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September 2005 Newsletter
From the Executive Director
As the number of hits to the ECCMA web site continue to grow and ever increasing numbers are downloading copies of the eOTD and associated documents, We get asked, “if we can get all of this for free how can I justify asking my company to join ECCMA”. While the benefits of membership in ECCMA are very tangible for existing members who are working on implementing the eOTD or developing a standards implementation strategy, it is sometimes hard to explain the benefits of membership to companies that have invested in developing, implementing or promoting proprietary solutions.
In order to better answer the question I have been doing some research specifically on quantifying the financial benefits of standards development and I found a number of articles that you may find interesting. Some of it is of course opinion but increasingly we are seeing studies and research that are providing tangible proof of what we instinctively know to be true.
In our last newsletter I reported on what I saw as disturbing evidence of attempts to develop terminology tolls and in reading many of the articles I have referenced you may note that while standards are typically developed to improve communications and promote free and open trade, standards can also be developed as “weapons” to exclude and disenfranchise. On a national level this can exist where standards are dominated by industry consortia with restricted membership and on an international level this can also exist where countries seek to impose national standards on imported goods or require the use of national standards in government procurement policy while at the same time restricting participation in the development of the standards or restricting access to the standards themselves. Being aware of these dangers and actively participating in national and international open standards development is the best way to protect your company from such practices and to protect your company’s investment in information technology and in e-commerce. Of course I would be remiss not to mention that encouraging others to join ECCMA is also a good idea.
Respectfully submitted,
Peter Benson
Executive Director, ECCMA
ECCMA Membership
Judy Atiyeh, ECCMA
During the remainder of 2005 ECCMA will begin additional strategic outreach to individuals and corporations who have already demonstrated interest in our eOTD content by downloading our publicly available data or who are prime candidates to enjoy the many benefits of ECCMA membership. Our goal is to increase ECCMA member volume and subsequently strengthen our revenue stream from the value-added services and content we offer.
Please contact at jatiyeh@eccma.org if you are aware of any non-members that would benefit from our many membership components.
Changes to the ESN Registry
Doug Erickson, PartNET
As ECCMA’s work on the eOTD standardization process moves forward, so does the development of the ESN Registry. Doug Erickson, Senior Architect at PartNET has been the principal developer of the Registry. Some of the recent changes Erickson has brought to the Registry are the adoption of the latest eOTD terminology and acronyms, and the application of eOTD Implementation Guides, which will have a significant positive impact on the utility and value of the Registry.
Work on the eOTD standard has also prompted the development of a series of document formats. XML documents are being defined to represent catalog data and implementation guides, in addition to the core eOTD. These specifications open the door to automated interaction with the ESN Registry. Currently, the ESN Registry supports an interactive user interface that allows people to contribute and search for information. Coupled with a well-defined communication protocol, these document formats will allow automated processes to perform these operations more efficiently, and on a much larger scale.
PartNET looks forward to continuing its support of ECCMA’s future efforts to develop and implement ISO standards. Please contact Doug Erickson at doug.erickson@part.net for additional information on the ESN Registry.
Why support Standards development?
Peter Benson, ECCMA
I have abstracted what I felt was relevant but I would encourage you to also follow the hyperlinks as most of the articles are worth reading in their entirety.
Benefits of Standards Participation
http://www.xencraft.com/resources/stdsbenefits.html
“Companies accrue two kinds of benefits by participating in the development of standards: immediate and deferred.
The immediate benefits come about through access to technical resources, communication and networking with peers in the industry, the ability to influence the development of the standard and recognition for participation.
The deferred benefits come about when the standard is released and accepted by its user community. Although it is true that all users of the standard experience these benefits (whether they participated in the development or not), participation insures the standard is in fact developed, accelerates the development so benefits begin sooner, and of course, participants get a jump on the implementation of the standard.
Immediate
Participants of organizations that develop standards typically gain the following immediate benefits:
- Early access to specifications, prototypes and legislation.
- Greater understanding of the standards and their underlying designs, tradeoffs and compromises made during their development, and the operating conditions and environments they are intended to serve.
- Relationships and contacts are made that can become technical resources.
- Commercial risks are reduced through lower development costs (due to knowledge and experience shared among participants, and due to the other benefits in this list).
- Improved ability to identify future trends. (Due to research developed during the design of the standard.)
- The capability to influence the resulting standard.
- The development of personnel by giving them the opportunity to work with leaders in the field and to witness standards development processes that maximize cooperation and consensus building.
- Corporate image as an industry leader is enhanced.
- The credibility and image of the technical expertise of your staff and is enhanced.
- The ability to participate in promotion of the standard. E.g. Mentions in press releases, including providing executive quotes and announcements of product dependencies, often comes with membership.
- Membership often includes financial discounts for various events or materials sponsored by the standards organization (conferences, workshops, journals) etc.
- Participation in exclusive (i.e. member-only) technical events, e.g. workshops, development meetings, conferences, etc.
Deferred
Standards can have a significant impact on the products that incorporate them and on the marketplace. For example, standards can provide assurances of performance, reliability, safety and interoperability that eliminate inhibitions to sales. Often, increased sales volume reduces production costs of commonly used components that support standards. Standards also provide guidance to designers, reducing research and development costs and eliminating costly errors.
In particular, companies that produce products that incorporate standards typically gain the following benefits:
- Increased market access and acceptance.
- Improved sales efficiency due to decreased trading costs, simplification of contractual agreements, and lowering of trade barriers.
- Standards provide assurances that products are safe (or more safe) to use.
- Risk reduction. The standards development process, through prototyping, and agreements by its proponents, insure standards are implemental and incorporate best practices.
- Economies of scale. Employing standards in software components increases the reusability of modules. Reuse increases sales and therefore the production of these components, making them cheaper to build. This further increases their usability and the competitiveness of products that use them.
- Ease of data integration.
- Investment protection. When it comes time to retire a standards-based product, it is likely that replacements will be available (from a variety of vendors) supporting the standards.
- Product life extension. Products that use standards are less likely to require replacement in order to integrate with other, newer products.
- Protection against Obsolescence. Standards organizations are generally highly motivated to provide an orderly way to migrate to new versions of standards.
- Reduced Development Time and Costs. Finding trained and experienced personnel for standardized technologies is easier than for proprietary technologies.”
Company Profiles of Standards Strategies
ASTM
http://www.astm.org/NEWS/profiles.htm
A series of excellent reports, titled Standards and Competitiveness, documenting the strategic advantages of corporate involvement in the development and use of standards.
Uptake of GI standards among GSDI members Uptake of GI standards among GSDI members
Paul C. Smits, European Spatial Data Infrastructure (ESDI) Action Institute for Environment and Sustainability. European Commission Joint Research Centre, TP262
I-21020 Ispra (VA), Italy
http://lists.gsdi.org/pipermail/technical/2005-May/000044.html
“In an increasingly global and complex world, standards are a vital part of life. Various pieces of research have proved that they bring benefits, including significant economic benefits, to all stakeholders in a community, and to the community in its entirety (research in Germany, for instance, has quantified the annual benefit of standards to the national economy as being $15 billion). What is vital, however, is that the standards produced are appropriate, in particular that they meet the needs of the sector, are workable, and are produced and revised in a timely manner. This requires ongoing liaison with all stakeholders.”
Data Interchange Standards
Robert L. Marx
http://www.search.org/conferences/1997Internet/standard.htm
“Today we are going to talk about standards. The Internet is awash in standards. There are standards, claim-to-be standards and wanna-be standards throughout every aspect of the 'Net. It is the foremost goal of every proprietary product to become a standard. We will talk about standards, what it means to be a standard and who cares what a standard is. We will talk about what standards do to help us and what do they do to hurt us. We will have three examples of standards to focus our attention.”
Standards worth £2.5bn to UK business
http://www.nssf.info/resources/documents/WEBSITE_BSI-DTI_Standards_FINAL.pdf
“Standards provide better access to markets and facilitate trade. They promote competition in the market place by helping industries capture knowledge, share insight and with it reduce risk.”
The Empirical Economics of Standards
http://www.dti.gov.uk/iese/The_Empirical_Economics_of_Standards.pdf
“Insofar as they provide information, standards promote technological understanding. As a recent study of standards points out, ‘Researchers, developers, construction engineers and marketing experts utilize ... standardization documents as important sources of information about the state of the art in technology’ (Blind 2004). As evidence in the UK, there is the fact that standards feature prominently as a source of information for innovators in the UK’s Community Innovation Survey (CIS3).38”
Putting a Dollar Sign on Standards
http://www.iso.org/iso/en/info/Conferences/TC_SC_Chairs/2005/en/report.html
3rd ISO conference for technical committee and subcommittee chairs, Geneva 16-17 June 2005
“Standards may improve profits at the individual corporate level. That improvement may even be measurable, accurately. One thing that might convince even more people of the value of standards work is the contribution it makes to national economies and the world economy. Various speakers alluded to this and Ziva Patir quoted some hard data.
In moderating the final working session, she pointed out that DIN had identified an annual standards contribution worth 1 percent of Germany’s GDP. That contribution was reckoned to be five to ten times more than the contribution from patents (intellectual properties). The return on investment from standards was approximately 25 percent – which would be the envy of most commercial enterprises.
It is possible to put a dollar sign on such data, using GDP figures for 2003 – the most recent year for which the World Bank has published indicators for each of 185 independent countries. One percent of Germany’s GDP (the world’s third largest economy, behind the United States and Japan) is USD 24 billion, some 6.6 percent of the corresponding world figures of USD 365 billion. USD 24 billion is a larger amount than the annual total GDPs of 119 of the countries on the World Bank list. So we are looking at a very large figure indeed.”
Retail Systems Alert Advisory Service
Tom Friedman, Director of Publications
http://www.retailsystems.com/Index.cfm?PageName=tom
”When it comes to supply chain management automation, end-to-end supply chain visibility and supplier-retailer collaboration, many initiatives have floundered due to a single set of industry standards or a basic lack of understanding of the value of standards.”
Standards... an Essential Component of Corporate Business Strategy
George T. Willingmyre, P.E. GTW Associates
http://www.gtwassociates.com/answers/wsdpap.html
The road to the City of Emeralds is paved with yellow brick," said the Witch, "so you cannot miss it." If only the correct route in the standards maze was marked as well as Dorothy's path to the magical kingdom of Oz, the arcane world of standards would not be so alien to US business strategists. However, executives who fail to recognize that standards impact their business do so at their own peril. Standards are important competitive tools that can define, limit and even create markets. The shift from national to global markets has made global standards strategy an essential component of overall business strategy. Standards particularly impact the innovative and "high proprietary content" products or services that have traditionally showcased US technology and have been the hallmark of the success of US industry over the years.”
Economic benefits of standardization
DIN German Institute for Standardization e. V.
http://www.normung.din.de/sixcms_upload/media/1350/engl_zusammenfassung.pdf
“As expected, company standards have the greatest positive effect on businesses, for they help improve processes. When it comes to the relationship with suppliers and customers, however, industry-wide standards are the main instruments used to lower transaction costs and assert market power over suppliers and customers. In fact, industry-wide standards play a vital role in our increasingly globalized world. 84% of the companies’ surveyed1 use European and International Standards as part of their export strategy, in order to conform to foreign standards.
From a macroeconomic perspective, it is significant that standards make a greater contribution to economic growth than patents or licenses that export-oriented sectors of industry make use of standards as a strategy in opening up new markets, and that standards help technological change.
This research project shows that industry-wide standards not only have a positive effect on the economy as a whole, but also provide benefits for individual businesses that use them as strategic market instruments.”
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