EDI

HISTORY  OF EDI

¢  It was not until the 1970’s, when work began for national EDI standards.

¢  Both client and vendors input their requirements to create a set of standard data formats that

—  were hardware independent;

—  were unambiguous and could be used by all trading partners;

—  reduced labor-intensive tasks such as data-entry;

—  allowed the sender of data to control the exchange including receipt confirmation of by the other party

EDI implies  the computer-to-computer exchange of business data in a standard,  machine-processable format.  The information is generally patterned after a conventional paper document, such as a purchase order or invoice. It is a “paperless trading”


Components of EDI

¢  Trading Partner

A trading partner is any company, government department, or commercial or non-commercial entity with whom an organization regularly exchanges documents of formatted data (not just letters or memos

¢  Trading Partner Agreement

—  A signed document between trading partners outlining all the conditions that will allow electronic communication.  The agreement states that the parties intend to be legally bound in the same manner as though they were exchanging paper documents.  The signature on the agreement serves as a substitute for signatures on paper documents.

¢  Mapping

—  The process of taking data from a company-specific format and fitting it into the EDI standard electronic format (as defined by a particular transaction set).

¢  Transaction Set

—  An EDI standard electronic format for a business document.

Benefit of EDI

¢  Transactions speed :With EDI Transactions speed has greatly increased. It has reduced the problem of transaction speed drastically by sending transactions electronically where they can be sent and received almost simultaneously.

¢  Reduces the risk of lost data: Reducing the risk of loss of data as physically /on paper data can be lost.