GXS Acquires HAHT Commerce for More Synchronized Retail B2B Data Part Two: HAHT Commerce

Event Summary

On January 15, Global eXchange Services, Inc. (GXS, www.gxs.com), the large, privately-held B2B e-commerce software, services and solutions pioneer, which operates one of the largest B2B e-commerce networks in the world and manages one billion annual transactions for more than 100,000 trading partners, announced that it signed a definitive agreement to acquire HAHT Commerce (www.haht.com). HAHT Commerce is based in Raleigh, North Carolina (US) and is a privately-held provider of demand chain management applications (DCM) that strategically automate, integrate, and optimize order management, product information management (PIM), channel management, business intelligence (BI), and customer services functions between manufacturers, their channel partners, and end customers.

Under terms of the agreement, GXS would acquire all the capital stock of HAHT Commerce through a merger for approximately $30 million (USD) in a combination of cash and shares of GXS Holdings, which is the parent company of GXS, headquartered in Gaithersburg, Maryland (US). The transaction was subject to the approval of HAHT Commerce's shareholders and other customary conditions and the acquisition was completed in February. CIBC World Markets Corporation acted as exclusive financial advisor to HAHT Commerce with respect to the transaction.

This is Part Two of a four-part note.

Part One began the event summary.

Part Three will discuss the market impact.

Part Four will cover challenges and make user recommendations.

HAHT Commerce

On its hand, HAHT Commerce at the end of 2003 announced that its product information management (PIM) solution goes well beyond basic, short-term fix for compliance with data synchronization via the UCCnet GLOBALregistry service. Namely, like its future parent GXS, HAHT has long realized that data synchronization would be a relatively simple task if the data was normalized, complete, and error-free. Unfortunately, this is rarely the case, given product information is not created by a single department within the company and is usually not overseen by any single group. It is this lack of process within a manufacturer's business and around managing product information that facilitates errors.

To that end, HAHT Commerce claims to have raised the bar by providing more advanced PIM processes with the introduction of Version 7.5 of its HAHT Commerce Suite of applications and through its many updates to the PIM component of the suite. HAHT PIM is a strategic solution designed to meet current and evolving standards for collaborative trading. It empowers manufacturers to manage product information and optimize product data synchronization from product launch through to sunset via the automation of internal and external business processes with trading partners. It supports product item data synchronization with UCCnet services, industry exchanges, as well as directly with trading partners in a point-to-point fashion. Here is a summary of new features found in version 7.5:

  • Compliance Manager—Uses data validation rules to ensure compliance with trading partners and industry standards;

  • UCCnet 2.2 Certification—Supports the UCCnet GLOBALregistry service for data exchange with global partners and industry vertical markets;

  • Visual Workflow Editor—Allows workflow administrators to model business process workflows according to specific business needs and conditions. It enables support across the entire suite for quotes, orders and requests for quote (RFQs);

  • Proxy Delegation—Allows approvers to sign a proxy while they are unavailable thus facilitating the continued handling of workflow tasks on their behalf;

  • Personalized Workgroup Templates—Allows administrators to create different data views for various group functions which enables business users to focus on their area of expertise;

  • Parallel Workflow—Speeds approval process by splitting work across multiple users;

  • Audit Trail Support—Administrators can view changes made by each step of approval process; and

  • Business Intelligence Enhancements—New reports and data analysis functionality highlights potential problems. At the discretion of the manufacturer reports can be generated to show average days to market by product, a summary of trading partner actions, and a retailer responsiveness scorecard for data synchronization, to name a few.

Vertically Focused DCM Application Suites

Prior to that, early in 2003, HAHT announced general availability of three new vertically-focused DCM application suites for chemical, consumer products, and discrete manufacturers. The HAHT Consumer Products Suite, HAHT Chemicals Suite, and HAHT Discrete Manufacturing Suite are all built on HAHT's new core technology, Commerce Suite 7.1, and provide specific functionality for each respective industry. They are also touted to offer a modular architecture, rapid implementation, out-of-the-box ERP integration, easy customization and support for global deployments.

While manufacturers in different industries share some common needs, they determine their demand chain initiatives according to the operational priorities of their industries. For example, consumer product manufacturers are more concerned with managing and sharing branded product information, while a typical commodity chemicals company is more interested in increasing market share via segmentation and customer service levels, and meanwhile, discrete manufacturers are focused more on their channel partners than the other two. The following is a list of industry-specific functionality and their potential benefits found in the suites:

1) HAHT Consumer Products Suite

  • Ability to define multiple packaging configurations for each product manages complex packaging relationships

  • "New Product Introduction (NPI)" workflow process decreases time to launch

  • Workgroup-level security, edit controls, and validation rules for product information

  • UCCnet Global Registry support for item synchronization and market groups simplifies maintenance

  • Electronic-to-paper print controls streamline hard-copy product data sheets and catalog creation

  • Personalized "Favorites" portal clip allows for easy access to frequently ordered or accessed product data

  • Dynamic querying capabilities serve to provide extended product data

  • Improved reporting controls for business intelligence enhance data analysis

2) HAHT Chemicals Suite

  • Quote Management shortens the length of time it takes to reach a price agreement with Global customers during negotiations

  • Auto-replenishment based on collaboration, events, and order history reduces errors and enhances customer service

  • FaxPO functionality automatically converts faxed purchase orders directly into an ERP system, reducing errors and processing costs

  • Support for Chemical Industry Data Exchange (CIDX) 3.0 Chem eStandards increases integration options

  • Enhanced Business Intelligence helps increase market share through analysis of sales channels and customer segmentation

3) HAHT Discrete Manufacturing Suite

  • Catalog customization for channel partners via dynamic templates and partner-defined fields

  • Co-branded site functionality lets channel partners customize manufacturer's content

  • Channel-defined product bundles support collaboration

  • Optimized shipping-point models tied to individual channel partners provide cost savings

  • Line-item order history search

  • Personalized context-sensitive e-mail alerts save channel partner time when completing transactions

Like in GXS' acquisition of Celarix, many of the above capabilities are the result of HAHT's 2002 acquisition of channel management vendor iMediation and content exchange vendor arcadiaOne, which was purchased by iMediation immediately prior to HAHT's play. The acquired companies' customers included the dominant consumer products leaders Hasbro, L'Oral, Philips, and Virgin. This strategic acquisition has benefited HAHT by extending the product and brand information management and channel management components of its product portfolio, by increasing its European presence, and by increasing the size of its customer base, specifically in the consumer products industries.

This concludes Part Two of a four-part note.

Part One began the Event Summary.

Part Three will discuss the market impact.

Part Four will cover challenges and make user recommendations.

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