Edi Electronic Data Interchange Essay Research Paper

Edi Electronic Data Interchange Essay, Research Paper

What is EDI. EDI is the transmission of structured data messages between computer applications. This method of moving information has already made great strides into the Automotive, Transport and Retail business sectors in the past few years and looks set to become the primary method of business data transfer in the next century. Why EDI. The concept of the ‘paper-less office’ may still be a contradiction in terms but EDI does at least offer an alternative method to the post, facsimile and telephone services, all of which still generate copious amounts of paper. The use of e-mail has already demonstrated the efficiencies of information sharing in an inter-office environment. EDI is the next step between involving businesses in a inter-company environment. The basic advantages of electronic trading are:- Reduced time sending receiving and processing information. – Reduced inventory stock and storage costs – Increased quality of information – Closer relationships with Trading Partners – Latent potential for other systems. MisconceptionsA common misconception about the EDI industry is that it is some type of videotext service or is some physically remote on-line ordering system. Certainly EDI borders onto these areas but what defines EDI is industry agreed message standards, electronic mailboxes and clearing houses. Another inaccuracy is that EDI is such a technical subject that it can only be developed in an I.T. department. Nothing could be further from the truth. EDI is too important a tool to be left entirely to an I.T. department s control. It defines how you negotiate contracts , how you interact with your suppliers, how efficient you are and how the outside world perceives you. Take the example of Viglen, an innovative leader in the Personal Computer market who now advertise EDI facilities to take electronic purchase orders. They know a fax has to be rekeyed, a telephone caller may have to wait but a successful electronic purchase order can go straight on a warehouse picking-list. The latent features of EDIHowever attractive the most immediate benefits listed above (there are many other published discussions on these aspects of EDI trading) the real leverage in EDI is the chance it gives a company to re-engineer its business processes and rethink the flow of information through a organization. These aspects are not always fully appreciated at the onset. Companies with established EDI links often cite the degree of control that EDI gives as the most positive benefit. It is this level of control that makes an implementation of EDI a strategic rather than a technological decision.There are four areas necessary for a successful EDI implementation. They are in order of importance :- · International , published standards · Mature communication networks · Dedicated software · Reliable hardware. 1. StandardsThe role of international standards is a prerequisite for computer applications talking to one another. Message formats for electronic forms must be at a higher level than an inter-company agreement for diversification and ambiguity has no place in the EDI world. 2. CommunicationsAnybody who keeps abreast of current events cannot fail to see the almost daily news item on communications links and the ‘Information Highway’. This is a positive benefit for EDI implementations as these are the foundations for EDI traffic. The success of the communications industry is enhanced by fixed and internationally agreed methods of transmitting data and it is these standards such as X.400 and X.25 which are the arteries along which EDI runs. It is now just as easy to send an EDI purchase order to Boston as it is to Alfred. There are also network providers who offer Value Added Networks (VANS) to ease the transition into electronic trading. 3. EDI software as a commodityToday there are a growing number of specialist companies which sell off-the shelf packages adaptable to the major world-wide EDI standards. Alternatively EDI software can be written in-house. For a company planning an EDI front-end onto their existing applications an EDI software project implementation would fall into three broad categories. · Message Maintenance. · Message composition and translation. · Adaptation of the existing software. Message Maintenance SoftwareAn electronic Data Dictionary should be maintained of all the message formats that you intend to use. This can then be used by the translation and composition software to ascertain if the incoming message is syntactically correct and also generate any outgoing messages correctly. Message Composition SoftwareThe construction of a message format such as an invoice is agreed by an EDI protocol standard. The EDI world is dominated by two similar but incompatible standards. EDIFACT & ANSI X.12. The emerging international EDI standard is the EDIFACT protocol (ISO 9735) sponsored by the United Nations. It has a large following in Europe, but significant numbers of US firms still use the ANSI X.12 standard. Within each industry there are implementations of messages that follow one of the major standards and define message types specific to that industry. Each common business transaction that you wish to make such as a request for materials, an invoice etc has a particular message. Pairs of these messages or single reoccurring messages make up the EDI transaction. For instance a Purchase Order message request might return a