RE: Comments on BP Documents - BP Overview

[Bob Haugen <linkage@interaccess.com>]

Responses to some of Stuart Campbell's comments:
>-*236 'resource exchanges' is a complete new and uncommon term and should be
>defined (or suggest to use more normal text)

Definition:  Resource exchange means an exchange of economic resources
between trading partners, for example, product or service exchanged for cash.
However, resource exchange could also mean barter, that is, cash would not
need to be one of the resources being exchanged.

Aside:  it is a standard term in accounting and economic literature.
[Bill McCarthy, got a better definition?]

>-268 re footnote - i do not see this REA is being either well accepted, well
>review or published - i and anyone else i have spoken to has never heard of
>it

I was responsible for bringing REA into ebXML and UMM (although
William McCarthy is responsible for REA itself, and is also a member
of the ebXML BP group).

Coming from a background in ERP software, I did more than a year 
of research looking for a proper semantic model for multi-company
Internet-based business systems.  I ran into REA at the OOPSLA
Business Object Workshop in 1997.  The OOPSLA BOW has
recommended REA as a building block for all new business software
since then.  

"There are specific design patterns that should be implemented throughout business systems that will substantially improve reusability and rigor in business systems logic. The "Give/Take" pattern that has been standardized by accounting research should be rigorously implemented in all business systems and mandated in all accounting systems.
"The REA Accounting Pattern should be implemented as a prototype for the next workshop" 
- Jeff Sutherland
* note: by "Give/Take", Sutherland means REA.
http://jeffsutherland.org/oopsla97/index.html 
See also http://jeffsutherland.org/ for other BOW workshops with REA
papers and recommendations.

REA is an abstraction from a variety of operational business
software systems.  It has been used explicitly in an IBM internal
system, PriceWaterhouseCoopers' commercial Geneva project,
my small company's supply chain software, and an upcoming
ERP accounting framework that I am not sure I can talk about.

The Automotive Industry Action Group is also starting to use
REA in their Business Modeling Work Group, for modeling
supply chain relationships and their material management
contractual relationships.

There are several commercial software models that are the
same as parts of REA, probably without being aware:
* the pegging structures that connect sales orders, work orders
  and purchase orders in the MRP and DRP (Distribution Requirements
  Planning) modules of ERP software;
* i2's Advanced Planning and Scheduling software;
* most commercial supply chain software.

Jim Clark has been championing REA in UN/CEFACT TMWG,
where it has already been adopted into UMM.
Karsten Riemer has been championing REA in OMG-EDOC.

The ISO-Open EDI reference model (another parent of ebXML)
describes Commitments and their relationships in a way that
is exactly the same as REA.

One change that will be made in the BP documents is that all
references to REA will be changed to the UMM Economic 
Elements.  UMM is an official reference document for ebXML;
REA is not. (But of course the UMM Economic Elements are based 
on REA.)

For ebXML, REA (alias the Economic Elements in UMM)
provides an abstract framework for recognizing events of
legal and accounting significance, and defining relationships
among business transactions, for example order-fulfillment-
settlement, in accordance with the Open EDI definitions.

REA is very well accepted, reviewed and published in the academic
accounting community. See: http://www.msu.edu/user/mccarth4/
It is the basis of at least one major accounting textbook, and used
in several others.

Sorry you have not heard of it.  It would help you tie ebXML to
internal business systems better, which I understand is a 
major part of your company's business.

Regards,
Bob Haugen