You might have a file that could have been generated by any number of systems, need to parse this in such a way that BizTalk understands and can work with it. In all cases that is going to be XML. Your flat file schema is essentially instructions on how BizTalk and is going to parse and then convert this flat file into XML, as well as serve as a formal definition of how this XML should be structured. These schemas are useful when you are defining a a receive or send pipeline. You will need to use a flat file disassembler or assembler respectively.