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POTENTIAL ADVANTAGES OF SEMANTIC WEB FOR COMMERCE

Yuxiao Zhao, Kristian Sandahl Dept of Computer and , Linköping University, S-58183, Linköping, Sweden Email: [email protected], [email protected]

Keywords: Semantic Web, Internet commerce, Application

Abstract: Past decade saw much hype in the area of information technology. The emerging of semantic Web makes us ask if it is another hype. This paper focuses on its potential application in Internet commerce and intends to answer the question to some degree. The contributions are: first, we find and examine twelve potential advantages of applying semantic Web for Internet commerce; second, we conduct a case study of e- procurement in order to show its advantages for each process of e-procurement; lastly, we identify critical research issues that may transfer the potential advantages into tangible benefits.

terms graduate student and doctoral student. Thus you will not miss people just because of the different wording on the Web pages. A more advanced 1 INTRODUCTION example is to employ a taxonomy of university subjects and thus noting that information systems To consume remote data, an entity has to face can be part-of departments of economics, computer two issues: (1) how to access to them; and (2) how science etc. The intention is that the ontology should to understand their meanings. Humans can consume be used by all actors in the field of businesses Web data, because (1) Web provides a mechanism to thereby easing information exchange. As an example access to them; and (2) humans themselves are able of an rule, the university ontology knows understand their meanings. Computers also could that every graduate student has at least one thesis consume Web data, because (1) they can access to advisor. Once you find an interesting graduate them by using the same mechanism as humans; and student, call him Ted, it becomes possible to search (2) they could understand their meanings via for other graduate students of the advisor of Ted. semantic Web (SW). SW is not a separate Web but Currently SW is coordinated by W3C Semantic an extension of the current one, in which Web working groupi and is based on XML, XML information is given well defined meaning, better Schema, RDF/RDFSii. The Web ontology enabling computers and people to work in (OWL)iii, the key enabling technology of SW, is cooperation (Berners-Lee et al 2001). So far, no way proposed and being built from the DAML+OILiv has been found to allow computers to simulate (Hendler and McGuinness 2000; Fensel et al 2001a; humans’ capability in understanding the meanings. McGuinness et al 2002; Fensel 2002). However, an ontology-based method can ease the It is well known that SW can be applied in Web problem to some extent. Although the method is not annotations, software agents and Internet commerce. explicitly new, the upcoming scale and scope of For , it has been broadly studied deployment over the Web offers great potential as (Heflin and Hendler 2001; Noy et al 2001; Nagao et well as challenges (Linden 2001). al 2001; Euzenat 2002a). It intends to: (1) develop The essential element of SW is the ontology of basic ontology syntax and tags based on used in the domain. The ontology can RDF/RDFS; (2) develop ontology-based rule represent relations between concepts in taxonomies, reasoning; (3) build a domain ontology using such as equivalence, part-of, and is-a. In addition the ontology authoring tools; (4) create the ontology- ontology can represent rules for logical reasoning based for a Web content; and (5) find the about concepts. Assume, for instance, that you are right information via advanced . searching the Web for graduate students in For software agents, numerous applications have information systems. Your ontology can help expand been dreamed and/or created (Berners-Lee et al the search by representing the equivalence of the 2001; Hendler 2001). Recent publications saw the

apparent trend of combining SW and Web service, SW enhances search mechanism with respect to which is a software application identified by a URI, exactness and amount because of the standardized whose interfaces and bindings are capable of being Web annotations and service descriptions. Currently defined, described and discovered as XML artifacts keyword searching creates the all-or-nothing results. (Austin et al 2002). It is to develop distributed and Ontology-based searching uses the relationships and loosely coupled Internet computation. At least two axioms of concepts, thus it could filter some projects are found: DAML-S (DSC 2002) and SW seemingly appropriate but unwanted results and add enabled Web services (Fensel et al 2002). The some seemingly different but actually same results. former is to build DAML+OIL ontology for Web The advantage has been confirmed in the arena of services in the application level in order to enable (OWS 2002), while Schreiber such tasks as discovery, invocation, interoperation, et al (2001) believe there is a long way to go to composition, verification and monitoring of Web actually prove that ontology-based search is better services. The latter aims to create a Web service (in some respects) than keyword search. modeling framework, a discovery mechanism and Internet commerce has to search for the right some scalable mediation services. products and services, business partners, customers For Internet commerce, although the applications and Web services. One of hard ebXML (e-business of SW have been paid attention and extensively XML) issues is to search exactly what we need and mentioned (Berners-Lee et al 2001; Hendler 2001; how to search core components that represent Fensel et al 2001a; McIlraith et al 2001), it is still in business processes (Hofreiter et al 2002). Ontology- the initial phase and lacks convincing benefits and is based search could help ease the difficulty. difficult to evaluate (OWS 2002). This paper A2. Agents highlights the applications of SW for Internet Agents are programs acting on behalf of another commerce, aiming to find its potential advantages so person, an entity or a process. Intelligent agents are as to define critical research issues for transforming widely known and useful for application automation these potential advantages into real or tangible ones. and Internet commerce (Hendler 2001; Blake 2001). So we target those readers who try to combine SW For example, Hendler (2001) indicated that and Internet commerce for producing novel value- ontology-based intelligent agents could obviously added applications. Note that the of Internet enhance application integration and thus improve commerce here is broad, not only focusing on the Internet commerce. Cost et al (2002) developed an activities of electronically buying and selling but intelligent online service called ITtalks that also including its related business processes. facilitates user and agent interaction for locating This paper is organized as follows: Section 2 talks on IT. Payne et al (2002) developed a semantic identifies potential advantages of SW for Internet calendar agent. commerce. Section 3 presents a case study for e- A3. (KM) procurement to show the potential benefits of SW in KM includes the processes of capturing, each business process. Section 4 provides some extracting, processing and storing knowledge. research issues for SW to be applied for Internet Ontology allows Web data meaningfully related commerce. Section 5 concludes the paper. instead of existing linked Web, no matter whether they are structured or non-structured (Heflin et al 2002). Fensel et al (2001b) addressed structuring, standardizing, aligning and personalizing various 2 POTENTIAL ADVANTAGES contents in B2B (Business-to-Business) e- commerce. Casati and Shan (2002) showed how to The essence of SW is to develop ontology-based improve business analysis by introducing the in terms of some standards, thereby semantics of business process execution data. making information given formal, explicit meaning The advantage of KM is realized via ontology and thus machines understandable. The semantics manipulation, which needs support tools, e.g., can cover any structured or non-structured data and ontology creating (Noy et al 2001), ontology applications, such as Web sites, Web services, learning and manipulation (Staab et al 2001; devices, flow data, . Maedche and Staab 2001). OWS (2002) categorized Ultimately derived from semantics and standards, the tools for ontology-based applications into five twelve SW advantages over previous Web have been types: ontology-related inference engines, topic identifiedv. But it is under investigation whether maps, content management, information retrieval these advantages can be utilized to create real ROI and information visualization. (return on investment) for end users. The detailed A4. Integration examinations one by one are as follows. Integration here indicates business cooperation as A1. Search an entity, internally and externally, to achieve

business goals. Ontology can be used for specifying consumption. An enterprise always has to process a the terminology of heterogeneous systems, and huge amount of e-commerce data. Theoretically ontology mappings can resolve the mismatches filtering via semantics could be more effectively between the systems, thereby realizing semantic than keyword filtering. integration (Cui et al 2002). A8. Machine dialogue across the domains SW technology could ease the messaging Ontology provides formal semantics, thereby between applications and foster software component making not only humans but also machines reuses and B2B automation. The combination of SW understandable. In addition ontology mappings or and Web services is changing the integration translation could foster the understandings between between applications internally and externally, domains so as to enable the dialogue across multiple thereby enabling standardized, searchable and domains. Ontology translation could bridge them. intelligent agents on the Web. The semantic B2B Internet commerce requires automatic negotiation engine is emerging to allow business partners to and contracting for all searched results. This feature understand document syntax and semantics, and thus could significantly help machines process a large to transfer the exchanging documents into the right amount of business partner information that humans applications to process (Bussler 2001). cannot handle, and thus save time and money. A5. Composition of complex systems A9. Virtual community It is possible to compose numerous Web services Some enterprises for common interests can be and Web contents to produce one more complex tightly connected on the Web and form a virtual system (Piccinelli et al 2001; Casati and Shan 2001; enterprise, due to the mutually benefited preferences Fensel 2002; Sheth et al 2002; Euzenat 2002b). The defined in terms of ontology. Ontology also can be complexity reflects that the composed system could used to define relationships in the community from statically and dynamically span multiple decoupled forming, organizing, communicating to demising Web services and contents with complex workflow, automatically. involving discovery, substitution, composition and A10. Online advertising management. In addition, we also have the non- Online advertising can be exposed via more functional requirements such as availability, security easily and more exactly searched ways. It not only and trust (O’Sullivan et al 2002). Some scalable waits for humans to click but also for machines to mediation services are needed for direct connectivity consume. It could be found through efficient search (Fensel et al 2002). engines and processed by software agents, and thus So far there exist two representative composition directly contribute to Internet commerce. As one of : DAML-S (DSC 2002) and Business DAML projects, the Software Agent Group of the Process Execution Language for Web Service Robotics Institute, Carnegie Mellon University, (BPEL4WS 2002), which is a merger of Web Nokia Research Center and German Research Services Flow Language (Leymann 2001) from IBM Center for AI have been researching on agents and and XLANG (Thatte 2001) from Microsoft. If it tools for advertising and brokering. becomes realistic, the composition could create a A11. Serendipity (unexpected benefits) new software development model and a new The business partners normally tend to be quite industry conducting software composition. fixed, stable and long-term. Through SW techniques, Internet commerce spans multiple organizations there is a higher possibility of finding unexpected and thus the composition may be very suitable for it, partners, customers as well as superior products and especially for automatic negotiation and contracting services, and thus collecting benefits (Heflin et al (Maes et al 1999; Hummer et al 2002; Ströbet 2002). (2002). Probably serendipity service providers will A6. Multimedia collection emerge to help collect the benefits. A collection handles a set of non-textual objects A12. Vocabulary flexibility & standardization such as images and audio. SW via ontology offers a Theoretically, ontology mappings and translation way to enable semantic annotations that could be allows users to flexibly choose the words they like. easily organized and found (Schreiber et al 2001; Since users are diverse and it is hard to require them Heflin et al 2002). Nearly all e-commerce Web sites to fully know the standards, this advantage could be have to handle a large amount of images and audio interesting. of products and services. In practice, Fillies et al (2002) demonstrated in a A7. Information filtering financial group how to create a central vocabulary Information filtering occurs in the processes of within an ontological context, to standardize the information receiving, sending and storing by concepts, and to improve the communications filtering unwelcome data and Web services between different departments. invocation, sending selectively to the right clients Flexibility and standardization seem conflicting. and storing in the right place for the value-added In fact they reflect different developmental stages of

SW. In the initial stage, vocabulary standardization marketplace for m suppliers and n buyers; (3) could be prioritized, whereas with the emerging and Auction-based pricing for m suppliers and one maturity of ontology mapping or manipulation tools buyer. Our case study just focuses on (3). the advantage of vocabulary flexibility will show up. For the scenario of unknown business partners, a business partner needs to find the right partners through registry and search mechanism. The 3 E-PROCUREMENT AS A CASE following automatic functions for one buyer are necessary: (1) the buyer registers its profile and STUDY preferences so as to let any suppliers know its buying interests and related data such as credit To apply SW in e-procurement, there are two status; (2) the buyer finds a set of the right suppliers possible approaches: centrally and distributed. By quickly; (3) the buyer negotiates with the suppliers centrally, the suppliers register their profiles in some one by one with the least human involvement; (4) centrally distributed registries so a buyer can search the buyer makes the contract with the right suppliers. them, e.g. UDDIvi. So far nearly all e-procurement For the scenario of known business partners, the software takes this way. By distributed, the suppliers transaction continues with the following automatic build their Web sites and specify the metadata in functions for a buyer: (5) the buyer receives the terms of some standards that guide each buyer to purchased products with the right quality and date; exactly find themvii. E-procurement software (6) the buyer pays the supplier according to the normally doesn’t take this way, maybe because it contract. demands thoroughly elaborated data. Conversely, For each process, Table 1 shows basic tools and knowledge management software almost takes this agents, special tools and agents needed for Internet way. commerce, and potential advantages using SW. E-procurement software is normally built for three cases: (1) B2C (Business-to-Consumer); (2) e- Table 1. # Process Basic Tools and Agents Tools and Agents for Internet Potential Advantages commerce 1. Register a A tool to register. What data items to be registered; A12. Flexible vocabulary profile How to certify the data integrity; How to handle the dynamics. 2. Search Search engine on the Internet Highly precise search and process A1. Search the suppliers and local ; without missing the critical suppliers; A2. Agents Extract/analyze the data; Catalogue change management; A3. KM Filter the suppliers; Benchmarking is needed. A6. Multimedia collection Receive the data of the new A7. Information filtering suppliers. A10. Online advertising A11. Serendipity A12. Flexible vocabulary 3. Negotiate Ask the unspecified info; Prioritize the suppliers with quality, A2. Agents with Feedback to suppliers; delivery and past relationships; A3. KM suppliers Find the feasible supplier(s); How many rounds to negotiate; A4. Integration Inform the suppliers. When human intervention is needed; A8. Machine dialogue How to collectively bid. A11. Serendipity 4. Contract Send/receive the contracts; Legitimate issues; A4. Integration with Dynamically handle exceptions; Insurance mechanism. A5. Composition suppliers Build and add the knowledge A7. Information filtering base of suppliers. A9. Virtual community 5. Confirm Trace the transportation; Exception handling; A3. KM the Receive the products; Quality checking. A4. Integration purchases Check the quality; A5. Composition Report the results. 6. Pay the Link the results with contracts; Security and reliability; A3. KM suppliers Pay for the purchase; Invoicing and statement; A4. Integration Add the knowledge base. Continuous improvement. A5. Composition

In short, the SW technology could be applied in System (NAICS), the Universal Standard Products the following aspects: and Services Code System (UNSPSC), and the ISO 1. Searching for more exact and relevant data Geographic taxonomy (ISO 3166) (Curbera et al using flexible words, e.g. products and services. 2002). These taxonomies are available in the non- 2. B2B automation and ubiquitous computing via ontology forms and certainly can be reused to build intelligent agents. the ontology in terms of the existing ontology 3. Online marketing through ontology-based languages such as DAML+OIL and OWL (Zhao metadata description, thereby resulting in being 2003). Without basic ontology it is fairly difficult to easily searched and processed. start; or if started, it has created new integration 4. Using flexible vocabulary for annotating and issue. So it urgently demands building/organizing registering Web contents and services as well as the ontology. How to do that is an open issue. 1. communications. Two ways could be taken, either combining these 5. Virtual community formed through ontology- taxonomies and/or the existing ontologies into one based computing. or translating each one and then keeping them 6. KM enabling dispersed and unlinked consistent through some mediation services. 2. For documents (customer information and product data) the first way, what are the criteria to evaluate if the to be organized. single ontology is complete and efficient enough to 7. More complex workflow management calling support the related applications? What are the for sophisticated mediation services such as theories behind ontology conflict detection, ontology mappings and mergers. resolution and merger? 3. For the second, what are the mediation services and who will maintain them and how the services from multiple vendors are 4 RESEARCH ISSUES integrated? 4. Both may need to show how to link the well-known vocabulary such as WordNet, and its usability. It is not easy to apply SW in Internet commerce, Semantic routing could be interesting. Semantic mainly due to the obvious contradiction between the routing, differentiated from normal routing without opennessviii of SW and the serious requirements for ix considering the meaning of the message, is to route Internet commerce. Besides some common issues , the requesting service to the right responding the following issues can be critical. services at the application level by processing its To demonstrate the benefits of SW for Internet metadata and contents. Two cases exit. One is for commerce, one of the direct ways is to develop some the processes of dynamic service composition on the applications using SW and to show its tangible Web, which demand analyzing the semantics of the benefits and technical maturity if possible. We can requesting service, decomposing it to multiple conduct the following experiments: growing the services to meet the objectives, routing each applications from the simplest business process to responding service to the right one among many more complex ones. For instance, (1) it is interesting options, and composing the whole service. The other to build an agent to automatically and dynamically is to route the requesting service outside an create a new catalogue of the suppliers or to modify enterprise to the right applications/services inside the existing one. Thus the dynamic catalogue the enterprise in terms of availability, geography, providers may reduce the workload of buyers and pricing, and/or response time. Semantic routing enhance the performance of buying. (2) An agent is could be applied to enhance the intelligence and needed to automatically report the special sales from dynamics of supply chain planning in e-business. many suppliers. (3) A filtering agent filters those Another issue is the migration. Taking advantage unwanted information and malicious codes. of SW technology is subject to the existing One fundamental issue for Internet commerce is x technology and related investments. Some lack of basic ontology for the domain . This conditions and infrastructures are significant and ontology should lay a solid foundation for future unchangeable in some period of time, for example, development and may cover the existing standards no standardized ontology language, the extent of (Zhao 2001; Zhao and Sandahl 2000), e.g. EDI business partners’ adoption, interoperability, etc. To (Electronic Data Interchange), OBI (Open Buying leverage SW technology in Internet commerce, it on the Internet), ebXML, UDDL, RosettaNet and cannot ignore the past investments in the exiting xCBL (XML Common Business Library), involving techniques. The obvious benefits of running both the classifications of business processes, technologies in parallel can enhance the quick components, products & services, geographies as adoption. well as and currency. For example, UDDI Special for Internet commerce selects the North American Industry Classification should be studied. Are there any special

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v We attempt to categorize these twelve potential advantages as business and technical advantages. But we find it hard because their relationships are interweaving and the categorization may cause unnecessary misunderstandings. vi Universal Description, Discovery and Integration, see http://www.uddi.org/. vii Schatz (2002) provided a distributed way to navigate concepts through semantic indexing locally and an analysis environment to navigate the indexed contents. Ontology is used to glue concepts, categories and collections for further development. But it didn’t mention feasibility for handling business processes. viii One of motivations of RDF design is applied in applications that require open rather than constrained information formats (e.g. scheduling activities, describing organizational processes, annotation of Web resources, etc) (Klyne et al 2002). Euzenat (2002b) also emphasized the openness of SW. ix For example, more skilful professionals in XML, RDF, ontology, artificial intelligence, etc; tightly cooperation with industry standards; ROI demonstration; service pricing; stable and neutral specifications; privacy & trust. x Many exist in http://www.daml.org/ontologies/, but they look in the rough state and lack validation and verification but they do offer a quick start. McGuinness (1999) built the huge ontology for e-commerce but we cannot find its source so far. Fensel et al (2001b) presented the prototype ontology of product catalog in terms of UNSPSC. Lack of basic ontology results in building individual ontology from scratch and/or using various ways: DTD, XML Schema (Ströbet 2002), RDF/RDFS (Fillies et al 2002), DAML+OIL (Cost et al 2002), DAML-S (Paolucci et al 2002), or multiple ways like Payne et al (2002) using ways of RDF, DAML, DAML-S, etc.