchange, this term refers to the payment cycle W and new payment methods. value-added data service A network-based waybill Document prepared by a transpor- data service which adds significant tation line at the point of shipment, value to the basic function of carriage showing the point of origin, destina- or message switching, provided by a tion, route, consignor, consignee, PTT. An EDI service is considered to description of shipment and amount be a VADS. charged for transportation services, value-added network The hardware, and forwarded with the shipment, or particularly communication systems, direct by mail, to the agent at the which facilitate a VADS. A VAN does transfer point or waybill destination. not provide application processing WCO World Customs Organization. The capability; that is provided by other new incarnation of the Customs systems connected to the VAN. Cooperation Council. See CCC. value-added service An earlv name for Windows A personal computer operating VADS; VAS can apply to voice, data, system. and image services. Broadly speaking, WINS An X12 subset. Warehouse Informa- only data VAS (VADS) is approved in tion Network Standards. Applies to most countries at the moment. grocery warehouses and refrigeration VAN See value-added network. warehouse document standards. See VAS See value-added service. ANSI; UCS. vendor The commonly accepted computer- wire services News services, originally electronics jargon for sales organiza- based on telex but now screen-based. tion. Hence IBM is a computer ven- Service providers include Reuters, AP, dor, a PTT is a service vendor. UPI, etc. verification See compliance checking, WP.4 See UNECE WP.4. validation. WTO World Trade Organization. The new version number Number used to identify incarnation of GATT, General Agree- the particular release or version of a ment on Tariffs and Trades. Glossary and Abbreviations 131 x X. Series A confusing label. X applies to either a committee setting a standard or the standard itself. For example, ANSI has, among many, the following committees: X3 for FORTRAN up- grades, X9.9 for data encryption standards, and X] 2 for EDI. CCITT has X.25 for communication recom- mendations and has X.400 for mes- saging recommendations. The X followed by a dot refers to CCITT recommendations. The absence of a dot implies an ANSI ASC committee prefix. See ANSI; CCITT; ISO. Note: ISO has its own series of alternate numbers for CCITT recommenda- tions. X modem A protocol used in conjunction with a PC to protect the transmission of data across a dialed-up line. It is also called X.PC by some network operators. 132 Information Technology and National Trade Facilitation: Guide to Best Practice Distributors of World Bank Publications ARGENTINA DENMARK JAPAN SINCAPORETAIWAN Carlos Hirch SRL Sarfundscltterstur EaternBookServic Gower Asia Pacific Pti Ltd Galeris Guemes RorenoerrAllA 11 Hongo 3-Chome, Buniyo-ku 113 GoldenWheelBuildlng Flonda I65.4thFloorOfc. 453/465 DX-1970 FrederiksbergC Tokyo 41. KsllangPudding, #0403 1333 Buenos Aires SingaporeS134 EGYPT, ARAB REPUBUC OF KENYA Oficm del Libro Internmaonrl AlAhran Africa Book Service (EA.) Ltd. SLOVAKREPUBLUC Alberti 40 AlGalaiStreet Quarai House, Mfangzs St. SlovsrtG.T.G.Ltd. 1082BuenosAires Cairo P.O. 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Box ST 125 RECENT WORLD BANK TECHNICAL PAPERS (continued) No. 275 Heggie, Management and Financing of Roads: An Agendafor Reform No. 276 Johnson, Quality Review Schemesfor Auditors: Their Potentialfor Sub-Saharan Africa No. 277 Convery, Applying Environmental Economics in Africa No. 278 Wijetilleke and Karunaratne, Air Quality Management: Considerationsfor Developing Countries No. 279 Anderson and Ahmed, The Casefor Solar Energy Investments No. 280 Rowat, Malik, and Dakolias, Judicial Reform in Latin America and the Caribbean: Proceedings of a World Bank Conference No. 281 Shen and Contreras-Hermosilla, Environmental and Economic Issues in Forestry: Selected Case Studies in India No. 282 Kim and Benton, Cost-Benefit Analysis of the Onchocerciasis Control Program (OCP) No. 283 Jacobsen, Scobie and Duncan, Statutory Intervention in Agricultural Marketing: A New Zealand Perspective No. 284 Valdes and Schaeffer in collaboration with Roldos and Chiara, Surveillance of Agricultural Price and Trade Policies: A Handbookfor Uruguay No. 285 Brehm and Castro, The Marketfor Water Rights in Chile: Major Issues No. 286 Tavoulareas and Charpentier, Clean Coal Technologiesfor Developing Countries No. 287 Gillham, Bell, Arin, Matthews, Rumeur, and Heam, Cotton Production Prospectsfor the Next Decade No. 288 Biggs, Shaw, and Srivastiva, Technological Capabilities and Learning in African Enterprises No. 289 Dinar, Seidl, Olem, Jorden, Duda, and Johnson, Restoring and Protecting the World's Lakes and Reservoirs No. 290 Weijenberg, Dagg, Kampen Kalunda, Mailu, Ketema, Navarro, and Abdi Noor, Strengthening National Agricultual Research Systems in Eastern and Central Africa: A Frameworkfor Action No. 291 Valdes and Schaeffer in collaboration with Errazuriz and Francisco, Surveillance of Agricultural Price and Trade Policies: A Handbook for Chile No. 292 Gorriz, Subramanian, and Simas, Irrigation Management Transfer in Mexico: Process and Progress No. 293 Preker and Feachem, Market Mechanisms and the Health Sector in Central and Eastern Europe No. 294 Valdes and Schaeffer in collaboration with Sturzenegger and Bebczuk, Surveillance of Agricultural Price and Trade Policies: A Handbookfor Argentina No. 295 Pohl, Jedrzejczak, and Anderson, Creating Capital Markets in Central and Eastern Europe No. 296 Stassen, Small-Scale Biomass Gasifiersfor Heat and Power: A Global Review No. 297 Bulatao, Key Indicatorsfor Family Planning Projects No. 298 Odaga and Heneveld, Girls and Schools in Sub-Saharan Africa: From Analysis to Action No. 299 Tamale, Jones, and Pswarayi-Riddihough, Technologies Related to Participatory Forestry in Tropical and Subtropical Countries No. 300 Oram and de Haan, Technologiesfor Rainfed Agriculture in Mediterranean Climates: A Review of World Bank Experiences No. 301 Edited by Mohan, Bibliography of Publications: Technical Department, Africa Region, July 1987 to April 1995 No. 302 Baldry, Calamari, and Yameogo, Environmental Impact Assessment of Settlement and Development in the Upper L6raba Basin No. 303 Heneveld and Craig, Schools Count: World Bank Project Designs and the Quality of Primary Education in Sub-Saharan Africa No. 304 Foley, Photovoltaic Applications in Rural Areas of the Developing World No. 306 Muir and Saba, Improving State Enterprise Performance: The Role of Internal and External Incentives No. 309 The World Bank/FOA/UNIDO/lndustry Fertilizer Working Group, World and Regional Supply and Demand Balances for Nitrogen, Phosphate, and Potash, 1993/94-1999/2000 No. 310 Edited by Elder and Cooley, Sustainable Settlement and Development of the Onchocerciasis Control Programme Area: Proceedings of a Ministerial Meeting No. 313 Kapur, Airport Infrastructure:The Emerging Role of the Private Sector No. 316 Schware and Kimberley, Information Technology and National Trade Facilitation: Making the Most of Global Trade E THE WORLD BANK A partner in strengthening economies and expanding markets to improve the quality of life for people everywhere, especially the poorest Headquarters European Office Tokyo Office 1818 H Street, N.W. 66, avenue d'1ena Kokusai Building Washington, D.C. 20433, U.S.A. 75116 Paris, France 1-1, Marunouchi 3-chome Chiyoda-ku, Tokyo 100, Japan Telephone: (202) 477-1234 Telephone: (1) 40.69.30.00 Facsimile: (202) 477-6391 Facsimile: (1) 40.69.30.66 Telephone: (3) 3214-5001 Telex: MC164145 WORLDBANK Telex: 640651 Facsimile: (3) 3214-3657 MCI 248423 WORLDBANK Telex: 26838 Cable Address: INTBAFRAD WASHilNGTONDC World Wide Web: http://www.worldbank.org E-mail: books@worldbank.org 9 780821 335345 Cover design by Beni Chibber-Rao ISBN 0-8213-3534-0