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Government and Finance Industry Urge Caution on XML

April 24, 2002

On 5 April 2002, the XML world received a double-dose of sobering news, as reports from both the U.S. General Accounting Office and NACHA, an electronic payments organization, urged their constituents to move cautiously on any commitment to XML. Both reports cite XML's bright promise but express concerns about its stability. Nonetheless, recent events suggest the industry has begun to get the message and started addressing these concerns.

The General Accounting Office (GAO) is the U.S. government's auditor and watchdog body. NACHA, which used to be known as the National Automated Clearing House Association, develops standards and best practices in electronic payments and claims to represent some 12,000 financial institutions through its regional affiliates.

GAO report linked to pending legislation

GAO issued its report, Electronic Government: Challenges to Effective Adaption of the Extensible Markup Language, in response to a request from Senator Lieberman of Connecticut, the chair of the Senate's Committee on Government Affairs, which has jurisdiction over government-wide IT issues. He is also the author of the E-Government Act of 2001 that the committee reported to the full Senate for action in March 2002.

The bill covers many aspects of the government's IT organization and operations but includes areas in which XML can play a vital role. Section 103 of the bill creates a federal Chief Information Officer (CIO), which would have responsibility for establishing and promoting IT "Standards and guidelines for interconnectivity and interoperability" as well as "Standards and guidelines for categorizing and electronically labeling Federal Government electronic information, to enhance electronic search capabilities."

These functions have high priority in the bill. Section 215 sets a deadline of 18 months after enactment of the bill (and a public comment period) for the Federal CIO to "issue a circular or promulgate proposed and final regulations requiring the interoperability standards of cataloging and indexing standards used by agencies."

Against this backdrop, the GAO investigated the status of XML to see if XML standards were ready for government-wide use and to discuss challenges federal agencies could face in adopting XML technology to promote information sharing and interoperability. The GAO and the e-government legislation define interoperability as "the ability of two or more systems or components to exchange information and to use the information that has been exchanged."

XML is sound technology

The GAO's report says XML can bring significant benefits to the way government handles information. If implemented broadly and consistently

XML offers the promise of making it significantly easier for organizations and individuals to (1) identify, integrate, and process information that may initially be widely dispersed among systems and organizations, and (2) conduct transactions based on exchanging and processing such information—a key element for federal agencies positioning themselves to provide electronic government services to citizens and businesses. (GAO-02-327, page 12)

GAO also notes that XML has at least the potential for overcoming some of the problems encountered with EDI for business data exchange, due largely to EDI's high cost of implementation.

The GAO discusses the advantages of standard data structures and tagging, a key objective of the legislation. The report noted standards can encourage data sharing and aggregation of the various platforms and computing environments found across the different agencies. As the report notes, "standard tags would make it easy to connect to each agency and exchange relevant information, because each exchange would use the same format to transfer the data and annotate (tag) what it means." (GAO-02-327, page 14).

The GAO outlines the core set of XML standards from the W3C including XML 1.0, XSLT and XSLFO, XML Schema, and XML Namespaces. It also lists a few of the supplementary standards: DOM, XLink, and XPath. The report discusses XML's extensibility which has resulted in important industry vocabularies and business frameworks. And the report discusses several federal applications of XML, including Department of Defense, Environment Protection Agency, Securities and Exchange Commission (the EDGAR system that predates the development of XML), Department of Justice, and Amtrak.

But business standards are still evolving

The report notes the maturing technical base for XML but found a continuing state of flux for the business standards that agencies will need for their day-to-day operations. While the findings show how generic XML technical standards make possible data tagging and document production, they represent by themselves only a beginning. Standards addressing business issues are needed for

(1) identifying potential business partners for transactions, (2) exchanging precise technical information about the nature of proposed transactions so that the partners can agree to them, and (3) executing agreed-upon transactions in a formal, legally binding manner.

In addition to these business process standards, a second group of standards is needed to codify the precise types of data elements that are to be exchanged when a business transaction is conducted. This need is being answered by the development of data vocabularies (or languages) designed to meet the needs of specific businesses and professions. (GAO-02-327, page 35)

The report says no consensus has yet developed for the standards to address the first group of basic cross-industry business functions. It lists ebXML, RosettaNet, and the set of three more established Web services specifications – SOAP, WSDL, and UDDI – as XML business frameworks that are seeking support among end-users. These frameworks have overlapping functionality and are in various stages of development. The GAO's findings note that ebXML has the backing of standards organizations – UN/CEFACT and OASIS – but is still working on its semantic interoperability functions. RosettaNet is the most established framework, but it was designed for the IT and electronics industries and does not have the blessing of cross-industry standards bodies.

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For specific industry vocabularies, GAO also found good concepts but incomplete execution. The report singles out three vocabularies as having potential for government-wide implementation: HR-XML in human resources, XBRL for business reporting, and Legal XML for creation of legal documents. GAO found these vocabularies to have useful functions and ambitious plans, but in each case they had completed only part of their agendas. Legal XML in fact has not yet completed any of its specifications.

Federal agencies need explicit strategy for XML implementation

The report looks into the process for managing XML in the federal government and came away with a mixed verdict. "The fact that the core XML standard is nonproprietary," says the report, "thus does not ensure that all applications built with it will also successfully interoperate" (GAO-02-327, page 45). With the ease of creating one's own XML data structures, according to the findings, agencies faced risks of ill-conceived and incompatible data definitions, vocabularies could easily proliferate, and individual operations could define their own proprietary extensions of accepted vocabularies. Federal agencies also need to keep a constant eye on security.

GAO says the federal government needs an explicit policy for its use of XML and a plan to carry out that policy but found neither. The two agencies responsible for IT policies and standards, Office of Management and Budget (OMB) and National Institute for Standards and Technology (NIST) have yet to define a government-wide strategy for the adoption of XML.

The investigators found that most of the government-wide activity in XML has been done by the XML Working Group, a committee formed by the federal interagency CIO Council. The working group, according to the report, has engaged mainly in education and outreach on XML, but it also has responsibility for identifying the relevant standards and best practices applicable to federal operations, as well as establishing partnerships with outside organizations and within federal communities of interest.

The report says the federal government needs to better organize and coordinate its participation in XML standards bodies. While representatives from several of the central technology agencies (OMB, NIST, General Services Administration, and the Defense Information Systems Agency) take part in XML standards bodies, no central focal point has been established to identify a cross-agency data format, nor is there a process for consolidated collaboration with standards organizations.

However, the government is not without models for coordinating their standards efforts. Agencies work through a Federal EDI Standards Management Coordinating Committee to speak with a single voice before EDI standards bodies, and GAO noted that a number of larger agencies are using EDI successfully as a result.

Registries are important to XML development

The GAO notes the efforts by the XML Working Group to identify and register the various XML applications underway in federal agencies, but it is still a work in progress. The report says the working group registered some 24 such projects but they did not include prominent activities at Justice Department and SEC that GAO discussed as examples of XML implementation.

A registry can provide a resource for systems developers to find similar work in operation or development, to make use of existing schemas and data definitions, and thus save time and money for the agency and taxpayer, and improve the chances for interoperability. The report recommends taking a bottom-up approach where agencies could list their applications in a registry, rather than having a central authority try to dictate a solution. While the registry would contain items relevant to government systems, it should link to relevant commercial registries, to provide a fuller picture for systems developers.

The report recognized that the schemas and data elements in a registry will not always fit into clean categories and that overlaps when addressing the needs of various communities of interest are to be expected. Nonetheless, even with the potential for some overlaps, a registry can provide developers with a snapshot of similar XML work that can encourage interoperability and help build systems more efficiently.

The GAO says a registry of this kind can be effective, "only if government-wide policies are set, guidelines established, and a defined management and funding process put in place to operate the registry" (GAO-02-327, page 55). The investigators note the XML Working Group has established a committee to define policies and procedures for registries, and the working group's draft XML Developer's Guide proposes requirements that agency developers make appropriate use of the registry.

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