Prosperity, and even survival, for small businesses depends as never before on the ability to respond with speed and certainty to the challenges and opportunities that are presented by competitors and customers. Electronic Commerce provides an opportunity to increase competitive edge and consolidate and enhance both business to business and business to consumer trading relationships.
In the current competitive & fast moving world of E-commerce & Electronic data transfer , comes a highly relevant , yet , under-utilised system of data exchange -the Electronic Data Interchange , or the EDI.
EDI has no single consensus definition .Two generally accepted definitions are :
1.Standardized format for communication of business information between computer applications .
2.Computer- to- computer exchange of information between companies, using an industry standard format .
In short , Electronic Data Interchange (EDI) is the computer-to-computer exchange of business information using a public standard. EDI is a central part of Electronic Commerce (EC), because it enables businesses to exchange business information electronically much faster, cheaper and more accurately than is possible using paper-based systems.
Electronic Data Interchange, consists of data that has been put into a standard format and is electronically transferred between trading partners.Often ,an acknowledgement is returned to the sender informing them that the data was received. The term EDI is often used synonymously with the term EDT. These two terms are indeed different and should not be used interchangeably.
EDI vs EDT
The terms EDI and EDT are often misused .
1.EDT, Electronic Data Transfer, is simply sending a file electronically to a trading partner.
2.Although EDI documents are sent electronically, they are sent in a standard format.
This standard format is what makes EDI different than EDT.
EDI vs E-Commerce
EDI is also often confused with E-commerce itself , though , of course by those who are relatively novices to the technology . However, they may not be faulted as, even now, this method has not found use in many such areas where it may work wonders .
K .T MOHAN
Electronic Data Interchange & Applications in Business
EDI: Electronic Data Interchange
• What is EDI?
EDI is defined as the electronic transmission of business documents in a standard format between two companies.
• EDI & Electronic Commerce:-
Electronic commerce includes EDI & much more
EDI forges boundary less relationships by improving interchange of information between trading partners, suppliers, & customers
EDI semantic layer:-
Describes the business application
Requests for quotes
Specific to company & software used
Physical network infrastructure layer:-
Dial-up lines, Internet, value-added network, etc.
Specifies business form structure so that information can be exchanged
Two competing standards
American National Standards Institute(ANSI)X12
EDIFACT developed by UN/ECE, Working Party for the Facilitation of International Trade Procedures
EDI transport layer
How the business form is sent, e.g. post, UPS, fax
Increasingly, e-mail is the carrier
Differentiating EDI from e-mail
Emphasis on automation
EDI has certain legal status
EDI in Action
INFORMATION FLOW WITH OUT EDI :-
The fig shows the information flow when paper documents are shuffled between organizations via the mailroom
When the buyer sends a purchase order, then relevant data extracted & recorded on a hard copy.
This hard copy is forwarded to several steps, at last manually entered into system by the data entry operators
This process is somewhat overhead in labor costs & time delays.
INFORMATION FLOW WITH EDI :-
1. Buyer sends purchase order to seller computer
2. Seller sends purchase order confirmation to buyer
3. Seller sends booking request to transport company
4. Transport company sends booking confirmation to seller
5. Seller sends advance ship notice to buyer
6. Transport company sends status to seller
7. Buyer sends Receipt advice to seller
8. Seller sends invoice to buyer
9. Buyer sends payment to seller
EDI as a fast, inexpensive & safe method
EDI requires companies to agree on standards
– Compatible hardware and software
- Agreed upon electronic form format
How to Subscribe to EDI:-
Larger companies purchase hardware and software
Medium and small companies seek third-party service
– Value-added networking (VAN)
– Managed network services available for a fee