Another definition of EDI

What is EDI?

What is Electronic Data Interchange (EDI)? Unlike other electronic data interchange articles, this piece will help provide a complete understanding of the electronic data interchange process, including an overview of EDI benefits and drawbacks.

Basically, the electronic data interchange process is the computer-to-computer exchange of business documents between companies. EDI replaces the faxing and mailing of paper documents. EDI documents use specific computer record formats that are based on widely accepted standards. However, each company may use the flexibility allowed by the standards in a unique way that fits their business needs.

EDI is used in a variety of industries. In fact over 80,000 companies have made the switch to EDI to improve their efficiencies. Many of these companies require all of their partners to also use EDI.

Overview of EDI Benefits and Drawbacks

The EDI process provides many benefits. Computer-to-computer exchange of information is much less expensive than handling paper documents. Studies have shown that processing a paper-based order can cost $70 or more while processing an EDI order costs a dollar or less. Much less labor time is required. Fewer errors occur because computer systems process the documents rather than processing by hand.

EDI transactions between companies flow faster and more reliably than paper documents. Faster transactions support reduction in inventory levels, better use of warehouse space, fewer out-of-stock occurrences and lower freight costs through fewer emergency expedites.

Paper purchase orders can take up to 10 days from the time the buyer prepares the order to when the supplier ships it. EDI orders can take as little as one day.

Drawbacks are few and far between, but there are some. For example, companies choosing to implement both paper and EDI processes must manage both of these processes. However, as stated before, using EDI is much more efficient than using paper, lending strength to the argument against paper documents. Also, companies must ensure that they have the resources in place to make an EDI program work; however, the need for these resources (or their hiring) may be offset by the increased efficiency that EDI provides.

Here is an example of how the electronic data interchange process works. A buyer prepares an order in his purchasing system and has it approved. Next, the EDI order is translated into an EDI document format called an 850 purchase order.

The EDI 850 purchase order is then securely transmitted to the supplier either via the internet or through a VAN (Value Added Network). The buyer's VAN is a like an electronic post office that interconnects with the supplier's VAN. The VANs make sure that EDI transactions are sent and received. The supplier's VAN ensures that the supplier receives the order. The supplier's computer system then processes the order. In the case of CovalentWorks' clients, we provide VAN transportation and our servers provide all of the software and hardware required to process EDI documents. Only internet access and email are needed.

Data security and control are maintained through out the transmission process using passwords, user identification and encryption. Both the buyer's and the supplier's EDI applications edit and check the documents for accuracy.

EDI Requirements

Each trading partner has unique EDI requirements. These will include the specific kinds of EDI documents to be processed, such as the 850 purchase order used in the example above, 856 advance ship notices and 810 invoices. The fact is that most any business document that one company would exchange with another company can be sent via EDI. However each EDI document must be exchanged with the partner in exactly the format they specify.

Many partners will have an EDI implementation guide or kit that explains their specific requirements. Maps are required to translate the EDI documents from the trading partner's format into the format that is useable by the receiving party. CovalentWorks handles all of the mapping and translation requirements for our clients.

EDI capability involves either buying or outsourcing the following components:

    * Software for communications

    * VAN service for EDI transmission

    * Mailboxing of EDI transactions

    * Mapping

    * Translation

VAN, ASYNC, BISYNC and direction connection and Internet communications will be required by various partners. A server or PC, communication devices and peripherals will be needed as well as secured office space, monitored security, backups and redundant power. Additional software will be needed if integration of the EDI transactions with back office systems is desired. A VAN will need to be contracted for transmissions. Personnel must be trained in how to use the software and communication devices. Maps will then need to be developed.

EDI overview

EDI: What is it?

EDI is simply the sending and receiving of information using computer technology.

Its efficiency has made it a condition of doing business in dozens of industries, including retail, grocery, warehousing, transportation (rail, ship, and trucking), health care, education, real estate, and government. Any standard business document that one company would exchange with another (such as a purchase order, invoice, shipping schedule, inventory inquiry, and claim submission) can be exchanged via EDI between two parties, or trading partners, as long as both have made the preparations.

EDI cannot be activated with a flip of the switch or in a moment's notice. Many procedures must be carried out in preparation for exchanging EDI data with a trading partner. This will be explained in a later section.

The use of EDI is not limited by differences in companies or communication methods. Instead, EDI bridges the information gap that exists between companies using different computer systems.

Although this tutorial makes many references to the ANSI X12 standards, note that other standards exist. For instance, EDIFACT is commonly used in Europe and in the automotive industry. HIPAA (Health Insurance Portability and Accountability Act) is designed for the healthcare industry. The translator you select should support all standards.

Can't I just use e-mail?

EDI is transmitted in a structured format, based on the use of message standards, which ensures that all participants use a common language.

For instance, if you were to receive a PO via EDI, the EDI software would take the data and put it into a "readable format" then import it in your existing software. The result? No manual data entry! In addition, the process can be programmed to take place without human intervention.

What are the benefits of EDI?

• Reduced postage costs
• Reduced expenses
• Speed. Because information is moved faster and with greater accuracy, time spent communicating with suppliers is decreased.
• Elimination of paper documents.
• Elimination of labor intensive tasks, such as data entry.
• Greater accuracy of information.

Setting up EDI

Although electronic mail is faster than standard mail and eliminates paper, it differs greatly from EDI because the data is in an unstructured format. If you were to get a purchase order as an e-mail, you would likely print out the document and enter the data into another program, such as an accounting or inventory package.

• Determining the most appropriate solution.

  Once the need is established, you have to determine what type of solution best suits your business. If you are exchanging only a few documents per week or month, you may find it more economical to use a service-based solution. If you anticipate exchanging a lot of documents with several trading partners, an in-house translator is likely to be more efficient.

  Before you can determine which is the better approach, you need to project:

  • With how many companies do you anticipate exchanging EDI?
  • What type of transactions do those companies require? EDI transactions are usually given a number. A list of the more common translation sets may be found here.
  • How often do you expect to hear from these companies? Throughout the day? Weekly? Quarterly?
  • In dealing with your trading partner(s), are you sending your transactions to a specific location or individual facilities?
  • Are you being asked to supply UCC-128 labels?

  Answers to these questions will enable you to select the most effective solution.

• Getting the implementation guide

  Whether you use a service based solution or in-house software, you will need to format the data to your trading partner's specifications. The formatting process, called mapping, is usually a part of the technical support service offered by your software provider, and the guidelines for mapping are in your trading partner's implementation guide.

  Often the implementation guide contains a trading partner questionnaire, which needs to be filled out and returned as soon as possible. This is the first step in establishing a trading partner relationship.

  Please note that even though all of your trading partners may be using X12 standards, EDI guidelines are not universal. The map created for Company A's invoice cannot be copied and used for Company B, as Company B likely has its own criteria. As a result, you will need an implementation guide for every trading partner.

• Setting up communications

  One of the most important aspects of EDI is selecting how the data is going to get from one place to the other, such as through a VAN or using a direct communication. In the majority of the cases the trading partner will designate the method.

  VAN (Value Added Network)

  Often referred to as the "electronic post office", a VAN is a third party service that transmits and stores data in the "electronic mailbox" until it is picked up by the appropriate party. Since the EDI message contains addressing information, the van routes the message to the mailbox of the recipient. Until recently, it was considered the most secure method of transferring data.

  Direct Connection

  Unlike the VAN, a direct connection allows you to pass the data straight to the receiving party.

  Types of direct connection include VPN (Virtual Private Network), FTP (File Transfer Protocol), and EDIINT (EDI over the Internet). Usually EDIINT is done in conjunction with AS2 software, which encrypts the data before sending it over the Internet.

• Installing the software

  There are two parts to EDI: the translator and the mapper. Installing each part is simple and takes seconds. However, each piece of software must be customized to fit your specific needs.

  Translator

  The translator is the engine behind the EDI process and governs the day-to-day activity. It has several components, including the engine itself, the EDI maps, the standards, and communications ability.

  Mapping tool

  Data is formatted using the mapper, a software tool that enables one to properly organize the data so that it follows both the EDI and the trading partner's standards. Maps contain the rules of the transaction; these rules will be enacted by the translator itself. Mapping also includes integration with an existing application. The EDI translator can be programmed to go into an application, extract information, and send it out as an EDI file. It can also import incoming data, thus eliminating the need for data entry. As said earlier, the mapping design is often done as part of the EDI supplier's technical support service.

• Final steps in the set-up process

  The trading partner will send sample data, which is then mapped following the guidelines. The completed map is tested by sending sample data (which is now formatted) back to the trading partner. If it fails, the mapping error must be found and corrected. Upon successful testing the EDI partnership is ready to go live.

How does EDI work?

For a better understanding and a practical example of How EDI works - Let's presume that a buyer is sending a purchase order to the supplier.

• Most likely the information contained in the purchase order resides in a computer application (for example, an inventory package) on the buyer's PC. As long as it is possible to import and export files from the application, pertinent information can be extracted and mapped into a file for the EDI translation software.
• The EDI translator will do compliance checking to ensure that the mapping complies with EDI standards and the trading partner's implementation guide. Afterward, it will translate the message into an EDI format.
• A communications connection is established in order to transmit the EDI purchase order. The EDI translation software controls the communications software.
• The file is sent to either a mailbox, FTP site, or directly to AS2 recipients to be picked up.
• The computer software receiving the EDI purchase order will reformat the incoming data so that it can be readily imported into an existing application's data files. For instance, a PO received via EDI could be input into the Order Entry module.
• When the order is received, the software generates a Functional Acknowledgement back to the buyer. The FA indicates that the message was received and was/was not compliant with the EDI standard. It does not address the actual data in the message.

Common Transaction Sets

• TSet: 880 - Grocery Products Invoice

  This X12 Transaction Set contains the format and establishes the data contents of the Grocery Products Invoice Transaction Set (880) for use within th..

• This X12 Transaction Set contains the format and establishes the data contents of the Grocery Products Invoice Transaction Set (880) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set can be used to provide for customary and established grocery industry practice relative to billing details for finished goods in a retail or wholesale consumer market. The transaction set can be used by the supplier or broker organization to request payment from a retailer or wholesaler organization. This transaction set is to be used for standalone detail billing and cannot be used for statement billing or credit/debit adjustments.

• TSet: 875 - Grocery Products Purchase Order

  This X12 Transaction Set contains the format establishes the data contents of the Grocery Products Purchase Order Transaction Set (875) for use within...

• This X12 Transaction Set contains the format establishes the data contents of the Grocery Products Purchase Order Transaction Set (875) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set can be used to provide for customary and established grocery industry practice relative to the placement of purchase orders for finished goods in a retail or wholesale consumer market. This standard can be used by a retailer or wholesaler organization to request delivery of finished goods from a broker or supplier organization. This transaction set should not be used to convey purchase order changes or purchase order acknowledgment information.

• TSet: 856 - Ship Notice/Manifest

  This X12 Transaction Set contains the format and establishes the data contents of the Ship Notice/Manifest Transaction Set (856) for use within the co...

• This X12 Transaction Set contains the format and establishes the data contents of the Ship Notice/Manifest Transaction Set (856) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to list the contents of a shipment of goods as well as additional information relating to the shipment, such as order information, product description, physical characteristics, type of packaging, marking, carrier information, and configuration of goods within the transportation equipment. The transaction set enables the sender to describe the contents and configuration of a shipment in various levels of detail and provides an ordered flexibility to convey information. The sender of this transaction is the organization responsible for detailing and communicating the contents of a shipment, or shipments, to one or more receivers of the transaction set. The receiver of this transaction set can be any organization having an interest in the contents of a shipment or information about the contents of a shipment.

• TSet: 855 - Purchase Order Acknowledgment

  This X12 Transaction Set contains the format and establishes the data contents of the Purchase Order Acknowledgment Transaction Set (855) for use with...

• This X12 Transaction Set contains the format and establishes the data contents of the Purchase Order Acknowledgment Transaction Set (855) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to provide for customary and established business and industry practice relative to a seller's acknowledgment of a buyer's purchase order. This transaction set can also be used as notification of a vendor generated order. This usage advises a buyer that a vendor has or will ship merchandise as prearranged in their partnership.

• TSet: 850 - Purchase Order

  This X12 Transaction Set contains the format and establishes the data contents of the Purchase Order Transaction Set (850) for use within the context ...

• This X12 Transaction Set contains the format and establishes the data contents of the Purchase Order Transaction Set (850) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to provide for customary and established business and industry practice relative to the placement of purchase orders for goods and services. This transaction set should not be used to convey purchase order changes or purchase order acknowledgment information.

• TSet: 820 - Payment Order/Remittance Advice

  This X12 Transaction Set contains the format and establishes the data contents of the Payment Order/Remittance Advice Transaction Set (820) for use wi...

• This X12 Transaction Set contains the format and establishes the data contents of the Payment Order/Remittance Advice Transaction Set (820) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to make a payment, send a remittance advice, or make a payment and send a remittance advice. This transaction set can be an order to a financial institution to make a payment to a payee. It can also be a remittance advice identifying the detail needed to perform cash application to the payee's accounts receivable system. The remittance advice can go directly from payer to payee, through a financial institution, or through a third party agent.

• TSet: 812 - Credit/Debit Adjustment

  This X12 Transaction Set contains the format and establishes the data contents of the Credit/Debit Adjustment Transaction Set (812) for use within the...

• This X12 Transaction Set contains the format and establishes the data contents of the Credit/Debit Adjustment Transaction Set (812) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to notify a trading partner of an adjustment or billback and may be used to request an adjustment or billback. It identifies and contains the details and amounts covering exceptions, adjustments, credits, or debits for goods or services. This transaction set is multidirectional between trading partners.

• TSet: 811 - Consolidated Service Invoice/Statement

  This X12 Transaction Set contains the format and establishes the data contents of the Consolidated Service Invoice/Statement Transaction Set (811) for...

• This X12 Transaction Set contains the format and establishes the data contents of the Consolidated Service Invoice/Statement Transaction Set (811) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set provides for the billing or reporting of complex and structured service invoice/statement detail. This standard can be used by organizations who are interested in sending or receiving either consolidated or standalone invoices for service arrangements which require processing other than that done for the typical product invoice. The Consolidated Service Invoice/Statement can be used as a credit/debit memo to differentiate between payable invoice items and information-only memo items. This transaction set should not be used as a standalone notification of a credit/debit adjustment.

• TSet: 810 - Invoice

  This X12 Transaction Set contains the format and establishes the data contents of the Invoice Transaction Set (810) for use within the context of an E...

• This X12 Transaction Set contains the format and establishes the data contents of the Invoice Transaction Set (810) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to provide for customary and established business and industry practice relative to the billing for goods and services provided.

• TSet: 754 - Routing Instructions

  This X12 Transaction Set contains the format and establishes the data contents of the Routing Instructions Transaction Set (754) for use within the co...

• This X12 Transaction Set contains the format and establishes the data contents of the Routing Instructions Transaction Set (754) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set is used to communicate routing instructions to a supplier for a specific shipment. It can be used also to respond to a Request for Routing Instructions Transaction Set (753).

• TSet: 753 - Request for Routing Instructions

  This X12 Transaction Set contains the format and establishes the data contents of the Request for Routing Instructions Transaction Set (753) for use w...

• This X12 Transaction Set contains the format and establishes the data contents of the Request for Routing Instructions Transaction Set (753) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set can be used to request routing instructions and provide general information about merchandise that is ready to be shipped.

• TSet: 214 - Transportation Carrier Shipment Status Message

  This X12 Transaction Set contains the format and establishes the data contents of the Transportation Carrier Shipment Status Message Transaction Set (...

• This X12 Transaction Set contains the format and establishes the data contents of the Transportation Carrier Shipment Status Message Transaction Set (214) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set can be used by a transportation carrier to provide shippers, consignees, and their agents with the status of shipments in terms of dates, times, locations, route, identifying numbers, and conveyance.

• TSet: 210 - Motor Carrier Freight Details and Invoice

  This X12 Transaction Set contains the format and establishes the data contents of the Motor Carrier Freight Details and Invoice Transaction Set (210) ...

• This X12 Transaction Set contains the format and establishes the data contents of the Motor Carrier Freight Details and Invoice Transaction Set (210) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to provide detail information for charges for services rendered by a motor carrier. It is used both as a motor carrier invoice to request payment or as details pertaining to motor freight shipment(s) charges.

• TSet: 204 - Motor Carrier Load Tender

  This X12 Transaction Set contains the format and establishes the data contents of the Motor Carrier Load Tender Transaction Set (204) for use within t...

• This X12 Transaction Set contains the format and establishes the data contents of the Motor Carrier Load Tender Transaction Set (204) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set can be used to allow shippers or other interested parties to offer (tender) a shipment to a full load (truckload) motor carrier including detailed scheduling, equipment requirements, commodities, and shipping instructions pertinent to a load tender. It is not to be used to provide a motor carrier with data relative to a Less-than-Truckload bill of lading, pickup notification, or manifest.

• TSet: 131 - Student Educational Record (Transcript) Acknowledgment

  This X12 Transaction Set contains the format and establishes the data contents of the Student Educational Record (Transcript) Acknowledgment Transacti...

• This X12 Transaction Set contains the format and establishes the data contents of the Student Educational Record (Transcript) Acknowledgment Transaction Set (131) for use within the context of an Electronic Data Interchange (EDI) environment. The Student Educational Record (Transcript) Acknowledgment record is used to ensure that the original transcript did, in fact, come from the proper office at the educational institution indicated as the sender and that certain key elements of the transcript were received as they were sent. It also provides the sending institution with confirmation that the original record was received by the intended recipient and the date it was received. This information may then be relayed to the student or other individual who requested the record transfer.

• TSet: 130 - Student Educational Record (Transcript)

  This X12 Transaction Set contains the format and establishes the data contents of a Student Educational Record (Transcript) Transaction Set (130) for ...

• This X12 Transaction Set contains the format and establishes the data contents of a Student Educational Record (Transcript) Transaction Set (130) for use within the context of an Electronic Data Interchange (EDI) environment. The student transcript is used by schools and school districts and by post-secondary educational institutions to transmit current and historical records of educational accomplishments and other significant information for students enrolled at the sending schools and institutions. The transcript may be sent to other educational institutions, to other agencies, or to prospective or current employers. When a student transfers from one educational institution to another, it is essential that the student's prior educational record be made available to the institution to which the student wishes to transfer. For students in Pre-Kindergarten through Grade 12, prompt records transfer will assist receiving schools in making an appropriate initial educational placement of student. It is important that this information be available on a timely basis. In some cases for post-secondary students, it is this record which determines whether the student will be accepted at the receiving institution. In all cases, it is important to know what course work the student has already completed so that the student may be properly placed in courses and educational programs at the next institution. When a student seeks employment or wishes to inform another agency of the student's academic accomplishments, the student transcript may be sent to a prospective employer, branch of the military, or another government agency. The student transcript contains personal history and identifying information about the student, the current academic status, dates of attendance, courses completed with grades earned, degrees and diplomas awarded, health information (Pre-Kindergarten through Grade 12 only), and testing information.

EDI benefits

EDI Benefits

Within various industries, EDI has been used to great advantages, and many benefits have been expounded in its regard. EDI´s benefits relate to environmental impact, improved time efficiency, improved accuracy and increased flexibility, enhanced partnership, labor costs, shipping. EDI creates a system whereby documents and data can easily be transported from one source to another, and is able to overcome incompatibility issues.

EDI is a set of standards which govern data formats and thereby allows disparate computer systems to be able to “read” the data which is sent. EDI documents are also able to be stored at a Value Added Network (VAN), which is like a virtual storage house, and is able to transmit the message to the receiver when they are available. The advantage of a VAN is that they are able to re-transmit the message to the receiver if it does not go through. The EDI provides advantages to both small and large businesses and creates an efficient business environment with little to no human intervention, which makes it perfect for automated services. Therefore EDI is used highly within departments such as invoicing and ordering.

The Improvements

EDI will reduce and improve various elements of any business or corporations expenditures. It allows some processes to become fully automated, thus reducing the amount of human time required on them. It can fully take over in data entry, manual reviews and reconciliations, sorting, copying and filing documents. However, importantly, the number of errors is heavily reduced due to the minimization of human input. Therefore the number of hours required for a person to process an order from bid request to invoicing is greatly reduced. In this way, labor costs are reduced, and time efficiency improved. Transactions are faster, more efficient and accurate.

EDI enables the processing of business data up to the last second of deadlines as it is an automated electronic transmission. As EDI compliance is somewhat of a must in this business climate, once the business is in line, it will reap benefits from this efficient system. Businesses will be able to promote mutual profitability by employing EDI, and thus create enhanced partnership situations. EDI allows for a reduction in deductions and credits for mistakes; an improvement in the number of quality purchase orders; hours saved in paper administration; increased speed to retail of new items; major improvements in retail scanning accuracy.

Due to this increased efficiency of non-paper accounts, cash flow will improve as electric fund transmission is able to begin much earlier than previously. Shipping is also improved as EDI provides quick and efficient information as it relies on barcode information to communicate. It is able to track inventory and eliminates the incidence of lost packages due to their isolation from the larger shipping order. EDI greatly improves accuracy of data as it is all automated. There is a reduction of re-keying errors, as there are none required. Therefore fewer items will be lost, returned or required from back order. EDI simplifies the manufacturing process as it is able to provide one time data entry; reduced errors; on line data storage; faster management reporting and automatic reconciliation.

Industry Applications of EDI

The benefits of EDI can be seen across various industries which have embraced the data interchange system. It is widely used within the health industry, government agencies, and the automotive industry and general businesses. It is used widely is automated document services which can include: export/import information for international shipments carrier-to-carrier way bill exchange; reservation or pickup requires; shipment information from shipper to carrier; freight bill data, carrier to payer; shipment tracing information; payment data, payer to bank, bank to bank, bank to payee. All of these various industries which utilize EDI have standards of their own, but these can be minimized when using the standardized EDI document formatting.

EDI provides a varied number of documents which are standardized across industries. Within these industries, there are benefits to the buyer such as lower inventory levels, quick order acknowledgment and efficient invoicing processing. The benefits for the supplier have been previously listed. Within the automotive industry, EDI helped to improve inventory costs, as they were able to apply EDI in order to establish the single day inventory lists. While this helped the buyer, it put pressure on the supplier to absorb the costs. Although the industry was improved, it led to some confusion, as each major automotive maker used its own standards. However, these were made clear through the Automotive Industry Action Group which worked with automakers and suppliers to develop an EDI standard for the entire industry.

As such, the industry was able to create a standard which was related just to the automotive industry. Government entities are also benefiting from EDI – such as the Minnesota Department of Labor and Industry, which utilizes EDI in its injury claim reports. They claim that EDI increases the level of reportage of injuries, and improves on reporting times. They are also able to automatically send out report maintenance documents, reducing the level of human interference, and thereby reducing labor costs. The medical health industry also utilizes EDI in order to process claims more swiftly for medical providers. Within the health industry, the benefits include those of time effectiveness and reduced paper load.

However, it also allows consumers – from insurance company, hospital, physician or supplier to enjoy these benefits. Current EDI standards are able to support all the support for health care industry standard documentation. This includes government regulations which provide for the privacy and security of electronic transactions. EDI is able to comply with the standards, as it is completely secure. EDI is also able to integrate with other systems such as the clinical and accounting systems of hospitals and private clinics. The financial sector is also well entrenched with EDI as it is used to establish credit checks, statement orders, lockbox data and debit advices.

Internet EDI Benefits

Although EDI can be run over a variety of electronic communication systems, currently many industries are looking at internet EDI, due to its ability to reduce costs. Using other forms of electronic mediums, companies may be required to use VANs which store the electronic information until the receiving partner is ready to accept. When this is eliminated, it could reduce the cost to companies considerably. Therefore internet EDI is being explored by many. It allows the partnering businesses to use secured lines of communication to transmit information.

Internet EDI provides the benefits of EDI in that is almost instantaneous transmission, and therefore will cut down on time which would normally be eaten up by postal delays. It is currently used by the automotive, health and the financial sector. These businesses are able to further reduce their transmission costs through the use of internet EDI. By utilizing the Internet, EDI is able to access an increased variety of businesses that may not be able to afford the setup of other media transmissions. It can allow for reduced costs through the process of either request or delivery or of error produced through rekeying. Overall, Internet benefits are open to all businesses that require EDI services.

Looking Ahead

By the end of the 1990´s many industries were being impacted by the use of EDI in everyday practices. Currently, the EDI is no longer a trend but an integral part of many businesses and their management. While EDI has existed since the 1960´s it has kept up to date and can now provide electronic transmissions in various electronic means such as modem, HTTP and the internet. With these options available, and with many industries on board, the future of EDI looks strong.

However, there may be some traps EDI could fall into. Software must be accessible and easy to use. Users should be aware of the varied options EDI can provide for businesses. Proponents of EDI should be clear in their advertising, and explain the system thoroughly and clearly. Currently EDI is being connected with other systems such as XML, which can only be of benefit. These systems together create an efficient and fast delivery of data transmission.

There are a varied amount of services which offer companies and businesses the opportunity to increase their profit margins as well as their ability to contact trade partners more efficiently. They are able to extend the use of EDI through the many modes of transmission is can go through. Also EDI is able to evolve with new systems and therefore supply an up to date system that is well established within many businesses and company systems. It is this kind of flexibility which will allow EDI to continue into the future as it has since its inception.

How EDI work with XML

How EDI work with XML

EDI and XML systems have been seen as the opportunity to create a holistic approach to data information exchange that can deliver and process simple, durable and effective business transactions by electronic means. To achieve this, methods must be employed that are not only of value within the market today, but have an extension into the future. To guarantee the technology will be widely accepted and used, it must be made freely available as an open standard. In this way, the systems can work in conjunction to create a truly effective solution to business data exchange.

Using XML/EDI is far more than enveloping EDI with XML. These two powerful technologies work conjointly to provide a system of data information exchange that is interoperable and can give a range of presentation options, as well as improve the efficiency of the exchange. XML provides for a file format for data representation, whereas EDI creates standard messages formats enabling the data to be sent via any electronic messaging service. Therefore, by combining the two technologies, a more powerful data exchange too is created which will improve the services and styles of businesses and corporations.

How XML/EDI works

XML/EDI is the combination of five technologies: XML, EDI, templates, agents and repository.

XML (eXtensible Markup Language) comes out of the history of the Web based language known as HTML. However, HTML was just a subset of the original and highly complex SGML document syntax. Now, XML mitigates the two, as it is not as highly complex as the SGML, but is holds greater capabilities than the HTML. XML tokens and frameworks are the structure that moves the other components throughout the network. XML tokens substitute or complement existing EDI segment identifiers. XML also comes with the generally enriched components of the Web and the Internet.

EDI provides a way to send data in a simple format, and allows the receiver to interpret the information they have just received. XML/EDI is compatible with all previous EDI transactions, but also provides progression to the new wave of data transaction. Therefore, it is mot merely discarding old systems, but incorporating them into new ones. Templates provide rules that maintain the cohesiveness of the entire system. Templates are parallel to XML as a special section and set of tokens, and can be easily read and interpreted – they appear more as a spread sheet. They are supplemented by DTDs or Document Type Definitions, which allow the documents to be run in other operating systems. The templates enable processing of the transactions.

To interpret these templates, Agents are required. Agents not only interpret, but also interact in order to provide the best template for each task. They interact not only with the user, but also the transaction. The agents will research which template is best for each task. They can also reference DTDs for presentation of the information. Repository is a store of information which is a Shared Internet Dictionary that allows user to manually look up meaning and definition of EDI elements. The more advanced level provides automatic lookup for the user. It sets up the software the Agents require to cross reference unknown entities. It is an important component of the entire framework, as it provides the semantic grounding for business transactions.

Why XML/EDI works

The combined system of XML/EDI allows for a variety of interaction models to occur such as the following:

Star Model
Hybrid Model
Ad-hoc Model
Web Model

These models demonstrate the different styles of information interchange available to the various systems in operation. The Star model is an organization which would be considered the oldest style of current data exchange. It is where a major business sets the standards for the younger or smaller partners. The ad hoc model is the new net based model, whereby smaller trading partners set up their own interactions which are malleable over time, and may or may not become formal methods. The hybrid model combines these first two. The Web model is one where the content is the most information being received. It can either be ordained by pre-set rules, or can come from a request for information. These frameworks are in place in order to provide a variety of solutions to the issues of creating more flexible E-business systems. These models also require an overall framework of interlinked systems which allow for the ready and easy reading of documents.

This model is not an all or nothing model. Where certain elements are required they should be used. But by new means is it intended to set up a definite framework by which a company or business should set up their E-Commerce or business trading. All of the layers can be used independently and simply provide increasing layers of sophistication both within the document and its presentation. In simplest terms, the framework can be used to validate the message, or check that they are well formed XML. However, it can also be set up for the documents to be linked to the rule-templates, and have inbuilt rules for processing the data you received. It is up to the user to decide how to make the framework function.

Why XML/EDI is different

Mainly the difference between XML/EDI and other systems is that the information is able to be decoded from one operating system to another much more easily and with a greater style within the presentation of the product. However, the system can also be used at its most basic level when that is required. XML/EDI transactions are self describing through the use of XML tags and DTDs. This means that other applications processing XML/EDI documents are able to understand the content through access to just the content of the transaction.

There are various reasons why XML/EDI is important in the new direction of technology. It is founded on open standards, and provides for self-describing transactions. This gives greater access to a variety of systems wishing to access just the content of the document.

XML/EDI allows for those using the tool to expand upon existing products and create new and malleable systems of data exchange. The XML/EDI system interfaces with legacy systems well; it also uses a framework of evolving best practice by incorporating shared dictionaries, which allow for a greater access to templates and their best use. The XML/EDI framework allows for object-based documents – and creates a system whereby data and rules are in parallel.

It provides the way to follow a move down to a document-centric environment. Components within the model allow for a more flexible business model which is cheaper and easier to implement, thereby allowing greater access to more trading partners. However, most importantly, it creates interactivity between transactions enabled by the web rather than having one off transactions. XML/EDI is not simply two technologies thrown together; it is the use of complementing technologies in combination to create a new and advanced style and form of data exchange.

The combination of EDI and XML to create a new vision of XML/EDI allows for a more efficient and modern approach to data exchange within an environment of changing technologies. It presents a new wave of data exchange that can be utilized at various levels of complexity by simple businesses to large corporations. It works upon a framework of interconnected, but not intrinsic levels which can be manipulated for the specific use of each data exchange. At its simplest form, the content of the exchanged data piece can be read and analyzed; however when required, the data can be presented within the current possibilities of technology due to the abilities of the XML tool. As such, XML/EDI allows for a great range of applications within the range of data exchange.

The data can be transported using any electronic messaging device such as modem, floppy, LAN, WAN, Internet and so on. It is the combination of these tools which allows different types of data to be efficiently exchanged while also having an interaction between the data and the user and the system – through the use of Agents and Repository. Hence a document can be manipulated by initially implementing the EDI dictionaries and extending the vocabulary through on-line repositories to include business language, rules and objects.

Thus a brand new way of analyzing received messages is created, which is greater than the sum of the parts. These can be combined in various practices of business whether it be between smaller and large trading partners, or between sole traders, this combination of technologies improves data exchange, and brings it in line with current business language and presentation of ideas.

EDI in industries

EDI in Industries

Health Care EDI

There are various industries that EDI has a firm hold within, and the health care industry is one of those. Within the delivery of health services there is a great amount of paperwork which must be filed, delivered, ordered, compiled and documented. To alleviate the pressure of this paper pile, EDI has been incorporated into the system so as to provide a technological replacement for some of this domination. The standard for the health care industry is HL7, which is also the umbrella organization which oversees the development of standards and their evolution.

It is not only an organization within the United States - there are many other countries involved in HL7 projects throughout the world. They are intended to utilize the standards of the HL7 to organize and develop information exchange using these standards. Currently, HL7 tends to use XML technology in order to exchange documents. However, EDI is also well established within many data transmission industries, and it has been used throughout the health service industry.

It also appears that EDI is enabling manufacturers to meet the record-keeping requirements specified by government acts. The HL7 has long since its inception moved well beyond its initial messaging protocols. Currently it works on various areas of standards improvements. It aims to standardize knowledge representation, which is for the specification of components for context management. Health care data interchange is supported by the use of Health Information Exchange.

XML document standards are being standardized. These advancements are allowing a patient’s record at any point to be represented as an HL7 document. The medical record of a patient, in fact is even able to follow them not just through but between different hospital systems and even to different hospitals. The HL7 has become a foundation standard for universal electronic medical recording. It is used world wide.

Financial Sector

Due to its highly secure nature and speed of transmission, the finance industry also depends on EDI for its data transfers. Similar to non-financial EDI, financial EDI (FEDI) involves data interchange, but it involves payments and movements of money, which involves a financial institution. The partners of the transaction must have a good relationship with their finance institution to make FEDI effective. A growing number of companies are adopting FEDI in the U.S. The flow of FEDI is that the first partner - or sender - in the transaction extracts information electronically from the accounts system. The data is then formatted into a standard EDI. This form is then transmitted electronically to the bank for processing.

The financial institution then puts the data into a format that can be sent to the Clearinghouse. The payment data is transmitted to the second partner- or receivers - bank. The sender’s account is credited, and a receipt sent to them also for automatic accounting purposes. All of this is done electronically. Financial enterprises use these communication systems to transfer funds from their house bank and to receive statements.

Outbound messages such as payment orders and direct debits are carried out using EDI. Also inbound messages such as debit advices, credit advices, bank statements and lockbox data is transferred by EDI. Bank Communication Systems perform the following tasks related to EDI processing: conversion of data from IDoc to EDI and the opposite; message and interchange handling; communication; administration of partner profiles; and monitoring of processing.

Some of the perceived benefits of FEDI are that the purchasing partner enjoys an increase in productivity, a decrease in expenditure due to the electronic nature of the transaction as opposed to paper, a lower likelihood of fraud, and electronic invoicing capability. The seller benefits because it can receive products that are ostensibly younger, decrease the cost of processing due to automation of posting, reduce error incidence thereby increasing quality, and establish regular incoming monies. Hence the trading partners are able to improve each one‘s business without depreciating the others. In this way they improve their relationship with and importance to each other.

Many businesses are adopting EDI to make payments. It allows them to outsource their payments processing, resulting in a single file for all the payment instructions being sent to the bank in an EDI format. The bank can then execute all payment orders, including ACH and wire transfers, and will also print and mail the payable checks. This reduces paper enormously, and heavily decreases errors. All the payments can be dealt with electronically. Conversely, those companies collecting said payments are also able to utilize EDI by having their bank receive the payments, and then send them electronically to the companies’ accounts receivable system for automatic cash application. Again, companies are streamlining and reducing paper wastage.

The Automotive Sector

Since the late 1960’s the automotive sector in the United States was utilizing EDI as a means for communicating with suppliers, and for communication within their own plants. The car industry fell into confusion when General Motors tried to lower costs through holding onto an inventory which could only be one day’s worth of supplies. Because of this, the inventory costs were greatly lowered. This was done via EDI, and it allowed them to set their own system of communication with their suppliers. This strategy was soon being used by other automotive companies to lower their costs in a similar manner.

This led to the need for a documentation standard throughout the industry. This was made clear via the Automotive Industry Action Group, which combined with automakers and their suppliers for the development of an EDI standard which could be used by the entire industry. With this system, the industry would be able to construct a standard which is specifically related to the automobile industry. Now, however, it is being used to streamline operations, reduce daily running costs, and implement complementary systems that allow the industry to work at an optimal rate. As with any industry, time is money, so when is reduced, ostensibly the other is increased.

By implementing EDI in a more wide reaching scope, the automotive industry is improving its bottom line. The following benefits were noted when a supply chain introduced EDI into their business system: shorter lead times; more inventory turns; reduced cost of data entry; fewer data entry errors; better scheduling; faster release processing; and increased productivity. The industry has been able to rework its business structure, and incorporate EDI into various new applications such as JIT or Just in Time, which is an inventory system which is designed to ensure inventory is delivered just when it is required.

This guarantees a reduction in inventory costs, and redundancy in inventory. It requires great co-operation between supplier and customer and an efficient communications system - which is where EDI comes in. Companies use EDI to order their requirements, and have them shipped in a timely manner.

Transport Sector

The transport sector was one of the first industries to adopt EDI services, whether by sea, air, road or rail. In 1968 the Transport Data Coordination Committee and the National Association of Credit Manager’s Credit Research Foundation began developing standards for electronic data interchange. In 1979, the American National Standards Institute charted the Accredited Standards Committee (ASC) X12 to develop uniform EDI standards.

Throughout the 1980’s, five standards were published, and they were gaining acceptance in North America. Europe was continuing to work using other standards. This was causing difficulty in international trade, as the lines of communication were becoming confusing. As such the creation of an international standard was required - and the United Nations EDI for Administration, Commerce and Transport (UN/EDIFACT) was born.

These established standards that were flexible enough to meet the needs of all parties, and also included three additional regions, of Australia/New Zealand, Asia and Africa. This enabled international shipping and transporting of goods to be much more seamless. Instead of each part of the transporting system such as ship, a then truck and then receiver all getting pieces of paper stating the delivery order and what was contained, each part of the process will receive exactly the same data electronically. EDI within the shipping industry allows for improved communications and more accurate descriptions of deliveries, on and off loading, and a saving in time and personnel.

It also allows for a more interactive experience for customers - as for the rail systems in Australia, where document exchange occurs between everyday customers and the system. The EDI system allows for swift and efficient flow of information to occur between the components of the shipping process.

The introduction of EDI has greatly improved the quality and efficiency of the shipping industry, whether it is between supplier and customer, or the elements of shipping. The improved communication also decreases the amount of paper and incidence of error, which is a common bonus of EDI usage.

E-Commerce and EDI

E-Commerce and EDI

What is E-Commerce?

E-Commerce can be viewed as being a virtual market place, whereby all transaction that is carried out in the physical world is also available via the Internet. It involves mainly distribution, buying, selling, marketing and servicing of products or services through the use of electronic means such as the Internet, and other computer networks. E-Commerce involves not just businesses, but individual consumers and corporations. It generally utilizes the World Wide Web at some point in the transaction’s progress, but then also simpler computer tools such as databases and email.

Currently, it is foreseen that e-Commerce will continue to grow due to the increased familiarity of users with electronic business and commerce possibilities. The development of e-commerce over the last thirty years means that it has moved from meaning of EDI and EFT, which were introduced successfully in the late 60’s and early 70’s.

During the 1980’s, this expanded to the growth and acceptance of credit cards, automated teller machines and telephone banking. From the 1990’s onward, it includes ERP (enterprise resource planning), data mining and data warehousing. Currently it is becoming a wider description, due to the increased presence of web based activities. Basically it is coming more to mean web commerce, in that individuals and enterprises are tending to purchase goods and services over the World Wide Web. This generally occurs with secure connections that provide encryptions and special server protocols. Customers are able to use virtual shopping carts, and pay through electronic means, using credit card authorizations.

The last ten years has seen meteoric growth of electronic transfers and business possibilities. However, this was initially stunted at the beginning of general Internet use in the mid 90’s due to poor security systems. Thus it was not always a wise choice to purchase over the Net at that time. Many industries today are dependent on their electronic frameworks, and so support systems such as backend systems, applications and middleware have also developed. Some of these include broadband and fiber-optic networks, supply-chain management software, customer relationship management software, inventory control systems and financial accounting software. Currently, e-commerce is entranced in so many parts of life, from the ability to order groceries over the Internet to purchasing plane tickets around the world.

E-Commerce and EDI

Although it appears these two systems may not be able to play together, the opposite is true. In this current climate of utilizing all the technologies available to make businesses more accessible and more user friendly, EDI can combine with e-commerce to do just that. While EDI is well entrenched as a major framework in many larger businesses, it is also being adopted by smaller businesses to increase their ability to make trading partners. EDI provides a fast and efficient way to exchange information. Currently, there are standards known as AS2 which govern Internet EDI transactions. The use of EDI through Internet modes is becoming more popular, as it does not require the same amount of set-up, costs or applications as for bigger corporate enterprises.

The advantages of implementing EDI within the Internet environment, is that trading partners can be more efficiently and effectively communicated with, it reduces the amount of errors, and therefore improves cost effectiveness. It allows businesses to trade with larger enterprises that require EDI as a communication medium. Plus Internet EDI is relatively inexpensive, and does not carry with it the ongoing costs of other forms of EDI transmission. This can enable big and small companies to save potentially millions of dollars. Instead of mailing out catalogues and brochures, companies can send emails, and advise clients of discounts, and allow them to download information from the Internet.

This is made possible by EDI, which also allows retailers and distributors to have speedily and reliable communications. Retailers can easily determine product availability of a distributor prior to placing an order. If the distributor is out of stock temporarily, the order can be passed directly to the manufacturer, with the distributor receiving credit for the sale. When products are drop-shipped to retailers and distributors, an automatic requires for their stocking requirements can be generated. Orders are encrypted for Internet transmission and then converted to EDI format for internal processing. Thus EDI has become and integral part of business which has evolved from transactions between businesses, to those between individuals and businesses. It enables a certain level of interactivity, which creates closer relationships between all parties involved.

What is B2B?

B2B is an acronym for a business practice that has been in place for some time called Business-to-Business. B2B transactions are generally between companies, whereas transactions targeting individuals are called currently called B2C. Many organizations may have both components of this system in their corporate schemata; however, it is not unusual for a company to specialize in B2B services or sales. Usually the transactions will occur between mass producers and mass buyers of products within a category. Often, buyers will be cold called by a producer trying to generate more productivity and sales.

Generally, the vast majority of products and services could be seen as B2B transactions. This application provides community management, profile management, and sophisticated security management. It is seen as a marketing strategy which attempts to increase profitability by promoting their products and services to other businesses. B2B marketing communications is to back up the sales effort. This effort can include advertising, public relations, direct mail, trade show support, sales collateral, branding, and interactive services such as Web design and search engine optimization.

The marketing involves various steps of creating a presentation of the company which can be then thrust toward potential trading partner companies. First a positioning statement must be produced to outline what the company offers. Next, the message needs to be developed - this will be the main messages that will most strongly explain to potential customers what the company does, and how it will be beneficial. Then a campaign plan must be created to promote the company, with the best output return potential. Then find an agency and explain what the objectives, target market, target audience, product, campaign description, current product positioning, graphical considerations, corporate guidelines and whatever else is important to the company. Then as with any campaign, the concept must be analyzed to see if it fits with the goals of the company. Then results must be measured, and changes made if necessary.

EDI within B2B

EDI is popular within the scope of B2B, as it enables fast and efficient communication to occur. And that appears to be an essential element of B2B. This marketing and business platform requires that each business is able to contact potential and current customers with ease. The easy transmission of EDI creates a simple and direct form of access to trading partners. When the Internet became more advanced within the business framework, many speculated that EDI would not survive. However, it has evolved to work within the Internet framework, and become further established as a corner stone to business practice. As such, with B2B’s strongly marketing driven approach, EDI cannot be out of the picture.

Many business corporations employ EDI whether in entrenched systems utilizing backend systems, or for smaller users that are able to utilize Internet EDI. The coming of new technology only makes EDI stronger and more flexible. And as such, new businesses must if they wish to participate in many and strong business relationships, employ EDI as a resource rather than as a burden. It can increase inventory turns, decrease inventory, speed flow of information between businesses, improve product and sales forecasting, improve time-to-market, increase customer satisfaction, decrease shipping costs, reduce product returns, improve cash flow, integrate supply chain, and result in improved relationships with trading partners.

With these benefits, it can hardly be ignored. Currently the trend for Internet EDI compatibility is growing rapidly, due to the demand from larger companies for the use of Internet EDI software that adheres to AS2. It allows larger companies to reduce the cost of VANs, while maintaining flexibility of communication. Internet EDI allows smaller businesses that are unable to support traditional EDIs to communicate with larger enterprises.

As Internet EDI expands, and allows for more document types to be transmitted, it is perceivable that a great majority of EDI and non-EDI data will be exchanged through the Internet. And since B2B is a largely Internet based approach, EDI should be a major consideration for any business looking to increase their profitability and create trade relationships that can expand with the vision of the business.

EDI mapping and translations

EDI Mapping and Translation

Mapping is a movement of information - basically of putting the format of one data document onto another. For instance, it takes the format of an otherwise incompatible data format and makes it into an EDI compatible data document, or conversely, takes an EDI document and makes it readable. There are various tools on the market for doing such tasks, which are readily available through the Internet or at an EDI support centre.

These mapping tasks require software, as it is bringing in line a foreign piece of documentation with EDI standards. The following diagram intends to show how mapping services would be a middle man between companies that have the ability to use and read EDI and those that do not.

A mapping service allows EDI documents basically to be “copied” onto another differently formatted document such as EDI to spreadsheet - which goes from the electronically transmitted message form to one that may be read easily by a person without EDI knowledge.

The mapping services are mostly able to integrate directly with one or multiple systems within the organization such as ERP software, warehouse management system, CRM, or any other back end system or database. It can also be integrated via direct database connection, flat file or XML file.

Companies offer different input options and pathways of integration. Data is able to be translated to any data format, such as EDI, X12, EDIFACT, or various versions of XML. The communication options are also fairly flexible, as companies use different methods. Mapping can occur through Internet EDI, Web Forms, FTP’s, HTTP’s and traditional VANs.

EDI is used to exchange business information and documents in standard electronic formats using computers. Translation software helps in this exchange by converting data extracted from the application data base into a standard EDI format for transmission to one or more trading partners.

EDI- formatted data received from the same trading partners can be converted into a file format your application system recognizes. This data is then processed and written onto your database. It is important to understand the structure of the EDI translation process.

The EDI translation process depicts data transfer from the Company database to Flat file to EDI translator to EDI-formatted data through the transmission system to EDI-formatted data to the EDI translator to the Flat file to the Trading Partner’s data base. This software then allows for any document sent from a trading partner to be translated and read.

EDI Outsourcing

EDI for the layman can be a complicated and frustrating experience if having to implement and install the software required for EDI transmission. However, there are various companies which provide technical support for businesses and industries interested in EDI.

These systems can run with or without software, and come with a range of options to suit the organization. Outsourcing EDI support can alleviate a business of a technical which most likely would not require an on staff member. As such, EDI outsourcing provides the technical support without the payroll cost.

Outsourcing can help to bridge technology gaps for companies and businesses and give them a fresh look on how industries are operating in the new wave of complimentary and combined technologies. The four phases of the sourcing cycle: sourcing strategy; evaluation and selection; contract development; and sourcing management should be examined prior to selecting an outsourcing agency. These phases will help to secure an agency which is best suited to the business or corporation.

Outsourcing agencies can provide best practice evaluation, and manage existing outsourcing with reference to organizational models. Outsourcing agencies also provide data conversion systems and translations, which provide solutions to facilitating communication between multiple platforms with multiple file formats.

These conversion tools can facilitate both internal and external communication. Outsourcing agents can also provide strategic assessment and planning; architecture review; project management; recovery planning; gap analysis; product operations; new technology consulting; and education and training.

These services can allow a company to improve management and streamline a company’s output. In this increasingly internet based age, agencies should be able to also provide web based systems, which can improve communication with trading partners.

Outsourcing for EDI is used within the health sector, shipping and transport, manufacturing, and e-business. Outsourcing enables a company or business to delegate the responsibility of the EDI to an expert with intimate knowledge of the system. As it is an evolving system, with links to other transmission systems, EDI can be somewhat complex in its setup for the uninitiated.

Many outsourcing companies will also act as the VAN or Value-Added Network, which is similar to a storing house for data transmissions. These aid in keeping the data transmission system efficient, and do not rely on the sender to provide repeat transmissions when the receiver is unavailable. Outsourcing agents can also provide the email server for Internet EDI.

Software applications and those who are able to make them work are intrinsic to enabling EDI to become a major force within business life. It creates flexibility and a malleability which is essential to the day to day business process. Without these software applications, EDI would be as a lone boat in an ocean. It would not be connected to anything and therefore unable to communicate. These software applications are as ropes that attach EDI to other computers and the Internet, which enables the easy communication.

The mapping and translation applications allow all of the different standards to be sent and received, which is at the heart of EDI, in that the EDI documents are just one part of the whole process. These documents can stand alone, but require the mapping and translation applications to allow them to be understood. EDI is powerful in any business enterprise, which allows for efficient and concise information exchanges, and creates better networks between trading partners.

EDI and software applications

EDI and Software Applications

EDI and JAVA

Java is a programming language originally developed by Sun Microsystems and launched in 1995. While generally compiled to byte code, direct hardware execution of byte code by a Java processor is also possible. Currently, almost all of Java’s software is available under the GNU General Public License. Hence it has become free software. The Java programs most identifiable characteristic is that is platform independent, meaning that it should be able to be written and compiled once, and then be able to be run anywhere.

JAVA script is run on systems worldwide, and while not essential to all system, is intrinsic to many. Java develops Web services using applications and tools within their Web Services Stack. In this stack includes applications such as JAX-WS, JAXB, WSIT, JAXP, and XWSS, which create secure reliable, transactional, interoperable Web services.

Within the EDI environment, which requires a great number of translations, from one format to another in order to make communications understood, Java is present. Java integration with EDI documents is prolific. Products such as EDIReader allow for Java to be parsed bringing it into line with EDI standards.

It is able to be used in XML based systems that have custom SAX parsing. It can support HL7 standard documents, UN/EDIFACT, JDOM and ANSI documents.

It can also turn style sheets into EDI documents. Basically, Java helps to parse EDI documents. There are other products on the market which are translators and Envelope builders for the EDI process. As a translator, the OBOE system parses an EDI/XML file into Java objects. The objects are then used to interact with a GUI or database or some other process such as a web page or batch program.

As an envelope builder, it takes the EDI Objects and Java objects, and builds an EDI document. The EDI document can then be sent via e-mail, to a VAN for transmission, transmitted using a proprietary message delivering system, printed out and faxed - really a wide range of options and what that means is that the Java application separates all the components of the actual underlying “computer talk” of the text, and allows these technical elements then to be able to be represented as other document formats. Thus within EDI, the Java applications allow the EDI documents to be represented through other data formats following translation by the Java application.

EDI and .NET

According to Microsoft, .NET is a service delivery platform that supports business needs and Web service-connected IT. It is basically an umbrella term which encompasses a variety of technologies from Microsoft. The .NET framework is an integral part of the Windows operating system.

It maintains servers to host Web services, development tools to create them, applications to use them, and a worldwide network. It offers a range of Web service technologies that allow users to increase business possibilities by expanding their understanding of how technology can help. This technology is integrated throughout Microsoft products.

.NET is able to map EDI into business objects that can then be used by any .NET programming language such as Visual Basic, C#, Segments, and Data Fields can be mapped directly into objects and properties, for integration with any EDI format.

.NET advertises that it helps organizations get the most out of their technology, while creating new ways to implement other technologies. .NET is a force within the new Net culture, as it enables enterprises to transmit EDI documents.

.NET provides EDI a pathway for EDI to be transmitted through the Internet. The framework is within most Microsoft products, and is required for Widows and Vista applications. The movement of an EDI within the Internet is somewhat different to traditional EDI transmission. While it goes from the sender, it can then be transmitted using Internet protocols such as FTP or HTTP. This allows for a very fast transmission, and can also be encrypted for increased security.

EDI and Web Services

The W3C (World Wide Web Corporation) defines Web Services as a software system designed to support interoperable Machine to Machine interaction over a network. They are often an application programming interface (API) which is Web based, and as such is able to be accessed over a network, and executed on a remote system hosting the requested services.

Commonly the term Web Services refers to client servers that communicate using XML messages that follow the SOAP standard. SOAP is the protocol for exchanging XML based messages over computer networks, generally with HTTP. It is the basic messaging framework that supports more abstract layers.

For Java and .NET SOAP frameworks, the Web Services Description Language is a prerequisite, so that the information is able to be read by the receiving server. Web Services has no single set of specifications, and no absolute requirement.

However, the three main specifications of SOAP, WSDL and UDDI can be supplemented by non integral specifications when required. Web Services are being developed all throughout the IT industry as the new way to improve the technological communication between businesses. It provides businesses with solutions as to how they can improve efficiency of their services. However, Web Services is not just an advisory service. It is built on a framework of software.

EDI Solutions

Within the environment of EDI, solutions in this sense are applications which can bridge between the current technology of a system, and the upgrade of it. These solutions include mapping products, EDI implementation, web hosting, and integration, synchronizing with various parts of the business and trade partners.

A solution means that if there are problems or gaps within the EDI system for an enterprise, the entire industry of EDI experts are able to provide some end point solution. They are able to establish the needs of the enterprise and either custom create a solution, or supply with a ready made solution. These solutions are aimed at increasing productivity, and promoting connectivity between trading partners.

In this way, the current frameworks of any enterprise can be upgraded to create more efficient systems. Solutions can determine how to interface with systems and work with diverse EDI data sets using a variety of programming tools. They are potent within the areas of shipment status; purchase orders; important bills; advance shipment notices; and shipment information.

Solutions can be software that is both stand-alone and within integrated operations. Solutions can be found within all industries that utilize EDI. Other companies offer EDI and third party integration; sourcing management; logistics management; event management; and PO invoice reconciliation on the buyer’s side of solutions.

On the vendor’s side, the offers are for EDI and Web-EDI; Fax to EDI conversion; order management; scan-packing; and event management for vendors.

EDI History

EDI History

At its simplest, Electronic Data Exchange is the transmission of documents by electronic means. In other words, the paper-based documents are replaced by electronic data which is transmitted by a number of means. It is largely used in order to automate standard processes such as re-ordering, but its application is far broader than that, and it affects a range of industries and corporations.

EDI relies on electronic transmission, but is not necessarily email or using the Internet. In the least, EDI requires some level of sophisticated information technology infrastructure, which includes data processing, data management and networking capabilities.

This enables the efficient capture of data into electronic form, the processing and retention of data, controlled access to it, and efficient and reliable data transmission between remote sites. The other form of transmission medium is the VAN or value-added network, which acts as a middle man between the sender and receiver of the transmission, and can be a storehouse for un-received messages. These two options of transmission have their pros and cons.

EDI requires a standard set of rules for how to set out the documents, an order that they can be easily read by the machine at the other end. However, the potential for EDI is that it can link companies together in networks that provide efficient and cost reducing methods for delivery of not only data, but of financial payments and more possibilities that have previously been conceived.

Beginnings

The first computer was created in the late 17th century by Leibnitz. This would not be considered a computer by today’s standards, but a computational machine, which is a computer in its simplest form. However, it was unable to communicate messages, which still at that point required quill and paper. From these humble beginnings, the ages have advanced technology so that it no longer the scratch of the pen or the man with his post that sends messages, but electronic signals that allow our communications to become more swift and efficient.

Within this vein, today’s communication abilities are more fully realized through the innovation of messaging techniques such as SMS and email, which provide the youth of today with quick and easy calls to arms. However, other levels of society such as the business sector require other forms of communication devices to improve the daily running of corporations, companies and businesses. Within this area are fax, Internet and EDI. These mediums of communication allow for an increased rate of transmission, reduced errors and improved communication between partners. EDI has evolved since the 1960’s as an effective form of communication, and has recently come into it’s own as a must have for many business sectors.

From then Until now

During the 1960’s processing of business orders and shipping data was able to transmitted using networks. This was referred to Electronic Data Interchange or EDI. This occurred within the transport industry, where is found to be more time efficient to transfer data between trade partners that were on the same network. As such, the networks needed to be talking about the same thing in the same language. And so a set of documentation was created to allow for this. A committee called the Transportation Data Coordinating Committee was formed to coordinate the development of translation rules among four existing sets of industry-specific standards. Standardization was more in range when the X12 standards of the American National Standards Institute (ANSI) were issued.

These were an expansion on the TDCC standards, and eventually replaced them. At the same time, the UK Department of Customs and Excise in collaboration with the British Simplification of Trade Procedures Board (SITPRO) was also making moves to create standards for its documentation in international trade called Tradacoms. These were eventually extended by the United Nations Economic Commission for Europe (UNECE) into the General purpose Trade Data Interchange standards (GTDI), and were gradually taken on by about 2000 British exporter organizations. As two of the major traders of the world had created different and somewhat incompatible systems of standardization, problems arose.

These have been addressed by the formation of a United Nations Joint European and North American working party (UN-JEDI). Hence began the development the Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT) document translation standards. The automotive industry went through a similar confusion when GM attempted to reduce costs by holding an inventory which would be only a day’s worth of supply. In this way, their inventory costs were reduced considerably. They did this through EDI and thus set up their own mode of communication with suppliers. This style was soon adopted by other automotive entities in order to similarly reduce their costs.

This led to a need for standardized documentation across the industry. These were made clear through the Automotive Industry Action Group which worked with automakers and suppliers to develop an EDI standard for the entire industry. As such, the industry was able to create a standard which was related just to the automotive industry. Currently there is a large list of business documents which the standard covers, from shipping to trucking, to re-ordering. This list has developed over the last ten years, and includes the finance, health, trucking, shipping, automotive and various other sectors of industry. It has widened the scope of efficiency, decreased human related errors and reduced delays.

EDI is used world wide from Australia to Alaska. Improvements can be seen in areas such as inventory management, transport and distribution, administration and cash management. Currently EDI is in a great phase of expansions, where it is being used in collaboration with other data tools such as XML, and the Internet. These allow for the potential of EDI to come through as a tool not simply for data transmission, but as a means to create closer ties and networks for businesses and corporations.

Current Application of EDI

Although companies will change their advertising and adapt their style to new eras and demographics, often the internal infrastructure will remain unchanged for long periods. Lately, the introduction of various new technologies and communication devices forced many industries to reconsider their positions and how to interact not only with their target audience, but with each other.

Competition is always fierce on the industrial scale, and anything which can provide an advantage is eagerly sought. EDI has been adopted by many industries as it has many benefits such as increased cash flow, decreased error rate, improved time efficiency, decreased rates of delay and various other benefits. Thus for a long time, EDI has been on the scene.

The last ten years has seen an increasing use of technologies within business structures, such as the Internet. The incursion by the Internet into mainstream business, while still utilizing EDI, gives an indication of EDI’s flexibility and ability to evolve with new processes. Many businesses are using open Internet portals to exchange data, although it is not viewed as secure as other mediums of transmission. This enables those who do not have the EDI set up to still use the program. I allows for greater business flexibility, and increased networking capability.

At the moment, other systems are collaborating with EDI to form improved ways of transmitting and translating data. XML and EDI have been combined to create a system whereby the format and representation of the data can be more stylish than previously, but it utilizes the same transmission modes and protocols as previously. This new step in the technology requires advanced systems on either side of the transmission. EDI is also important for new systems of management such as Just in Time (JIT). This system allows for an increased efficiency of time management, and an increased regulation of ordering methods.

Since its inception, EDI has been widely utilized as a tool for decreasing error incidence and increasing efficiency and profitability. It has been able to cope with the changing technological world which includes now the use of Internet and other tools such as SAP and XML. EDI has continued to function well and to provide users with many benefits. Standards have been created that allow EDI to be used over the globe, thus creating a network of users, and improving the daily business life of many. Its impact in direct terms is to reduce the amount of data capture and transmission.

In general terms, this means decreased incidence of errors, few data-caused delays, and reduced time spent on exception-handling. These benefits combined with the ability to meld with current technologies are the greatest advantages of EDI. In 1991, there were perhaps 25,000 corporations using EDI. However, in the current business climate, EDI is viewed as a must have, not only to allow a corporation to trade, but as a tool to expanding business possibilities.