Sterling, IBM Get Nod In Wal-Mart Integration Project

Wal-Mart Stores Inc. Thursday tapped IBM and Sterling Commerce to help move its 8,000 suppliers to Internet-based EDI.

The $218 billion retailer wants its suppliers to move away from what it sees as obsolete, expensive, and inconsistent EDI methods to one that support the data-communication protocol known as EDIINT AS2 (Electronic Data Interchange-Internet Integration Applicability Statement 2). Now suppliers can choose Wal-Mart-approved IBM or Sterling integration services and products. IBM and Sterling, a subsidiary of SBC Communications Inc., will also make available value-added networks as backups for suppliers that run into trouble with EDIINT AS2-based systems.

Wal-Mart's suppliers use EDI for exchanging purchase orders, invoices, shipping notices, and the like. Some of its larger suppliers already are using Internet EDI, but others use older methods modems. "This is the kickoff," says Sam Starr, chief operating officer at Sterling, of today's announcement. "Wal-Mart has a number of big suppliers that they're doing this with already. Now, they're opening this up to their entire supplier base. It really broadens the audience."

Scott Cosby, manager of WebSphere business-process integration at IBM, says the company has been working with Wal-Mart for months on this effort. IBM is already assisting some Wal-Mart suppliers, Cosby says. He adds that some may be equipped to do the work in-house but expects many will find value in IBM and Sterling's backup networks. "If for some reason something goes down, they don't want to lose that interaction with Wal-Mart," Cosby says. "That's especially important during the holiday season."

A Wal-Mart spokesman says the company may select additional integration partners for its Internet EDI effort.