For years, enterprises have relied on traditional electronic data interchange (EDI) to simplify and speed up their transactions with customers, suppliers and other partners. Now, along comes the document-tagging language XML, with the potential to reach new markets, simplify access, populate Web pages and serve as an Esperanto format for transactions of all kinds. Should companies stay with EDI? Should they move to XML? Should they try to get EDI and XML to interoperate? Many are finding that they can do all of the above -- if they use the right tools in the right ways.

Many enterprises embracing both EDI and XML started out in the EDI arena years or decades ago. For instance, St. Louis-based Transentric, which began life as the technology arm of the Union Pacific Corp. rail conglomerate, has been using EDI for more than 20 years. It currently handles more than a million transactions per day with some 8,000 partners on its value-added network (VAN).

Aircast Inc. in Summit, N.J., is another example. The maker of orthopedic braces and other medical products began establishing EDI connections with very large distributors of its products when it was unusual for small businesses to get involved with EDI. Aircast's motivation was simple: To expand the market for its products, it had to adopt the preferred connection method of the larger companies, namely EDI. That investment paid off: Approximately 40% of Aircast's business moves over EDI.

Why XML?

Enterprises have a variety of motivations for wanting to get involved with XML. Many are desperate to get involved in e-commerce but have no idea how to get started, given their current technology. In industries that already have online marketplaces and portals springing into existence, XML is often the required admission ticket. Many firms view the advent of XML as the golden opportunity to automate processes from beginning to end, with the XML format as the central touchstone.