EDI Business
EDI business is a generic term that can be used to describe several
forms of EDI usage in a business environment. EDI business could
be used to describe a company that sells EDI software
or services. At
the same time the term could be used to describe
the process of exchanging transaction information using EDI. It
is this latter definition that will be the focus of EDI business in
this article. In this
definition an EDI business is simply an organization
that exchanges transaction information like purchase orders and invoices
with its customers and vendors using an electronic form. An EDI
business would begin by selecting the EDI standard that it wishes to
use. There
are three predominant standards available for use
by an EDI business. The
ANSI X12 standard was created by the ANSI standards
board and is the predominant EDI format used in the US. The UN/EDIFACT
standard was created by the United Nations and is widely adopted outside
the US. The Tradcoms standard on the other hand was created in
the UK and is heavily used there.
Benefits for the EDI Business
Using EDI in your exchange of transaction data is a well established
and proven model. The automotive industry was one of the first
deployments of EDI business with the goal of enabling "just in
time" inventory models by minimizing the number of steps required
to exchange transaction information. Estimates place the amount
of time to process a single paper transaction as high as 17 minutes;
an EDI business can save a significant amount of time and money by
replacing those paper transactions with electronic equivalents.
The EDI Business Process
When exchanging transactions and EDI business uses a process that
is very similar to a paper one, but fully automated. As an example,
assume a business is sending a purchase order to a supplier. A
standard business they would create a purchase order, print it and
send it to the supplier by mail. The supplier would take the
purchase order, manually key it into their computer for tracking and
ship products to the customer along with an invoice. For an EDI
business the entire process can become electronic with the customer
generating a purchase order that is sent to to the supplier, also an
EDI business. The supplier in turn takes the received electronic
document, sends products to the customer and an invoice. Depending
on the configurations used, the entire process can be electronic when
two or more companies are an EDI business.
Enabling EDI Business for your Company
Becoming an EDI business is actually a much simpler process than most
organizations understand. Most companies become an EDI business
through some form of web-based tool that allows for EDI business exchanges
with minimal knowledge required on the part of the user. Over
time, however, you will want to bring your EDI business in-house and
you will need to invest in in-house EDI software to enable your EDI
business. This transition can actually happen very quickly, and
if many of your trading partners use EDI it may be worth-while from
the very beginning.
EDI Business in the Future
As you consider whether EDI business is right for your company, you
should keep in mind its longevity. EDI business has been performed
in one fashion or another for more than three decades - well before
the Internet became popular. This broad adoption and usage of
EDI business means that the likelihood of another technology displacing
EDI business is very small. As your organization embarks on
an EDI business venture, you can rest assured that the long-term health
of the EDI business strategy is solid and reliable.
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