B2B acquisitions highlight data quality

Three vendors with roots in business-to-business integration have snapped up data synchronization specialists in recent weeks, highlighting the growing importance of data quality in electronic transactions.

Global Exchange Services (GXS) started the trend by acquiring Haht Commerce, which makes product information management software, in a $30 million deal completed in February. Then last month, IBM completed its purchase of a Haht competitor, Trigo Technologies, for an undisclosed amount. Most recently, Sterling Commerce acquired TR2, a privately held company that offers hosted data synchronization services, for an undisclosed amount.

GXS, IBM and Sterling share a history of providing network services for business-to-business e-commerce via value-added networks and related transaction delivery networks. Analysts say it makes sense for vendors of trading-partner integration services to add tools for managing enterprise data integration to their offerings.

For users, the combination means one vendor source for their global data synchronization efforts, Gartner says. Previously, users needed two different types of products to handle data synchronization: tools to manage data integration among different systems within the enterprise and technology to synchronize that data with trading partners, the research firm says.

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Three vendors with roots in business-to-business integration have snapped up data synchronization specialists in recent weeks, highlighting the growing importance of data quality in electronic transactions.

Global Exchange Services (GXS) started the trend by acquiring Haht Commerce, which makes product information management software, in a $30 million deal completed in February. Then last month, IBM completed its purchase of a Haht competitor, Trigo Technologies, for an undisclosed amount. Most recently, Sterling Commerce acquired TR2, a privately held company that offers hosted data synchronization services, for an undisclosed amount.

GXS, IBM and Sterling share a history of providing network services for business-to-business e-commerce via value-added networks and related transaction delivery networks. Analysts say it makes sense for vendors of trading-partner integration services to add tools for managing enterprise data integration to their offerings.

For users, the combination means one vendor source for their global data synchronization efforts, Gartner says. Previously, users needed two different types of products to handle data synchronization: tools to manage data integration among different systems within the enterprise and technology to synchronize that data with trading partners, the research firm says.

Before the Haht purchase, GXS offered hosted services for trading partner integration, and hosted catalog services. What it didn't have was the software deployed inside an enterprise to aggregate product information. The Haht acquisition adds licensed product information management software to GXS' product portfolio.

Sterling had a family of licensed integration broker software; TR2 adds hosted data synchronization services to its lineup. For IBM, the Trigo acquisition adds product information management capabilities to its WebSphere family of integration middleware.

Keeping data clean

Data synchronization is an initiative common to consumer goods and retail companies. It involves reconciling the product data that gets swapped among companies to reduce errors in invoicing, purchase orders and product delivery.

Analysts say retailers and suppliers are wasting money swapping obsolete or inaccurate data in business-to-business transactions. According to Ernst & Young, administrative and paperwork errors are responsible for 13% of the $46 billion retailers could lose annually to inventory inefficiencies and theft.

AMR Research identifies costly problems caused by unsynchronized item data:

• About 30% of items are typically out of sync; fixing errors can cost $60 to $80 per item.

• Mismatched data means incomplete deliveries. Nearly 40% of invoices result in deductions.

• Unsynchronized data can result in delays of up to four weeks in new product introductions.

• Inaccurate orders need to be reworked manually, forcing costs up seven-fold and adding five days processing time.

Investing in data synchronization technology can eliminate these problems, AMR says.