Electronic Data Interchange
Encyclopedia
Electronic data interchange (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention.
It is more than mere e-mail; for instance, organizations might replace bills of lading
and even cheque
s with appropriate EDI messages. It also refers specifically to a family of standards.
In 1996, the National Institute of Standards and Technology
defined electronic data interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media." It distinguishes mere electronic communication or data exchange, specifying that "in EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing."
EDI can be formally defined as the transfer of structured data, by agreed message standards, from one computer system to another without human intervention.
The EDI standards were designed to be independent of communication and software technologies. EDI can be transmitted using any methodology agreed to by the sender and recipient. This includes a variety of technologies, including modem (asynchronous and synchronous), FTP
, e-mail, HTTP, AS1
, AS2
, etc. It is important to differentiate between the EDI documents and the methods for transmitting them. When they compared the synchronous protocol 2400 bit/s modems, CLEO
devices, and value-added network
s used to transmit EDI documents to transmitting via the Internet, some people equated the non-Internet technologies with EDI and predicted erroneously that EDI itself would be replaced along with the non-Internet technologies. These non-internet transmission methods are being replaced by Internet protocol
s such as FTP, telnet
, and e-mail, but the EDI documents themselves still remain.
As more trading partners use the Internet for transmission, standards have emerged. In 2002, the IETF published RFC 3335, offering a standardized, secure method of transferring EDI data via e-mail. On July 12, 2005, an IETF working group ratified RFC4130 for MIME
-based HTTP EDIINT (a.k.a. AS2
) transfers, and is preparing a similar RFC for FTP transfers (a.k.a. AS3
). While some EDI transmission has moved to these newer protocols, the providers of the value-added network
s remain active.
EDI documents generally contain the same information that would normally be found in a paper document used for the same organizational function. For example an EDI 940 ship-from-warehouse order is used by a manufacturer to tell a warehouse to ship product to a retailer. It typically has a ship to address, bill to address, a list of product numbers (usually a UPC
) and quantities. Another example is the set of messages between sellers and buyers, such as request for quotation (RFQ), bid in response to RFQ, purchase order, purchase order acknowledgment, shipping notice, receiving advice, invoice, and payment advice. However, EDI is not confined to just business data related to trade but encompasses all fields such as medicine (e.g., patient records and laboratory results), transport (e.g., container and modal information), engineering and construction, etc. In some cases, EDI will be used to create a new business information flow (that was not a paper flow before). This is the case in the Advanced Shipment Notification (856) which was designed to inform the receiver of a shipment, the goods to be received and how the goods are packaged.
Some major sets of EDI standards:
All of these standards first appeared in the early to mid 1980s. The standards prescribe the formats, character sets, and data elements used in the exchange of business documents and forms. The complete X12 Document List
includes all major business documents, including purchase orders (called "ORDERS" in UN/EDIFACT and an "850" in X12) and invoices (called "INVOIC" in UN/EDIFACT and an "810" in X12).
The EDI standard says which pieces of information are mandatory for a particular document, which pieces are optional and give the rules for the structure of the document. The standards are like building codes. Just as two kitchens can be built "to code
" but look completely different, two EDI documents can follow the same standard and contain different sets of information. For example a food company may indicate a product's expiration date while a clothing manufacturer would choose to send color and size information.
protocols for transmission, but most EDI is still transmitted using a VAN. In the healthcare industry, a VAN is referred to as a "clearinghouse".
acts as a regional post office. They receive transactions, examine the 'from' and the 'to' information, and route the transaction to the final recipient. VANs provide a number of additional services, e.g. retransmitting documents, providing third party audit information, acting as a gateway for different transmission methods, and handling telecommunications support. Because of these and other services VANs provide, businesses frequently use a VAN even when both trading partners are using Internet-based protocols. Healthcare clearinghouses perform many of the same functions as a VAN, but have additional legal restrictions that govern VANs also provide an advantage with certificate replacement in AS2 transmissions. Because each node in a traditionally business-related AS2 transmission usually involves a security certificate, routing a large number of partners through a VAN can make certificate replacement much easier.
or email attachments. There are also standards for embedding EDI documents into XML
. Many organizations are migrating to this protocol to reduce costs. For example, Wal-Mart
is now requiring its trading partners to switch to the AS2
protocol.
AS2 (Applicability Statement 2) is the draft specification standard by which vendor applications communicate EDI or other business-to-business data (such as XML) over the Internet using HTTP, a standard used by the World Wide Web. AS2 provides security for the transport payload through digital signatures and data encryption, and ensures reliable, non-repudiable delivery through the use of receipts.
. The final step is to import the transformed file (or database) into the company's back-end enterprise resource planning
(ERP) system.
For an "outbound" document the process for integrated EDI is to export a file (or read a database) from a company's back-end ERP, transform the file to the appropriate format for the translator. The translation software will then "validate" the EDI file sent to ensure that it meets the standard agreed upon by the trading partners, convert the file into "EDI" format (adding in the appropriate identifiers and control structures) and send the file to the trading partner (using the appropriate communications protocol).
Another critical component of any EDI translation software is a complete "audit" of all the steps to move business documents between trading partners. The audit ensures that any transaction (which in reality is a business document) can be tracked to ensure that they are not lost. In case of a retailer sending a Purchase Order to a supplier, if the Purchase Order is "lost" anywhere in the business process, the effect is devastating to both businesses. To the supplier, they do not fulfill the order as they have not received it thereby losing business and damaging the business relationship with their retail client. For the retailer, they have a stock outage and the effect is lost sales, reduced customer service and ultimately lower profits.
In EDI terminology "inbound" and "outbound" refer to the direction of transmission of an EDI document in relation to a particular system, not the direction of merchandise, money or other things represented by the document. For example, an EDI document that tells a warehouse to perform an outbound shipment is an inbound document in relation to the warehouse computer system. It is an outbound document in relation to the manufacturer or dealer that transmitted the document.
According to the 2008 Aberdeen report "A Comparison of Supplier Enablement around the World", only 34% of purchase orders are transmitted electronically in North America. In EMEA, 36% of orders are transmitted electronically and in APAC
, 41% of orders are transmitted electronically. They also report that the average paper requisition to order costs a company $37.45 in North America, $42.90 in EMEA and $23.90 in APAC. With an EDI requisition to order costs are reduced to $23.83 in North America, $34.05 in EMEA and $14.78 in APAC.
Another significant barrier is the cost in time and money in the initial set-up. The preliminary expenses and time that arise from the implementation, customization and training can be costly and therefore may discourage some businesses. The key is to determine what method of integration is right for the company which will determine the cost of implementation. For a business that only receives one P.O. per year from a client, fully integrated EDI may not make economic sense. In this case, businesses may implement inexpensive "rip and read" solutions or use outsourced EDI solutions provided by EDI "Service Bureaus". For other businesses, the implementation of an integrated EDI solution may be necessary as increases in trading volumes brought on by EDI force them to re-implement their order processing business processes.
The key hindrance to a successful implementation of EDI is the perception many businesses have of the nature of EDI. Many view EDI from the technical perspective that EDI is a data format; it would be more accurate to take the business view that EDI is a system for exchanging business documents with external entities, and integrating the data from those documents into the company's internal systems. Successful implementations of EDI take into account the effect externally generated information will have on their internal systems and validate the business information received. For example, allowing a supplier to update a retailer's Accounts Payables system without appropriate checks and balances would be a recipe for disaster. Businesses new to the implementation of EDI should take pains to avoid such pitfalls.
Increased efficiency and cost savings drive the adoption of EDI for most trading partners.
Protocols
Formats
Fixed-length formats
Separator formats
It is more than mere e-mail; for instance, organizations might replace bills of lading
Bill of lading
A bill of lading is a document issued by a carrier to a shipper, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified...
and even cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
s with appropriate EDI messages. It also refers specifically to a family of standards.
In 1996, the National Institute of Standards and Technology
National Institute of Standards and Technology
The National Institute of Standards and Technology , known between 1901 and 1988 as the National Bureau of Standards , is a measurement standards laboratory, otherwise known as a National Metrological Institute , which is a non-regulatory agency of the United States Department of Commerce...
defined electronic data interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media." It distinguishes mere electronic communication or data exchange, specifying that "in EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing."
EDI can be formally defined as the transfer of structured data, by agreed message standards, from one computer system to another without human intervention.
Standards
EDI is considered to be a technical representation of a business conversation between two entities, either internal or external. Note that there is a perception that "EDI" constitutes the entire electronic data interchange paradigm, including the transmission, message flow, document format, and software used to interpret the documents. EDI is considered to describe the rigorously standardized format of electronic documents. EDI is very useful in supply chain.The EDI standards were designed to be independent of communication and software technologies. EDI can be transmitted using any methodology agreed to by the sender and recipient. This includes a variety of technologies, including modem (asynchronous and synchronous), FTP
File Transfer Protocol
File Transfer Protocol is a standard network protocol used to transfer files from one host to another host over a TCP-based network, such as the Internet. FTP is built on a client-server architecture and utilizes separate control and data connections between the client and server...
, e-mail, HTTP, AS1
AS1 (networking)
AS1 is a specification about how to transport data securely and reliably over the Internet. Security is achieved by using digital certificates and encryption.- AS1 Technical Overview :...
, AS2
AS2
AS2 is a specification about how to transport data securely and reliably over the Internet. Security is achieved by using digital certificates and encryption.- AS2 Technical Overview :The AS2 protocol is based on HTTP and S/MIME...
, etc. It is important to differentiate between the EDI documents and the methods for transmitting them. When they compared the synchronous protocol 2400 bit/s modems, CLEO
Cleo
Cleo is a given name that is short for Cleopatra or Cleophalus and an alternate spelling of Clio. It is a Greek prefix often translated to mean 'pride', 'fame' or 'glory'.Cleo may refer to:-People:...
devices, and value-added network
Value-added network
A Value-added Network is a hosted service offering that acts as an intermediary between business partners sharing standards based or proprietary data via shared Business Processes...
s used to transmit EDI documents to transmitting via the Internet, some people equated the non-Internet technologies with EDI and predicted erroneously that EDI itself would be replaced along with the non-Internet technologies. These non-internet transmission methods are being replaced by Internet protocol
Internet Protocol
The Internet Protocol is the principal communications protocol used for relaying datagrams across an internetwork using the Internet Protocol Suite...
s such as FTP, telnet
TELNET
Telnet is a network protocol used on the Internet or local area networks to provide a bidirectional interactive text-oriented communications facility using a virtual terminal connection...
, and e-mail, but the EDI documents themselves still remain.
As more trading partners use the Internet for transmission, standards have emerged. In 2002, the IETF published RFC 3335, offering a standardized, secure method of transferring EDI data via e-mail. On July 12, 2005, an IETF working group ratified RFC4130 for MIME
MIME
Multipurpose Internet Mail Extensions is an Internet standard that extends the format of email to support:* Text in character sets other than ASCII* Non-text attachments* Message bodies with multiple parts...
-based HTTP EDIINT (a.k.a. AS2
AS2
AS2 is a specification about how to transport data securely and reliably over the Internet. Security is achieved by using digital certificates and encryption.- AS2 Technical Overview :The AS2 protocol is based on HTTP and S/MIME...
) transfers, and is preparing a similar RFC for FTP transfers (a.k.a. AS3
AS3 (networking)
AS3 is the draft specification standard by which vendor applications communicate EDI over the Internet using File Transfer Protocol ....
). While some EDI transmission has moved to these newer protocols, the providers of the value-added network
Value-added network
A Value-added Network is a hosted service offering that acts as an intermediary between business partners sharing standards based or proprietary data via shared Business Processes...
s remain active.
EDI documents generally contain the same information that would normally be found in a paper document used for the same organizational function. For example an EDI 940 ship-from-warehouse order is used by a manufacturer to tell a warehouse to ship product to a retailer. It typically has a ship to address, bill to address, a list of product numbers (usually a UPC
Universal Product Code
The Universal Product Code is a barcode symbology , that is widely used in North America, and in countries including the UK, Australia, and New Zealand for tracking trade items in stores. Its most common form, the UPC-A, consists of 12 numerical digits, which are uniquely assigned to each trade item...
) and quantities. Another example is the set of messages between sellers and buyers, such as request for quotation (RFQ), bid in response to RFQ, purchase order, purchase order acknowledgment, shipping notice, receiving advice, invoice, and payment advice. However, EDI is not confined to just business data related to trade but encompasses all fields such as medicine (e.g., patient records and laboratory results), transport (e.g., container and modal information), engineering and construction, etc. In some cases, EDI will be used to create a new business information flow (that was not a paper flow before). This is the case in the Advanced Shipment Notification (856) which was designed to inform the receiver of a shipment, the goods to be received and how the goods are packaged.
Some major sets of EDI standards:
- The UNUnited NationsThe United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
-recommended UN/EDIFACT is the only international standard and is predominant outside of North America. - The USUnited StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
standard ANSI ASC X12 (X12) is predominant in North America. - The TRADACOMSTRADACOMSTradacoms is an early standard for EDI primarily used in the UK retail sector. It was introduced in 1982 as an implementation of the UN/GTDI syntax, one of the precursors of EDIFACT, and was maintained and extended by the UK Article Numbering Association .The standard is obsolescent since...
standard developed by the ANA (Article Numbering Association now known as GS1GS1Founded in 1977, GS1 is an international not-for-profit association dedicated to the development and implementation of global standards and solutions to improve the efficiency and visibility of supply and demand chains globally and across multiple sectors...
) is predominant in the UKUnited KingdomThe United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
retail industry. - The ODETTE standard used within the European automotive industry
All of these standards first appeared in the early to mid 1980s. The standards prescribe the formats, character sets, and data elements used in the exchange of business documents and forms. The complete X12 Document List
X12 Document List
The following is a list of the approved EDI ANSI X12 documents for EDI version 4 Release 1 :- Order Series :- Materials Handling Series :- Tax Services Series :- Warehousing Series :- Financial Series :...
includes all major business documents, including purchase orders (called "ORDERS" in UN/EDIFACT and an "850" in X12) and invoices (called "INVOIC" in UN/EDIFACT and an "810" in X12).
The EDI standard says which pieces of information are mandatory for a particular document, which pieces are optional and give the rules for the structure of the document. The standards are like building codes. Just as two kitchens can be built "to code
Building code
A building code, or building control, is a set of rules that specify the minimum acceptable level of safety for constructed objects such as buildings and nonbuilding structures. The main purpose of building codes are to protect public health, safety and general welfare as they relate to the...
" but look completely different, two EDI documents can follow the same standard and contain different sets of information. For example a food company may indicate a product's expiration date while a clothing manufacturer would choose to send color and size information.
Specifications
Organizations that send or receive documents between each other are referred to as "trading partners" in EDI terminology. The trading partners agree on the specific information to be transmitted and how it should be used. This is done in human readable specifications (also called Message Implementation Guidelines). While the standards are analogous to building codes, the specifications are analogous to blue prints. (The specification may also be called a "mapping," but the term mapping is typically reserved for specific machine-readable instructions given to the translation software.) Larger trading "hubs" have existing Message Implementation Guidelines which mirror their business processes for processing EDI and they are usually unwilling to modify their EDI business practices to meet the needs of their trading partners. Often in a large company these EDI guidelines will be written to be generic enough to be used by different branches or divisions and therefore will contain information not needed for a particular business document exchange. For other large companies, they may create separate EDI guidelines for each branch/division.Transmission
Trading partners are free to use any method for the transmission of documents. In the past one of the more popular methods was the usage of a bisync modem to communicate through a value added network (VAN). Some organizations have used direct modem to modem connections and bulletin board systems (BBS), and recently there has been a move towards using some of the many InternetInternet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
protocols for transmission, but most EDI is still transmitted using a VAN. In the healthcare industry, a VAN is referred to as a "clearinghouse".
Value-added networks
In the most basic form, a VAN (value-added network)Value-added network
A Value-added Network is a hosted service offering that acts as an intermediary between business partners sharing standards based or proprietary data via shared Business Processes...
acts as a regional post office. They receive transactions, examine the 'from' and the 'to' information, and route the transaction to the final recipient. VANs provide a number of additional services, e.g. retransmitting documents, providing third party audit information, acting as a gateway for different transmission methods, and handling telecommunications support. Because of these and other services VANs provide, businesses frequently use a VAN even when both trading partners are using Internet-based protocols. Healthcare clearinghouses perform many of the same functions as a VAN, but have additional legal restrictions that govern VANs also provide an advantage with certificate replacement in AS2 transmissions. Because each node in a traditionally business-related AS2 transmission usually involves a security certificate, routing a large number of partners through a VAN can make certificate replacement much easier.
- Value-added networks are the go-between in EDI communications.
- The VAN is responsible for routing, storing and delivering EDI messages. They also provide delivery reports
- Depending on the VAN type, messages may need extra envelopes or may be routed using intelligent *VANs which are able to read the EDI message itself.
- VANs may be operated by various entities:
- telecom companies;
- industry group consortia;
- a large company interacting with its suppliers/vendors.
Internet/AS2
Until recently, the Internet transmission was handled by nonstandard methods between trading partners usually involving FTPFile Transfer Protocol
File Transfer Protocol is a standard network protocol used to transfer files from one host to another host over a TCP-based network, such as the Internet. FTP is built on a client-server architecture and utilizes separate control and data connections between the client and server...
or email attachments. There are also standards for embedding EDI documents into XML
XML
Extensible Markup Language is a set of rules for encoding documents in machine-readable form. It is defined in the XML 1.0 Specification produced by the W3C, and several other related specifications, all gratis open standards....
. Many organizations are migrating to this protocol to reduce costs. For example, Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
is now requiring its trading partners to switch to the AS2
AS2
AS2 is a specification about how to transport data securely and reliably over the Internet. Security is achieved by using digital certificates and encryption.- AS2 Technical Overview :The AS2 protocol is based on HTTP and S/MIME...
protocol.
AS2 (Applicability Statement 2) is the draft specification standard by which vendor applications communicate EDI or other business-to-business data (such as XML) over the Internet using HTTP, a standard used by the World Wide Web. AS2 provides security for the transport payload through digital signatures and data encryption, and ensures reliable, non-repudiable delivery through the use of receipts.
Interpreting data
EDI translation software provides the interface between internal systems and the EDI format sent/received. For an "inbound" document the EDI solution will receive the file (either via a Value Added Network or directly using protocols such as FTP or AS2), take the received EDI file (commonly referred to as a "mailbag"), validate that the trading partner who is sending the file is a valid trading partner, that the structure of the file meets the EDI standards, and that the individual fields of information conform to the agreed upon standards. Typically the translator will either create a file of either fixed length, variable length or XML tagged format or "print" the received EDI document (for non-integrated EDI environments). The next step is to convert/transform the file that the translator creates into a format that can be imported into a company's back-end business systems or ERP. This can be accomplished by using a custom program, an integrated proprietary "mapper" or to use an integrated standards based graphical "mapper" using a standard data transformation language such as XSLTXSLT
XSLT is a declarative, XML-based language used for the transformation of XML documents. The original document is not changed; rather, a new document is created based on the content of an existing one. The new document may be serialized by the processor in standard XML syntax or in another format,...
. The final step is to import the transformed file (or database) into the company's back-end enterprise resource planning
Enterprise resource planning
Enterprise resource planning systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application...
(ERP) system.
For an "outbound" document the process for integrated EDI is to export a file (or read a database) from a company's back-end ERP, transform the file to the appropriate format for the translator. The translation software will then "validate" the EDI file sent to ensure that it meets the standard agreed upon by the trading partners, convert the file into "EDI" format (adding in the appropriate identifiers and control structures) and send the file to the trading partner (using the appropriate communications protocol).
Another critical component of any EDI translation software is a complete "audit" of all the steps to move business documents between trading partners. The audit ensures that any transaction (which in reality is a business document) can be tracked to ensure that they are not lost. In case of a retailer sending a Purchase Order to a supplier, if the Purchase Order is "lost" anywhere in the business process, the effect is devastating to both businesses. To the supplier, they do not fulfill the order as they have not received it thereby losing business and damaging the business relationship with their retail client. For the retailer, they have a stock outage and the effect is lost sales, reduced customer service and ultimately lower profits.
In EDI terminology "inbound" and "outbound" refer to the direction of transmission of an EDI document in relation to a particular system, not the direction of merchandise, money or other things represented by the document. For example, an EDI document that tells a warehouse to perform an outbound shipment is an inbound document in relation to the warehouse computer system. It is an outbound document in relation to the manufacturer or dealer that transmitted the document.
Advantages over paper systems
EDI and other similar technologies save a company money by providing an alternative to, or replacing information flows that require a great deal of human interaction and materials such as paper documents, meetings, faxes, etc. Even when paper documents are maintained in parallel with EDI exchange, e.g. printed shipping manifests, electronic exchange and the use of data from that exchange reduces the handling costs of sorting, distributing, organizing, and searching paper documents. EDI and similar technologies allow a company to take advantage of the benefits of storing and manipulating data electronically without the cost of manual entry. Another advantage of EDI is reduced errors, such as shipping and billing errors, because EDI eliminates the need to rekey documents on the destination side. One very important advantage of EDI over paper documents is the speed in which the trading partner receives and incorporates the information into their system thus greatly reducing cycle times. For this reason, EDI can be an important component of just-in-time production systems.According to the 2008 Aberdeen report "A Comparison of Supplier Enablement around the World", only 34% of purchase orders are transmitted electronically in North America. In EMEA, 36% of orders are transmitted electronically and in APAC
Asia-Pacific
Asia-Pacific or Asia Pacific is the part of the world in or near the Western Pacific Ocean...
, 41% of orders are transmitted electronically. They also report that the average paper requisition to order costs a company $37.45 in North America, $42.90 in EMEA and $23.90 in APAC. With an EDI requisition to order costs are reduced to $23.83 in North America, $34.05 in EMEA and $14.78 in APAC.
Barriers to implementation
There are a few barriers to adopting electronic data interchange. One of the most significant barriers is the accompanying business process change. Existing business processes built around slow paper handling may not be suited for EDI and would require changes to accommodate automated processing of business documents. For example, a business may receive the bulk of their goods by 1 or 2 day shipping and all of their invoices by mail. The existing process may therefore assume that goods are typically received before the invoice. With EDI, the invoice will typically be sent when the goods ship and will therefore require a process that handles large numbers of invoices whose corresponding goods have not yet been received.Another significant barrier is the cost in time and money in the initial set-up. The preliminary expenses and time that arise from the implementation, customization and training can be costly and therefore may discourage some businesses. The key is to determine what method of integration is right for the company which will determine the cost of implementation. For a business that only receives one P.O. per year from a client, fully integrated EDI may not make economic sense. In this case, businesses may implement inexpensive "rip and read" solutions or use outsourced EDI solutions provided by EDI "Service Bureaus". For other businesses, the implementation of an integrated EDI solution may be necessary as increases in trading volumes brought on by EDI force them to re-implement their order processing business processes.
The key hindrance to a successful implementation of EDI is the perception many businesses have of the nature of EDI. Many view EDI from the technical perspective that EDI is a data format; it would be more accurate to take the business view that EDI is a system for exchanging business documents with external entities, and integrating the data from those documents into the company's internal systems. Successful implementations of EDI take into account the effect externally generated information will have on their internal systems and validate the business information received. For example, allowing a supplier to update a retailer's Accounts Payables system without appropriate checks and balances would be a recipe for disaster. Businesses new to the implementation of EDI should take pains to avoid such pitfalls.
Increased efficiency and cost savings drive the adoption of EDI for most trading partners.
See also
- Expense and Cost Recovery System (ECRS)Expense and Cost Recovery System (ECRS)Expense and Cost Recovery Systems An Expense and Cost Recovery System is a specialized subset of “Extract – Transform – Load” functioning as a powerful and flexible set of applications, including programs, scripts and databases designed to improve the cash flow of businesses and organizations by...
- Extract - Transform - Load (ETL)Extract, transform, loadExtract, transform and load is a process in database usage and especially in data warehousing that involves:* Extracting data from outside sources* Transforming it to fit operational needs...
- Legal Electronic Data Exchange Standard (LEDES)Legal Electronic Data Exchange StandardThe Legal Electronic Data Exchange Standard is a set of file format specifications intended to standardize bill/invoice data transmitted electronically from a law firm to a corporate client...
Protocols
- HTTP / HTTPSHttpsHypertext Transfer Protocol Secure is a combination of the Hypertext Transfer Protocol with SSL/TLS protocol to provide encrypted communication and secure identification of a network web server...
- C1OnRamp (based on HTTP)
- POP3/SMTP
- OFTPOFTPThe Odette File Transfer Protocol is a protocol used for EDI between two communications business partners. It comes from the Odette-Organisation ....
/ OFTP2 - SOAPSOAPSOAP, originally defined as Simple Object Access Protocol, is a protocol specification for exchanging structured information in the implementation of Web Services in computer networks...
- WebDAVWebDAVWeb-based Distributed Authoring and Versioning is a set of methods based on the Hypertext Transfer Protocol that facilitates collaboration between users in editing and managing documents and files stored on World Wide Web servers...
- X.400X.400X.400 is a suite of ITU-T Recommendations that define standards for Data Communication Networks for Message Handling Systems — more commonly known as "email"....
- EDIINT
- EDIINT AS1AS1 (networking)AS1 is a specification about how to transport data securely and reliably over the Internet. Security is achieved by using digital certificates and encryption.- AS1 Technical Overview :...
(extension to mail transport) - EDIINT AS2AS2AS2 is a specification about how to transport data securely and reliably over the Internet. Security is achieved by using digital certificates and encryption.- AS2 Technical Overview :The AS2 protocol is based on HTTP and S/MIME...
(based on HTTP transport) - EDIINT AS3AS3 (networking)AS3 is the draft specification standard by which vendor applications communicate EDI over the Internet using File Transfer Protocol ....
(based on FTP transport) - EDIINT AS4AS4AS4 is a Conformance Profile of the OASIS ebMS 3.0 specification, and represents an open standard for the secure and payload-agnostic exchange of Business-to-business documents using Web services. Secure document exchange is governed by aspects of WS-Security, including XML Encryption and XML...
(based on WebServices)
- EDIINT AS1
Formats
- ANSIAnsiAnsi is a village in Kaarma Parish, Saare County, on the island of Saaremaa, Estonia....
X.12- X12
- X12 Document ListX12 Document ListThe following is a list of the approved EDI ANSI X12 documents for EDI version 4 Release 1 :- Order Series :- Materials Handling Series :- Tax Services Series :- Warehousing Series :- Financial Series :...
- X12 EDIFACT MappingX12 EDIFACT MappingIn 1979, the American National Standards Institute chartered the Accredited Standards Committee X12 to develop uniform standards for interindustry electronic exchange of business transactions-electronic data interchange...
- XML
- cXMLCXMLcXML is a protocol, created by Ariba, intended for communication of business documents between procurement applications, e-commerce hubs and suppliers...
- xCBLXCBLxCBL is a collection of XML specifications for use in e-business. It was created by Commerce One Inc. and is maintained by Perfect Commerce.- History :xCBL was originally called Common Business Library...
- OpenTRANS
- chemXML
- SAP-XML
- ebXMLEbXMLElectronic Business using eXtensible Markup Language, commonly known as e-business XML, or ebXML as it is typically referred to, is a family of XML based standards sponsored by OASIS and UN/CEFACT whose mission is to provide an open, XML-based infrastructure that enables the global use of...
- RosettaNetRosettaNetRosettaNet is a non-profit consortium aimed at establishing standard processes for the sharing of business information . RosettaNet is a consortium of major Computer and Consumer Electronics, Electronic Components, Semiconductor Manufacturing, Telecommunications and Logistics companies working to...
- UBLUniversal Business LanguageUniversal Business Language is a library of standard electronic XML business documents such as purchase orders and invoices. UBL was developed by an OASIS Technical Committee with participation from a variety of industry data standards organizations. UBL is designed to plug directly into existing...
- cXML
- TradacomsTRADACOMSTradacoms is an early standard for EDI primarily used in the UK retail sector. It was introduced in 1982 as an implementation of the UN/GTDI syntax, one of the precursors of EDIFACT, and was maintained and extended by the UK Article Numbering Association .The standard is obsolescent since...
- EDIFACTEDIFACTUnited Nations/Electronic Data Interchange For Administration, Commerce and Transport is the international EDI standard developed under the United Nations...
- CEFICCEFICThe European Chemical Industry Council or CEFIC , is the main European trade association for the chemical industry. It was founded in 1959, and its history follows through the creation of the European Union...
– Chemical - GS1GS1Founded in 1977, GS1 is an international not-for-profit association dedicated to the development and implementation of global standards and solutions to improve the efficiency and visibility of supply and demand chains globally and across multiple sectors...
eCOM EANCOM – Retail - EDIBDB – Construction
- EDIFICE – High Tech Industry
- EDIFURN – Furniture
- EDIGAS – Gas
- EDILEKTRO - Electro
- EDILIBE – Books
- EDITEC - Sanitary
- EDITEX – Fashion
- EDIFOR/EDITRANS - Transports & Logistics
- EDIWHEEL - Wheels & Tyres
- ETIS - Telecommunication
- STAR - Standards for Technology in Automotive Retail
- SPEC2000 - Airline Industry http://www.spec2000.com/
- FORTRASFORTRASFortras is an EDI standard for data exchange between carriers....
- Transports & Logistics
Fixed-length formats
- EURITMO
Separator formats
- CSVComma-separated valuesA comma-separated values file stores tabular data in plain-text form. As a result, such a file is easily human-readable ....
External links
- E-Procurement — Electronic Data Integration Comes of Age- Article from Finance Director Europe Journal
- EDI: An Introduction
- EDI Basics – options and different approaches to EDI
- United Nations Directories for Electronic Data Interchange – administering body for UN/EDIFACT standards
- ODETTE – automotive EDI Standards body
- Jobisez list of trading partners – Research EDI Hubs specifications and their supplier portal
- EDI Academy – A resource for free EDI Tutorials and a Quiz.
- Gengeswari, K. and Abu Bakar Abdul Hamid (2010). Integration of electronic data interchange: a review.
- Jurnal Kemanusiaan, ISSN 1675-1930
- EDIGenie - All things related to EDI