'Net Buying Standard Took a While

The open buying on the Internet (OBI) standard -- designed to help companies procure high-volume, low-cost goods and services online -- got a shot in the arm this week at the Internet Commerce Expo in Los Angeles, when major backers made a case that the standard finally is ready for prime time. But the small number of pioneering adopters has had to be patient. They have coped with an oft-changing specification, waited for software vendors to make their products OBI-compliant and wrestled with OBI's digital certificate recommendation, which can be costly and difficult to support.

The open buying on the Internet (OBI) standard -- designed to help companies procure high-volume, low-cost goods and services online -- got a shot in the arm this week at the Internet Commerce Expo in Los Angeles, when major backers made a case that the standard finally is ready for prime time.

But the small number of pioneering adopters has had to be patient. They have coped with an oft-changing specification, waited for software vendors to make their products OBI-compliant and wrestled with OBI’s digital certificate recommendation, which can be costly and difficult to support.

“Every time we would think we were finished, the spec would change,” said Terry Pavone, manager of emerging technologies at Boise Cascade Office Products Corp. in Itasca, Illinois.

The OBI Consortium’s release of a more stable 1.1 standard in June, 13 months after the emergence of the 1.0 specification, and the arrival of a tool kit from Epic Systems Corp. in Madison, Wisconsin, have helped to alleviate some of the programming woes for Boise Cascade, which has a homegrown electronic system for processing customer orders.

Analysts said more companies, particularly on the buying side, are likely to turn to packaged software from companies such as Ariba Technologies Inc., Commerce One Inc., IBM, Microsoft Corp. and Netscape Communications Corp. But the vendors’ OBI-compliant offerings just started to hit the market.

United Technologies Corp. has been a member of the OBI Consortium for some time and would like to implement the standard. But the Hartford, Connecticut-based manufacturer has outsourced to IBM US$6 billion of the annual purchasing that isn’t related to its manufacturing business, and IBM didn’t have an OBI-compliant offering on the buying side. “We’re waiting for IBM to take the next move,” said Daniel O’Malley, manager of purchasing at United Technology’s Research Center in East Hartford, Connecticut.

Among user companies, suppliers are still waiting for buyers to get up to speed, and vice versa. Both potentially stand to benefit from OBI. A buying company will be able to place orders with a selling company without having to host the supplier catalog on its intranet or make proprietary adjustments to its procurement software.

Some suppliers, such as Boise Cascade and Office Depot Inc., have been managing business rules and approval processes for customers who don’t want the hassle or expense of setting up an Internet purchasing system. If they could off-load that management to customers -- as OBI would allow -- that would lessen their load.

Digital certificates are a key to OBI working well. They can store more information -- organization, job title, purchasing authority -- than a simple user name/password authentication mechanism allows. Buying companies can maintain the user profiles in one place, and if they choose to deal with many suppliers over the Internet, they won’t have to change the profiles on a supplier-by-supplier basis.

However, acceptance of digital certificates has lagged because of the cost of issuing them, the complexity of managing them and problems with interoperation, said Roy Satterthwaite, an analyst at Gartner Group Inc. in Stamford, Connecticut. “Certificates just haven’t taken off as expected,” he said.

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