• Illustration: MBN Process Flow

To help small and mid-size businesses automate and manage supply chains, Microsoft has launched the Microsoft Business Network (MBN). MBN combines on-site software and subscription-based, Microsoft-hosted Web services to help companies connect to their partners and exchange business documents, such as purchase orders and invoices. However, important features for some businesses will not appear until subsequent MBN releases: MBN 1.0 does not offer a browser-based interface for sending and receiving business documents, has limited integration with Electronic Data Interchange (EDI) systems, and offers direct enterprise resource planning (ERP) integration only with Microsoft Business Solutions’ Great Plains.

Because of these limitations, MBN 1.0 will likely be limited to larger customers: in particular, small suppliers could be reluctant to participate in the network before browser-based connectivity to MBN is available. However, if Microsoft can drive larger businesses, particularly manufacturers and retailers, to MBN, their smaller trading partners and suppliers may be forced to follow suit, particularly when these deferred features become available.

Addressing Supply Chain Problems

Launched in Oct. 2003, MBN is based on a business-to-business (B2B) service run by Microsoft bCentral in Mexico and Argentina, and is designed to address two general classes of problems that companies experience in managing their supply chains.

First, many companies’ supply chains are manual, which are generally slow and subject to error for the following reasons:

• They are often opaque to participants; many customers rely on faxes, telephone calls, or on-site visits to check on order or production status from suppliers, for instance
• Because they do not integrate with a company’s ERP system, supply chain data must be entered into ERP systems by hand, a time-consuming and error-prone process.

Second, automated supply chains are often difficult and costly to set up and use for the following reasons:

• Document formats (the format of a purchase order, for example) often vary from company to company and fairly sophisticated development skills are required to map one company’s format to another’s format
• Companies must contend with the multiple communication protocols and document delivery methods—for example, EDI, XML, and fax—used to send and receive orders and other business documents.

The lack of standards and the relatively advanced development skills required to overcome this shortcoming have historically limited supply chain automation to larger companies.

Microsoft Business Network Overview

MBN, available in a Professional Edition and a lower-priced Standard Edition, is intended to help small to mid-size manufacturers, retailers, and their suppliers and customers automate their supply chains. It consists of both local software utilities and Microsoft-hosted remote services that facilitate secure, reliable exchange of business documents, and it offers client access through Office 2003 Professional Edition applications, namely Outlook and Excel. MBN Professional Edition adds advanced features to help larger companies expand and manage their supply chain networks and integration with Great Plains 7.0, one of Microsoft’s accounting and business management products for mid-size companies.

MBN could give Business Solutions products a clear advantage over the plethora of other accounting products for this market, and could serve as a leveraged marketing tool as MBN companies enlist their suppliers and resellers to join the network. Furthermore, MBN continues Microsoft’s drive to establish Office 2003 as a critical component in collaborative business scenarios and could help spur adoption of that product.

Communicating with Partners

MBN contains a set of infrastructure components that help companies exchange business documents in a consistent and transparent way. This includes local infrastructure for storing, sending, and receiving documents, and remote infrastructure hosted by Microsoft that provides a central repository of business document templates, directories of partners, and a conduit for partners to exchange documents.

MBN creates what Microsoft calls a "Unified Mailbox" on a computer located at participating companies’ sites, which serves as the point of entry to MBN. Using Outlook or Excel, MBN participants send documents to partners via the Unified Mailbox, which forwards them over the Internet to servers hosted by Microsoft and creates a mirrored, local copy in a database on the Unified Mailbox computer. Documents are stored on the MBN hosted servers until the designated receiving partner connects to those servers and "polls" for its documents using Outlook; any stored documents are delivered to the recipient’s Unified Mailbox, where they can be viewed by the recipient with Outlook and modified with Excel.

(For an overview of a transaction in MBN, see the illustration "MBN Process Flow".)

Integrating with Great Plains

MBN 1.0 Professional can work directly with Great Plains 7.0, and support for Great Plains 7.5 will be available by Nov. 2003 through an MBN Service Pack, according to Microsoft. From within Excel, MBN users can access Great Plains data and automatically populate business documents such as invoices; with either Excel or Outlook, users can then send these documents through MBN to their partners. Likewise, MBN users can move data from incoming documents into Great Plains. For example, purchase orders received from an MBN partner can be moved directly into a company’s Great Plains sales order system. This could improve both the speed and the accuracy of such transactions, eliminating the need for workers to populate business documents or Great Plains data-input screens by hand.

Microsoft has signaled that similar integration is planned for other Microsoft Business Solutions products, such as Axapta, Navision, and Solomon, but has not given time frames for this integration.

Defining Formats and Processes

MBN addresses the problem of inconsistent document formats by introducing what Microsoft calls "Business Process Templates." These templates define the format (in XML) of specific types of business documents, such as price lists and purchase orders, and provide process definitions that describe how these documents relate to one another. The MBN software and services implement the business rules for processing the documents associated with a template; for example, ensuring that certain business process steps occur in the correct sequence.

MBN 1.0 ships with two ready-made business process templates. The Orders-to-Cash template supports ordering and invoicing between partners in a retail supply chain and includes business documents, such as Price List and Invoice, and supporting process definitions. The Supplier Visibility template allows manufacturers to obtain production status for work in progress from their suppliers, which could be particularly helpful for high-cost, long lead-time items. For example, it allows manufacturers to specify production milestones related to an order, and includes documents that let them query suppliers for progress against those milestones, and other documents that allow suppliers to respond to those requests. An SDK is also available that allows customers to modify these templates or create new business process templates on their own.

MBN users work with business template documents with Excel 2003 or Outlook 2003. MBN provides a plug-in for Excel 2003 that lets end users create, edit, and update process template documents; documents can be read in either Outlook 2003 or Excel 2003.

Businesses employing process templates are either "publishers" or "subscribers": publishers make a template available to specific trading partners via MBN; subscribers elect to transact with a company that has published a template. For example, a large retailer could publish a template to which its suppliers would then subscribe.

Managing Partner Networks

The higher-priced Professional version of MBN offers tools and services that companies use to add and set up new trading partners (Microsoft calls these "Community Building" services). Although both Standard and Professional users can join existing MBN trading networks, Professional users also have the ability to create new networks and invite trading partners to join them.

For example, only Professional users can publish new or updated templates. Once published, Professional users can invite their partners to subscribe to the templates or can make them generally available for other prospective partners to view and download.

Additionally, MBN offers Professional users tools to help them manage their partner lists—allowing them to control which partners have access to which process templates, for example.

Browser Access, EDI Lead Future Directions

MBN could help some mid-size manufacturers and retailers take a first step toward building faster, more efficient supply chains. However, the first version lacks important capabilities that could hinder its uptake, such as the following:

Browser-based access. Client access to MBN 1.0 is limited to Office 2003 applications Outlook and Excel; businesses cannot submit or retrieve MBN documents with a Web browser. In particular, this could hinder smaller companies, some of which may be unwilling to deploy Office 2003 or reluctant to install and run the on-site components that MBN requires. This, in turn, could limit the effectiveness of MBN for larger partners, which will need to maintain separate processes until all partners are MBN-enabled.

Support for EDI value-added networks (VANs). MBN 1.0 does not offer interconnectivity to EDI VANs—private, managed networks that allow companies to securely exchange EDI documents. EDI is a general group of structured languages for intercompany business data exchange that was first used in the transportation industry in the 1970s. Although EDI has a reputation for being complex and costly to implement, it has nonetheless gained widespread use among many of the mid-size manufacturers and retail and distribution companies that MBN targets. Lack of EDI support could lock out a large number of MBN target customers, who may choose to wait until Microsoft offers MBN-to-EDI VAN interconnectivity rather than replace their EDI VAN with MBN 1.0.

Recent indications suggest, however, that such interconnectivity is in the works. Microsoft partner Inovis recently announced preliminary plans to offer MBN-to-EDI VAN interconnection and services for translating EDI documents to MBN XML documents, and vice versa.

Broad ERP system integration. To extend the reach of MBN, the service will need to integrate with a broader array of ERP systems. Although it is possible to connect other ERP systems to MBN 1.0 using BizTalk Server (BTS), integration is restricted to those systems for which BTS adapters exist and requires development of maps to translate MBN documents into formats those systems understand. At the very least, Microsoft will certainly make integration with its own business systems, such as Solomon and Navision, a priority for subsequent releases, and do so in a way that is similarly transparent to MBN 1.0's integration with Great Plains.

For competitor products (such as J. D. Edwards), integration will likely be less transparent; although the MBN SDK makes it possible to build plug-ins that allow Excel to work with other ERP systems, it is unlikely that Microsoft itself will develop such plug-ins.

Availability, Requirements, Licensing, and Resources

MBN is currently available in Australia, Canada, New Zealand, and the United States. Microsoft will focus next on making MBN available in Europe and the Pacific Rim, where it sees an opportunity to connect small and mid-size manufacturers in countries such as China and Taiwan to larger retailers in North America.

MBN Standard Edition requires a computer with access to the Internet running Windows XP Professional or Windows 2000 Server, Office 2003 Professional, and SQL Server 2000 Standard or Microsoft SQL Desktop Engine (MSDE) 2000. MBN Standard costs US$399 for the software (which includes annual subscription fees for a single user for the first year). Additional users cost US$100 per year.

MBN Professional requires Windows Server 2000, Office 2003 Professional, and SQL Server 2000 (Standard or Enterprise Edition), and Great Plains 7.0. MBN Professional costs US$1,999 for the software, including subscription fees for one user for the first year, and US$100 per year for each additional user. Customers who want to use Community Building services must be licensed for MBN Professional and will pay an additional subscription fee of US$4,999 per year.

More information about MBN can be found at www.microsoft.com/BusinessSolutions/MBN/default.mspx.