Viacore to unlock standard language for supply chains

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Fadi Chehade was b-to-b before b-to-b was cool.

Three years ago, Chehade led the groundbreaking computer industry effort, dubbed RosettaNet, to create a standard way for manufacturers, distributors and resellers to connect their supply chains through the Internet.

Though the effort was successful in defining a collection of extensible markup language dialogues for standard buyer-seller interactions, individual companies have been slow to adopt the standards.

Now, Chehade hopes to help the industry move from planning the standards to implementing them as founder and chairman of Viacore Inc., which this summer began delivering an innovative technology platform to make good on RosettaNet's promise.

RosettaNet itself is looking to corner a larger piece of the b-to-b marketplace. At its user meeting earlier this month in Chicago, the group--which until now had focused solely on the computer and electronics industry--voted to expand its efforts to help streamline the auto industry supply chain. In particular, the group plans to focus on automating interactions between auto manufacturers and dealers.

Viacore's Chehade said he strongly believes RosettaNet's pioneering work can help other industries jump-start their e-commerce efforts.

The b-to-b pioneer also has strong opinions about now-ubiquitous e-marketplaces, which he believes are focused too much on automating simple transactions and not enough on the tougher business of helping companies partner and collaborate via the Internet. "I chuckle when I hear announcements that today's marketplaces are going to change the world," Chehade said.

But first, some history

Back in late 1997, Chehade and marketing partner Linda York were at tech distributor Ingram Micro, a company at that time facing the prospect of crafting Web-based links with more than 2,000 partners. In particular, he remembers a deal with vendor 3Com Corp. and computer retailer CompUSA to integrate their respective shopping carts at a cost of half a million dollars.

"We were getting beaten up by companies wanting to do it their way," Chehade recalls. "I basically told our management I had enough. We're going down a slippery path here."

So Chehade and York hatched RosettaNet. The group crafted a series of standards for how computer industry supply chain partners could link their systems together. It was not just about swapping data but what Chehade calls "process integration." Companies had to take the very ways they did business--their detailed processes for handling a purchase order, for example--and replicate them through the Internet.

The participating companies--including Ingram Micro, Arrow Electronics Inc., Avnet Inc. and many others--made swift progress. But not every company understood how big a commitment the effort involved, and different flavors or dialects of the RosettaNet standards emerged, slowing adoption.

So Chehade and York formed Viacore, moving from crafting the would-be standards to putting them into effect. The company's new platform, Marketplace ProcessSwitch, lets users access what it calls ProcessTone. Like a dial tone, ProcessTone lets users on the network interact with each other through a single "call."

Saving millions

Distributor Arrow Electronics is counting on ProcessSwitch to help it "save millions of dollars and dramatically increase our responsiveness" with its trading partners, according to CEO Stephen Kaufman. Arrow maintains hundreds of thousands of individual SKUs and processes millions of transactions each day, making a standard way of doing e-business a requirement, Kaufman said.

Greg Monty, senior VP-Internet business development for Avnet, another PC distributor said, "In our perspective, one of the few remaining bastions of savings in the supply chain is the integration of processes across different companies."

Indeed, ProcessTone enables more than mere buying and selling. By integrating processes, companies can share real-time process information about new product announcements, pricing actions, product life cycles, inventory status, shipping information and more. In short, it's not just e-commerce but e-collaboration, Chehade said.

Chehade's vision of b-to-b was born before the e-marketplace revolution flared and has grown up alongside it. Can the two visions coexist? Chehade thinks they must if e-marketplaces are to move beyond enabling things such as Web-based procurement and online auctions to assisting deeper collaboration between companies.

"Without RosettaNet or something like it, these marketplaces need to reinvent what RosettaNet did," he said.

Processes matter

Avnet's Monty doesn't see marketplace conversations, which he said are still conceptual at this point, as derailing RosettaNet. "The heart of making marketplaces work will not be who are the members, but what are the industry's processes and how efficiently can they be run through the marketplace," he said.

Geoffrey Bock, an analyst with Patricia Seybold Group, said RosettaNet remains a very important initiative, adding that the effort "ratcheted up the seriousness" of b-to-b e-commerce.

But, he said, whether industries end up working through e-marketplaces, a central hub such as Viacore offers or some other construct "really depends on the culture of the industry."

Chehade has had talks with tech industry marketplaces such as and about his vision. So far, the marketplaces have paid lip service to using RosettaNet standards, but Chehade hopes his entire Viacore ProcessTone can serve to underpin these and other marketplaces.

"What we are proposing to them is they do the front-end and we'll do the back-end," he said. "Simply building an exchange is putting the cart before the horse."

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