Following up on my previous post regarding the movie filming at our HQ, a colleague at GXS sent this picture from our fifth floor balcony. He thought it would be good to actually show some of ‘their’ supply chain.

Last night the filming for an upcoming movie starring Leonardo DiCaprio and Russell Crowe was in full swing at GXS headquarters.   It was quite the scene.   I’ll admit I was a little worried that our vice president of global product management was going to join the paparazzi.  You can learn more about the movies at the IMDb.

I could not help but compare the shear elegance of their efforts with that of our customers and their massively diverse supply chains.   Some 200+ actors, extras, set construction works, security, and others pulled together their production with synchronous beauty.   Our customers - torn by two great opposing forces, increasing globalization of supply with still prevalent localization of demand - aim for the same synchronous, flawless execution.

It reminded me of our 2007 advertising campaign that shares similar stories.  So much goes on ‘behind-the-scenes’ of supply chains to pull together the perfect toy, car or clothes.

This one titled “Supply chain integration is what you don’t see.  A flawless performance is what captivates you” shows the immense behind-the-scenes efforts to pull off the perfect show.

Another great one shows the perfect bike for the perfect customer…a happy kid.  Titled “Chain from China. Tires from Texas. P.O. from Peru.  We put all the pieces together.”

In essence this is what Supply Chain and B2B Outsourcing is all about.   Its about helping customers pull off the perfect product…the perfect performance…for the perfect customer.     You can see the whole campaign at www.gxs.com/gxs and click GXS 2007 Advertising Campaign.   I hope you like them as much as I do.  We really tried to convey the aspirations of our customers, the emotions from their success, recognizing the immense ‘behind-the-scenes challenge they face everyday.

This hour Microsoft launched an important release to BizTalk Server 2006, called R2.  Don’t ask me why they did not just call it BizTalk Server 2007.  At this point, they could have even pulled off 2008.  Frankly, the release is significant enough in my mind.  Certainly, the hours we put behind developing automated interfaces with GXS Trading Grid warrant it.  But, R2 works. 

One thing that is particularly cool in the new version is the automatic fashion by which a BizTalk user can synchronize trading partner information automatically with their customers on-line via GXS Trading Grid.   Embedded, pre-configured Web services make requesting, formalizing, mediating and testing a new trading partner relationship a snap.  It really is as simple as the great ‘1-Click’ Amazon Prime feature or the easy-to-use ‘Accept’ button on LinkedIn.  It’s called GXS Trading Grid for BizTalk Server.

When Microsoft selected GXS Trading Grid in 2006 as its recommended network for BizTalk Server, we simultaneously took the opportunity to work with BizTalk with equal enthusiasm.  After all, BizTalk is the most popular integration software package in the market, with (my guess) 40% market share by number of customers.   **Note, Microsoft highlights GXS on the new BizTalk R2 home page in several places (http://www.microsoft.com/biztalk/default.mspx) including support for GXS Trading Grid for BizTalk Server and recognition of our gold medal ‘Power of Partnerships’ award from START-IT Magazine!

What does this mean practically?  A customer using Microsoft BizTalk to integrate their internal business applications can – via a single connection to GXS Trading Grid – integrate with one, ten, hundreds, or thousands of trading partners regardless of the protocol (http, ftp, AS2, etc) and message formats (EDI, RosettaNet, CIDX, PIDX, etc) required by each partner.  Last week, we helped one BizTalk customer, for example,  easily integrate with a set of partners requiring support for TRADACOMS – an EDI standard popular in the UK. 

In B2B integration, exciting times are just beginning.

There is an air of excitement that hits every September coming off the heels of August, and this one is no exception.  With the kids back in school and vacations now seemingly a distant past, I am feeling compelled to write down a bit about why this year feels better than ever.  As one GXS developer said in the hall yesterday, it feels great busy making history.

Of course, with the filming in-progress of an upcoming Leonard DiCaprio and Russell Crowe film at our headquarters, that can makes things feel really different.  No joke.    Our global headquarters is a massive 300,000 square foot facility on a beautiful lake providing an awesome setting reminiscent of the large  CIA complex.  I don’t think any GXS’er has made the cast yet, though I am sure there are a hopeful few.

The GXS Trading Grid is really showing its strength.   From reliability offering as many 9’s as customers need, to speed offering custom forms, maps, business rules development in days versus weeks, to performance with dual-continent data replication or akamai-zed web front ends, to flexibility with ‘plug-in’ integration for JMS, SAP, Ariba, Microsoft Dynamics, Quickbooks and more, the technical infrastructure is unmatched.    

But, it’s the functional capabilities that are most exciting as they solve real business problems for our customers.  With our ‘Program-the-Grid’ initiative, we have made it easy to extend our services across any externalized process.   For example, in Logistics our teams are extending visibility across data flows representing container conditions, booking activity, BOL instructions and more for several new big customers in Japan, the U.S. and the U.K.   Ah, perhaps a global trend!  (Note Ryan Kraudel’s presentation at EDIFICE 102th Plenary today: http://www.gxs.com/gxs/newsroom/pr/2007/09062007.htm) soon to be posted on edifice.org.).    Other processes making major advancement include invoice automation and compliance, payments visibility, and trade visibility.

Our service delivery organization with well over 500 people operating multiple centers of excellence and providing 24×7 global process orchestration and monitoring, are broadening our managed services capabilities every day.   (Note more managed services momentum with Fairchild Semiconductor http://www.gxs.com/gxs/newsroom/pr/2007/09052007.htm).    Some of their new tools are really exciting…for example, our Business Activity Monitoring team has just deployed  a new complex event processor …which helps the team immediately make sense of supply chain activity and to identify important exceptions for activity that did…or did not…happen on behalf of our customers!

We will unveil many of these innovations across our technology, people and processes in our Trading Grid 2008 launch.   Until then, there is arsenal of activity about to be unleashed to take B2B integration-as-a-service to the next level.  Stay tuned.

Earlier this year, GXS embarked on several fronts to dramatically improve end user performance for global supply chains, especially in emerging geographies, such as BRIC countries (Brazil, Russia, India and China). We did this not to address any particular shortcomings, but to address the opportunity to ensure a high-performance supply chain end-to-end. The key to adoption across global supply chain participants - small and large - is (surprise, surprise) a great end user experience. As easy as Google. As useful as Excel. As enjoyable as the iPhone. And so on.

A little over a month ago we announced our global alliance with Verizon Business, which gave us a powerful underlying network between our data centers and beyond. And today, we unveiled the results from recent efforts to Akamaize various Web-based applications and tools on GXS Trading Grid. The result has been nothing short of tremendous. In less than six months, we have seen performance improvements in excess of 40% for global supply chain users. In fact, for GXS Trading Grid customers in Guangdong, China , we doubled the performance and responsiveness of the applications they depend on to collaborate with their U.S. retailers. And, their U.S. retailers depend on this automation for their competitive advantage.

This performance boost for GXS Trading Grid applications, such as GXS Order Lifecycle Visibility and GXS Logistics Visibility, is nothing short of a religious experience for end users. Speed matters. The success of their business and their customers business depends on it. And, I have the customer emails to prove it!

Partnerships are so often underappreciated.     No doubt this perception comes from the mass of ‘barney partnerships’ that accurately characterize many relationships that are void of any real commitments and rarely produce more than a press release.    

But if you really want to serve customers the best solution, strong partnerships are essential.   It is difficult for even the largest companies to build great technology, serve every market, and understand every customer pain-point with equal zeal and passion.    

In EDI-land, partnerships of great consequence have historically been few and far between.  This is partly due to an over-reliance on slow-moving standards organizations which acted as the primary conduit between organizations.   Don’t get me wrong, standards organizations have a very important role.  It’s just not to innovate.

Several years ago, GXS made a radical commitment to elevating the strategic value of EDI by working with partners.   We wanted to solve major adoption barriers by working with partners to make access to EDI ubiquitous and easy.   We wanted to transform EDI into a valuable and cost-effective tool to directly improve cross-enterprise business processes.    As a result, we have amassed a roster of productive partnerships that have reenergized EDI, broken down previous adoption barriers, and generated new levels of customer excitement.  (See www.gxs.com/partners)

Last month we were awarded the top prize by START-IT magazine for our partnership with Microsoft.   This was the gold medal.  START-IT’s charter ‘Power of Partnerships’ premier award.    It was not only exciting to get this award because it comes from the customer viewpoint (START-IT covers manufacturing) which proves critical validation, it also provides many GXS’ers with real recognition on the importance of their work behind-the-scenes truly integrating both companies products to deliver a real solution.   With this partnership we combined great software customers love to use – Microsoft BizTalk and Microsoft SQL Server – with a sophisticated on-demand integration service – GXS Trading Grid – and created an integrated supply chain automation experience like never before.   Call it ‘Supply Chain at your Fingertips’.  Actually, there is more cool innovation to come in that arena… but that is for later.

Bottom line.  For customers, when businesses enter into meaningful partnerships deliberately and with real long-term commitment, two leaders are better than one.

Most conversations around the industry typically highlight a retailer and supplier relationship when describing B2B e-Commerce. When we discuss on-boarding, we almost always refer to supplier on-boarding. When we talk about compliance, we almost always mean supplier vendor compliance. I admit when I am talking to my friends about what GXS does, this scenario is the easiest to illustrate.

To the surprise of many, the most exciting B2B scenarios I am involved in today, do not meet this “classic” definition for B2B e-Commerce. Instead we are integrating payables, receivables and account management transactions between corporate treasury departments and banks. Or, we are helping logistics managers with integration into their third-party transportation networks to track products or spare parts worldwide so they are always available to customers.

This B2Bank or B2Boat Integration is a global trend. During my visit this week to China, Korea and Japan, helping our customers integrate with their customers for competitive advantage was by far the overarching theme.

B2Boat integration is about enhancing global shipping processes. For example, helping a manufacturer track and ensure on-time delivery of flat-panel displays to global markets is key to growing sales and capturing market share.

B2Bank integration is about simplifying cross-border transactions throughout a supply chain. Using innovative tools such as Open Account models for financing, banks can help their customers create a more flexible, leaner supply chain.

One thing is for certain, these new scenarios require more power than what ‘yesterday VAN’ players provide. Our $100+ million investment in GXS Trading Grid gives us a single platform to connect every bank, with every customer, with every ship, in every region of the world. No batch mailbags required. No untimely VAN interconnects needed. No expensive software required. And, our people have been on the street in countries like China, Japan, and Korea for over 10 years. As our customers remind us every day, local expertise matters. Sorry, but I had to end this blog by bragging a little bit.

This morning I was graced with one of those proud marketeer moments.  Gartner issued a new taxonomy for the entire B2B infrastructure market.  This report was the collective work of five of their brightest, and this report this time was spot on.

Gartner introduced an entirely new category called B2B Project Outsourcing.  They cited the leading drivers as companies with 1) large and complex e-commerce projects, 2) small-and-medium businesses (SMBs) without the IT savvy or desire to respond to external mandates, 3) large enterprises consolidating integration projects, 4) ERP extension projects and 5) SOA extension projects.  In all cases, customers concluded that owning and operating B2B infrastructure was not a required core competency for their business.

When we combined our on-demand technology (GXS Trading Grid) and our B2B project outsourcing capabilities, we created B2B Managed Services.  Based on the wide range of customers from diverse industries adopting our B2B Managed Services in the last 18 months, we quickly learned that we have more than a trend, we have a Redshift.  

As I learned recently from Sun, Redshift refers to the color change of light from galaxies that are moving away from Earth because of the universe’s expansion; galaxies farther away are shifted more dramatically to the red than those nearby.   Customers that are using our managed services are ‘redshifting’ away from their competitors by gaining speed and ROI advantages from offloading non-core functions.

The point is that whether it is proven by new customers, confirmed by Gartner or defined so eloquently as a Redshift, one thing is for certain, we have a trend, a fad, a movement… and it’s here to stay.

When we set out on our journey in 2004 to transform our VAN into a real-time services-oriented network (GXS Trading Grid), we were making a big bet that customers would increasingly embrace the on-demand proposition and that B2B e-commerce in general would once again be relied on for new sources of competitive advantage.  Today that seems obvious but as recently as 36 months ago, on-demand was scarcely a term and B2B e-Commerce was not even on the boardroom’s back burner.

Thanks to SOA, web services and centralized meta-data repositories, creating integrated experiences and mashups, we knew early that we needed to build the Grid to embrace partners, with APIs and schema libraries exclusively for their use.  Today, our strategic partners include Microsoft, webMethods, JDA, eBridge, IVANS, EDIsoft, EPCSolutions, Zebra, Symbol and the list goes on.  

No question, these partnerships help us create value for our customers at terrific speed.    While the bits may be technically ‘loosely-coupled’, our strategy with our partners is definitely ‘tightly-coupled.’  So, last week when it was announced that webMethods will be acquired by Software AG, the collective marketing teams of both companies spent hours working through impacts and scenarios.  Fortunately, this merger is great news for GXS and our customers from every perspective.    (Feel free to scan our official statement on the acquisition at http://www.gxs.com/gxs/newsroom/gxs-ag-software.htm).    

While I can say with high confidence that Microsoft will never be acquired, in a world of increasingly tightly-coupled technology partnerships, it will be important for companies to know the partner eco-system their service providers rely on.     I guess this really is no different than when a CIO’s CRM or SCM or ERP provider is acquired and the analysis he or she must go through.  In this case, tightly-coupled partnership just puts the scrutiny in the hands of the CMO, not the CIO!

More and more these days, we are working with companies seeking to optimize their supply chain with the specific goal to improve their end customer’s experience, specifically by appealing to their emotional needs.  In some cases, these needs transcend emotions and are actually life-saving, or at a minimum life-altering.  

One of my favorite large retail customers calls this building a customer-tailored supply chain.   Recently I had a chance to look at some of the scenarios that our On-Demand Product Data Quality Service (UDEX) was having on supply chains.    For one large ice cream manufacturer, they used this service to make sure they had up-to-date, accurate information on all the ingredients from their suppliers, with the sole purpose of making certain consumers were informed of ingredients that cause food allergies, for example.  Peanut allergy, I learned, is actually quite common leading to severe physical reactions for millions of people today.

In the United States today, consumers are very aware of foods that contain trans fats, thanks to recently adopted labeling requirements of the FDA on all packaged food products.  Trans fats are largely industrially created as a side effect of the partial hydrogenation of plant oils.    These type of fats are increasingly considered to be more of a health risk than those that occur naturally.   Requiring suppliers to provide accurate information about product ingredients is directly correlating to sales either at the storefront or on-line.  

In Europe, awareness is quickly growing about the “carbon footprint” of a particular product or service.  Driven by an intense focus on the disastrous effects from global warming, consumers will over time desire to associate themselves with products or services that are have the least impact on climate change.   Carbon footprint is the measure that is gaining attention and basically is the sum of all activities required to create a product that directly relates to the amount of natural resources consumed, as a measure of environmental impact.   By adding all of the factors that contribute to carbon emission from manufacturing, shipping, production and storage together, a consumer can determine the carbon footprint – and environmental impact – of a product they seek to purchase.

The emotional side of B2B comes in many flavors.  Recently we unveiled an advertising campaign that appeals to everyday emotions, such as kids, food, and cars.   Take a look at http://www.gxs.com/flash/gxs_corpBrandAds.htm.  

However,  there is no question that the life-altering and life-saving possibilities from the exchange of information pertaining to food allergies, trans fats or carbon footprints have a much more important and significant impact.  Perhaps, this will be the focus of our 2008 campaign.