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Electronic Data Interchange

Electronic Data Interchange - WebCreatify

Description: Electronic Data Interchange transfers structured business documents internally among groups of departments Or externally with its supplies, customers, and subsidiaries. In Electronic Data Interchange(EDI). In EDI, information transferred over a network will not have to read, retyped Or printed but must have predefined structure agreed between the two company's which send received data. 

ELECTRONIC DATA INTERCHANGE (EDI) :

Basically Electronic Data Interchange (EDI) is the intercompany communication of business documents in standard formate. With the help of EDI, we can move the information directly from a computer application in one organization to an application of another computer. The Electronic Data Interchange specifies, what information goes where in a rekey information so that it can be accepted. The automated capability allows information to share swiftly, instead of the hours, days, Or weeks required with paper documents or other methods. 

EDI is used by businesses to integrate and share a range of documents. Like purchase orders, request for quotation, loan application, etc. In most cases, these organizations are trading partners that exchange good and services frequently as part of their supply chains and business to business (B2B) networks. 

AN OVERVIEW OF EDI: 

All EDI affairs are defined by EDI massages standards. It is important to have a quality governance procedure for data quality. Whenever the details are missing or in the wrong place, the EDI document might not be processed correctly. Standards are the basis of EDI conversations. There are many organizations that define the EDI message standards, which include ODETTE, TRADACOMS, GS1, PEPPOL, and Accredited standards committee X12 ( ASX12). 

 

fig.no.1.Electronic data interchange(enterimage.com)

EDI TRANSMISSION TYPES:

  1. Point To Point Or Direct Connections: Two computers connect with no go-between over the internet, generally with a secure protocol. 
  2. Value-Added Network (VAN): A third party network control data transmission, generally with a mail boxing paradigm. 

EDI internet communication protocols include secure file transfer protocol (SFTP), applicability statement 2 or AS2, an HTTPS-based protocol, simple object access protocol (SOAP), and others. 

EDI data buildup of data elements such as sender ID and receiver ID. Data fragment combines two or more related elements to give them greater meaning, FNAME and LNAME can combine to form CUSTOMER NAME for example. 

IMPORTANCE OF EDI:

The world as we know it passes on and depends on EDI, a universal, foundational B2B technology. It has gained conventional adoption throughout businesses worldwide as the preferred means to exchange documents in the B2B transaction process. 

As an automatic technology, EDI delivers core business benefits :

  1. SAVES TIME AND MONEY: Automates a process earlier manually executed with paper documents. 
  2. IMPROVES EFFICIENCY AND PRODUCTIVITY:  Additional or more business documents are shared and processed in less time.    
  3. REDUCES ERRORS: Rigid standardization of EDI helps to secure that information and data is correctly formatted before it enters business processes or applications. 
  4. IMPROVES TRACEABILITY AND REPORTING: Electronic documents can be consolidated with the range of IT systems to support data collection, visibility, and analysis. 
  5. SUPPORTS POSITIVE CUSTOMERS EXPERIENCES: Enables efficient deal execution and prompt, reliable product and service delivery. 


fig.no.2.Importance of EDI(businessbenifit.com)

EFFECTIVE EDI:

EDI implementation is difficult for some enterprises. One of the reasons behind it is the need to keep pace with shifting government regulations, standards, and updates. It is also innately complex, as it requires to accommodate the complexities of global business needs. For example, each marketing partner in business to business network present unique requirements. Even though partners may concur on which EDI document to use, each can have special formatting requirements that require to be supported. These elements, and others, have led many organizations to outsource their EDI. 

CONCLUSION:

The EDI is a computer to computer exchange of business documents in a special or common electronic format between trading business partners. It has reduced the data entry link, eliminates the need for a paper bases system and the improved business cycle. The two companies or groups which exchanged information through  EDI are called the trading partners or marketing partners. 


Rohit Tumane

Author

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