XML, an advanced computer language, holds promises of problem-free data exchange for companies across the world. The impact on, and benefits for, ebusiness could be immense, says Mark Birrell

Before the internet came along, there was no need for computers to communicate – most computers operated totally independently as stand-alone units. Some organisations did have computers connected in a network to share information, but few were connected to the outside world, as there was no software or common network to translate data between systems. The information held on one company's computers would have been incomprehensible to another company's system.

The legacy of these early systems still exists today. A large national bank recently discovered that, after a series of mergers and acquisitions, it had 1,920 different computer systems, all of which were incompatible to varying degrees.

With the internet exposing us to a new world of communication, ways of exchanging information between computers have developed. Until recently, however, these have been used primarily for email and web searching. Now, with the help of XML, electronic business over the web takes on a different dimension. We are witnessing nothing less than a “big bang”: the explosive growth in business conducted between all kinds of organisations worldwide over the web.

The straight facts
So, what is XML? By definition, XML (extensible mark-up language) is a data-exchange standard and is the most advanced of a family of languages that was initially developed by IBM in the 1980s. It has now been ratified by the internet's main technical authority, the World Wide Web Consortium, and endorsed by many leading organisations such as Microsoft, IBM and the Bank of England.

It works by linking text to “tags” that describe a document's content and meaning. It is a standard, simple and self-describing method for exchanging data across diverse hardware, operating systems and/or software. The Bank of England is a recent convert to XML, as it believes it provides a more efficient way of exchanging computerised documents. It believes XML could have a “considerable impact” in reducing errors in transactions. For the commercial insurance industry, XML brings a multitude of benefits to trading business over the web. Through XML programming, interactive trading becomes more secure and the data flow between the website and the customer becomes less cluttered.

Across the board
XML has fast become the computer language of choice for managing the diversity of data, applications, devices and electronic business applications. Many different industries, such as healthcare, banking and automotive, have already defined, or are currently defining, standard XML-based document structures for ebusiness. Initiatives in the commercial insurance industry are also being developed, but they are still in their infancy.

XML brings two major breakthroughs to the internet. First, XML is a powerful, yet flexible tool to organise the information content – the knowledge or “fuel” for advanced IT economies – and to make it maintainable and intelligently searchable. Daily practice proves how badly needed this is: A search on the web for the fastest chip on the market also yields, among other things, a long list of references to “potato chips”. HTML, the first programming language for the web, defines how text is displayed on screen, but it is useless for organising and qualifying content.

All this changes with XML, as information can be structured, labelled with tags and qualified with attributes. These provide meaning to the information on the internet and it can be organised, processed and understood more readily.

With data formatted in XML, a search for the fastest chip can easily be put in context and it will deliver meaningful results.

Second, XML is the language that will support all automated transactions between and within all types of organisations. Interacting organisations will formalise and automate all routine transactions in the form of XML messages, which will include rich, multimedia information. In the case of the insurance industry, data could pass from a broker's policy document to an insurance company and then to an underwriter – saving on endless retyping, mistakes and time delays.

Two things are necessary, though, to realise the vast potential of XML. First, applications and IT infrastructures must become XML compatible. Lots of products are now being delivered to the market. Second, and most importantly, industry and business associations need to agree on binding definitions of XML vocabulary and messages.

Ebusiness made easier
The argument for XML was endorsed in a recent study by technology consultants Gartner Group. It was found that “companies typically spend between 35% to 40% of their annual IT budget on developing, maintaining and improving new programs, the sole purpose of which is to ensure the smooth exchange of information between databases and IT applications”. Further, Deborah Hess of the Gartner Group recommends “the use of XML technology for storing and integrating data, because this enables the costs of data exchange to be reduced to such a degree that companies can immediately, and without any problems, be in a position to introduce efficient ebusiness processes”.

Bill Gates and Microsoft also regularly endorse the use and potential of the language. Gates announced at Comdex, the US computer fair: “I believe that both Microsoft and the IT industry should really bet their future around XML.” Microsoft completely espousing a technology it didn't invent itself is a strong argument in the language's favour.

XML is fast becoming the grease for the wheels of ebusiness. Although we already have quite powerful non-XML computer systems and networks today, only through the introduction of XML is it possible to put the exchange of data and information on a uniform, standardised basis that is totally independent of the platforms and applications used.

Worth the trouble
If companies are to adopt a new language such as XML, and are prepared to go to the trouble and expense of translating their existing data into it, they have to be certain of the business benefits and that the standard will endure. That, in turn, means a large number of other businesses must also be using it, to give the new technology a critical mass of backers. However, analysts are suggesting that XML has already reached that point.

As a growing number of companies realise there is little value in data that cannot be exchanged, perhaps in XML the paths of technical programming development and business logic are finally converging. In short, perhaps business managers and technologists are finally speaking the same language.

  • Mark Birrell is CEO of Wildnet New Media Group. Wildnet constructs, manages and markets trading websites for the commercial insurance industry.