Unmasking the Complexities of Data Sync: Understanding Retailers' Options for Reaping Benefits

Infovis_oct27 10/27/06 2:39 PM Page 1
AN RIS/CGT WHITE PAPER
UNMASKING
THE COMPLEXITIES
OF DATA SYNC
Understanding Retailers'
Options for Reaping Benefits Infovis_oct27 10/27/06 3:22 PM Page 2
UNMASKING THE COMPLEXITIES OF DATA SYNC Understanding Retailers' Options for Reaping Benefits
MAJOR RETAILERS AND MASS MERCHANDISERS ARE TURNING UP THE
PRESSURE ON THEIR TRADING PARTNERS AND EVEN OTHER RETAILERS
TO IMPLEMENT GLOBAL DATA SYNCHRONIZATION (GDS) WITHIN THEIR
ORGANIZATIONS. These advocates see GDS and participation in the GlobalOverlooked in Data Synchronization Network (GDSN) as the best path to improving the time-this premise is that liness and accuracy of their supply chains, particularly once these efforts aremany sectors within broadly supported across the retail supply chain landscape. The GDSN retail, particularly industry initiative promotes the concept of a unified global data synchroniza-general merchandise tion effort, coordinated and implemented by standards organizations. The
and apparel, have premise is that businesses should implement now, then wait to see eventual
been employing benefit once end users and commercial service providers have worked through
data synchronization all of the obstacles.
Overlooked in this premise is that many sectors within retail, best practices for particularly general merchandise and apparel, have been employing data synchronization best practices for nearly 20 years via business-to-business datanearly 20 years. exchange using industry standards. These users are already receiving the ROI thatis promised by GDS advocates, whose system will require some level of new investment. No wonder there is a considerable undercurrent of discussion amongretailers, suppliers and others questioning the value and direction of certain compo-nents of the GDSN standards initiative. So why is there a push to adopt new standards and processes?
Data synchronization leverages technology and automation to enable suppliers andtheir channel partners (e.g., retailers, distributors and brokers) to exchange, approveand manage accurate product, pricing and forecasting data. GDS is the effort to create a common set of standards and infrastructure across the retail and consumergoods landscape. The goal is to ultimately create a global framework with one central registry receiving and sending messages via a network of interconnected data content providers.
But confusion and skepticism abound about how to implement GDS and where thereturn on investment might come from. Many end users have complained that thereis little added value and unnecessary extra technical layers and cost by engagingwith efforts such as GS1's GDSN initiative. Although subscriptions to the GS1 glob-al registry have grown from January 2005 to August 2006, anecdotal evidence sug-
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gests a healthy percentage are joining in response to mandates and plan minimalcompliance. Uncertainty of the GDSN model is particularly high among retailersand suppliers outside mass merchant and grocery, whose Tier One members havedominated the global data synchronization movement.
In fact, thousands of vendors, manufacturers, suppliers and their retail customers arealready actively exchanging information to support billions of dollars of transactionsannually using standards-based data exchange technology and services (e.g., portals,product catalogs, value-added networks, peer-to-peer connections via softwareapplications, etc.). These systems have been configured to process and maintain mil-lions of product items and have evolved over time to support a more flexible andscalable set of product data elements or attributes. The key to success for the earlypioneers of data synchronization was standards-based access, which drove massadoption. Current efforts related to GDSN may not be completely aligned with corebest practices.
A SHORT HISTORY OF THE GDSN In 1999, a small but powerful group of grocery retailers and large consumer goodssuppliers, established a new data synchronization initiative backed by the UniformCode Council (UCCnet). This new initiative was initially positioned as a "registry"and product item set-up service through whi... [download for more]