Consensus Building: X12’s Cornerstone for Standards Development
By Cathy Sheppard
Cathy Sheppard is executive director of X12 of Arlington, VA.
Josh Kallmer, executive vice-president of the Information Technology Industry Council, said in a July 29, 2019 letter to Financial Times, “The US technology sector has long supported an industry-led, voluntary, consensus-based model of standards development because it works ─ and in the world of standards, the first move is not the last.”
With an incalculable investment of time and resources, it’s true that the world of developing standards to shape new interoperable technologies is a highly structured process. This proven process, albeit time-intensive, involves various mechanisms for creating, vetting, and approving standards supporting an evolving solutions roadmap.
At the center of rigorous standards development is consensus building, defined by the Program on Negotiation at Harvard Law School as a process involving a good-faith effort to meet the interests of all stakeholders. A consensus-building approach allows groups to reach an agreement among relevant stakeholders and maximize the overall gains to everyone.
Appropriately, the first tenet of X12’s six corporate principles is: Publish high-quality, consensus-based standards that are simple, efficient, responsive to the needs of stakeholders, and delivered in a timely manner.
X12 is an ANSI-accredited Standards Developer that has been focusing on the development and ongoing publication of cross-industry interoperable data exchange standards for more than 40 years. X12 develops and maintains its work for use by implementers in different formats that are proven, reliable, efficient, and effective to drive business processes globally. With more than 320 transaction standards, 1,400 data elements, and in excess of 40,000 codes available for use, X12’s body of work can be used to conduct nearly every facet of business-to-business operations.
In fact, billions of transactions based on X12 standards are utilized daily to facilitate rich and consistent standardized electronic exchange across various industries including finance, government, healthcare, insurance, supply chain, transportation, and others.
In the health insurance industry, X12’s activities support transactional standards, processes, and activity reporting used by commercial and government healthcare organizations. For example, X12 standards provide for eligibility and benefit inquiry and information response, claims, and code lists.
The Provider Caucus is an informal industry group comprised of X12 member representatives who advocate issues on behalf of healthcare provider organizations. Provider participation in subcommittee workgroups is encouraged to ensure their important viewpoints and collective knowledge are included in the collaborative discussions.
As the world continues to bravely battle the pandemic in 2021, X12 is proud that healthcare organizations are actively using X12 standards to electronically transport medically necessary information whenever and wherever needed to advance patient care operations.
Voluntary consensus benefits B2B standards development
From batch processing of large amounts of data to the proliferation of digital technology innovations, X12 standards have evolved to allow more people to use standards in different ways. But the wealth of four decades of X12’s strong, collaborative work remains critical to standardized messaging, powering an expansive vocabulary of data elements and constructs that unlock many opportunities to develop creative, interoperable solutions to complex business challenges.
For X12, consensus means that its diverse membership of technologists and business process experts has an equal voice in a non-competitive, safe forum deciding what those business-to-business transactions should comprise and how they should be formatted. Large member companies are not favored over smaller member companies.
X12 members listen to each other’s interests, ask questions, and gather shared knowledge weighing the pros and cons of implications in the decision-making process of developing or updating a standard. These companies are committed to working to find solutions that the majority supports.
As both technology and X12’s ability to support trading partners through different products advance, consensus standards must also evolve. Consensus standards must progress over time to ensure they continue to meet the needs of stakeholders and stay in tune with emerging interoperable technologies. For example, the X12 Unit or Basis for Measurement Codes have changed 600 times over the past 33 years.
X12’s approach to consensus-based standards development
To remain competitive and profitable in today’s economy, a seamless electronic exchange of business data among the company, partners, and customers is necessary. X12 standards establish a common, uniform language that facilitates business transactions.
X12 employs a three-prong approach to consensus building among stakeholders:
- Open-minded, with vision and insight related to data exchange in both current and developing technologies.
- Responsive to business requirements presented by other organizations.
- Collaborates enthusiastically with other SDOs, industry groups, government, and business-focused entities.
X12 members meet regularly to develop and maintain high-quality data standards that streamline and facilitate consistent electronic interchange of business transactions. X12 standards support transactions such as order placement and processing, shipping and receiving information, invoicing, payment, cash application, administrative healthcare, and insurance data.
X12’s open, transparent, and consensus-based environment empowers members to voice comments, recommend changes or updates, and address and vet issues from every point of view. Looking through a technology lens, members take into account the particular business workflows and use cases to create standards supporting e-transactions and enhanced interoperability that crosses industry and company boundaries.
Anyone, including the general public, can submit a request, idea, or suggestion for revising or developing X12 standards or products by completing this form, accessible on the X12 website. X12’s current maintenance request process supports a predictable annual release cycle and is frequently referenced as ARC, as illustrated below.
Supporting a consensus building process, X12 members drive all aspects of standardization work, including defining the scope, content definition, and technical content. In simplest terms, the multi-layered maintenance and stakeholder process involves extensive vetting and negotiation among member representatives and other materially interested parties. Members also have the option to vote whether to approve revisions, and if approved, the revisions undergo both technical and quality assurance reviews prior to publication. X12 publishes new versions of its consensus-driven products annually.
“Change is the only constant in life,” said the Greek philosopher Heraclitus. True, but as technology has brought exponential growth and rapid change, some constants in business must remain in order to help the future thrive.
Tens of thousands of organizations count on X12 to develop high quality standards upholding business-to-business information exchange. X12 members are confident knowing that X12 transactions are grounded in a consensus-based approach designed to benefit users and satisfy their business needs, today and tomorrow. Having an equal voice is key to achieving fairness in mutually accepted solutions.