Planning for next-generation ecommerce standards is crucial for companies looking to participate in online marketplaces.

Standards are designed for buyers and sellers to manage three processes necessary for ecommerce transactions: data discovery, commercial transaction management and supply chain partner integration. All marketplace standards will, essentially, be based on XML.

For the past three decades, electronic data interchange (EDI) has been the primary transactional standard. What it doesn't address is the real-time, business-to-business information exchange and application integration at the heart of web transactions.

By 1996, visionaries recognised XML could fulfil this role by offering a web-centric solution for information interactions. By the end of 1999, it was the lingua franca of ecommerce.

XML is a meta-language, or master specification - an open standard used to construct other specifications. Each specification refers to a single industry, business activity or application.

More than 30 XML variants for ecommerce are under development, including open standards created by standards committees, and proprietary specifications created by vendors and users.

Unhappily, there are many competing flavours of XML, and the two largest vendors of marketplace software, Commerce One and Ariba, are promoting different ones - commerce XML (cXML) and Common Business Library (xCBL) respectively.

The situation becomes more confusing every day, as vendors, users and industry groups announce standards, specifications, applications and related ecommerce efforts. Managers need to understand a little of this to set realistic goals for marketplaces and other ebusiness initiatives.

While EDI standards allow businesses to exchange large batches of simple transactions efficiently, they only support some of the functions necessary in marketplaces and are unsuitable for real-time trading.

Implementations aren't fully standardised and are often too expensive for use by small firms. XML-based specifications offer a richness of functionality that EDI lacks, and its web heritage ensures that it will be cheap to implement.

Public comment on XML in ecommerce has been positive, but will soon take a negative turn. Users are becoming increasingly confused by the rapid proliferation of initiatives all designed to do the same tasks.

New specifications will need to be reconciled with existing ones, and clear XML leaders will need to emerge, before broad-based use in a wide range of ecommerce activities becomes feasible.

Gartner expects industry leaders to emerge in 2002. XML will succeed, but it will take longer than the vendors originally stated.

It's possible to implement inter-working between different flavours, but that requires special programming with web integration servers. So don't expect your own implementation to be understood by your trading partners unless it's based on a widely accepted specification.

In the future, we predict reconciliation will be available through web-based agents. Web-based discovery and automatic reconciliation technologies that process independently created XML-defined data models are currently under development.

Since cXML and xCBL are incompatible, sellers that wish to operate in both environments on an automated or simultaneous basis will need to support both specifications.

Supporting two flavours of XML will not merely add to IT costs, it may also delay system changes and impede consolidated reporting of marketplace activity.