Innovation: Data trading draws firms into a new partnership: The electronic exchange of information seems to be coming of age. Roger Trapp reports

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The Independent Online
FOR some time, information technology experts have been talking of computers being used for just about everything, from transactions between companies to the delivery of services to customers.

Until recently the slow progress of electronic banking and computerised shopping cast doubt on this idea. For most people it has meant little more than three initials - EDI, for electronic data interchange.

Now, with most businesses computerised to some degree and the growth of mail-order shopping and teleworking suggesting an increasing acceptance of modern technology, it seems EDI's time is coming. And, somewhat predictably, it looks as if it will be more about management than computers.

Cranfield School of Management has just completed a two- year research project on the concept in conjunction with a number of business sponsors. Although all involved feel that the study has thrown up a number of subjects for further study, it has helped to focus thinking on strategic issues.

Most important, perhaps, it has paved the way for the greater co-operation between companies that EDI requires. Instead of being adversarial over such matters as cost and supply times, businesses involved in the various stages of production will have to act more as partners. As one of the project participants notes, this means fundamental re-engineering of many businesses.

While there was much theoretical discussion, a lot of time was spent on case studies, in which companies were able to explore shared interests and opportunities and to identify joint actions. 'This removed barriers, avoided controversy and put companies in a mind to share information with partners,' said Andy Bytheway, the project's director.

One study looked at the benefits for those in a supply chain. At one end was Asda, the supermarket retailer, and at the other BP Chemicals, with an international supplier of household goods in the middle.

Designed to identify problems and total supply-chain costs, this study was also able to assess current EDI performance by those involved and to spot the areas in which the concept might be used in future.

Bob Dennis, business information support manager at BP Chemicals, said the company had set up an internal EDI as well as establishing outside links.

Although many in the organisation had been aware of the concept for several years and realised they needed to be at the forefront, they were unsure about the benefits and when they would appear.

Even though the project tended to reinforce views already held, Cranfield had helped to focus thinking.

Sandra Davies, Asda's EDI manager, agreed. But she added that the practical emphasis of the project had helped to put across the idea that the concept was about more than finance.

Having started with orders, Asda had been able, through Cranfield's help, to consider the whole of its stock management system. She said that since this could be shown to have a great strategic impact on the company, the programme had the full backing of senior managers, including Archie Norman, the chief executive.

In the next two years the company plans to implement a means of forecasting demand for products and to develop methods of gathering price information from suppliers to ensure store-wide uniformity.

Mr Dennis said that while BP Chemicals was not yet 'pushing the idea down customers' throats', the company was taking part in an increasing number of link-ups.

Cranfield has also gained. The case studies have enabled it to develop a new method of business analysis dealing with efficiency, effectiveness and evolutionary benefits.

The system is able to assist executives in tackling such vital projects as cost and time savings, quality improvement and discovering opportunities for business development.

(Photograph omitted)

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