EDI Format
To understand EDI you must understand EDI format. EDI or electronic
data interchange is a process by which businesses communicate to make
their trades as efficient, effective, and as profitable as possible. To
ensure that two businesses can communicate in this way there have been
universal EDI format standards that have been accepted and used by
a wide variety of companies. Without these EDI format standards
it would be difficult for businesses who are in different cities, states,
and even countries from one another to do business together. The
critical nature of the EDI format is the underlying foundation of EDI
and how it is used on a global scale.
The Basics of the EDI Format
When EDI was first created the question of standards quickly become
an issue. As the technology evolved, three key standards become
prevalent, each with its own EDI format. The ANSI X12 standard
is an EDI format that was adopted by the American National Standards
Institute and is the prevalent means of exchanging EDI in the United
States. Globally, the US/EDIFACT standard is the EDI format that
is most frequently used for trades outside of the US. The only
exception to these two is the Tradcoms standard used in the United
Kingdom.
What Does EDI Format it Mean to You?
Why should the EDI format matter to a business owner? Over the
long term the answer is that it won't. But initially understanding
which EDI format your business will need to support, and ensuring that
your software or service provider supports these formats is going to
be a critical decision for your business. While it's also important
to understand which EDI format your solution will support, you should
also understand how that software or service will support the standards
in question. Specifically, if you are dealing with a software
solution, will it require you to manually code each transaction type
according to the EDI format in question? Or does it give you options
to purchase pre-built "kits" that understand and deal with
the EDI format with minimal involvement on your part? As a business
owner you want to ensure that your dealings with issues like an "EDI
Format" take place at the very beginning of your adoption of EDI
and subsequently as little as possible.
Where is the EDI Format Going?
One question that may come up as you begin to adopt EDI is the question
of longevity of the standard. Over the past few years some academic
researches have proposed switching from the EDI format to an XML based
one for the sake of "simplicity." While over the course
of the next several years the XML format will gain some traction you
should not worry. The vast majority of US and global retailers
and large manufacturers have been using EDI for years and have no intentions
of switching to a new EDI format any time soon. The benefits
of any XML based standards would have to be dramatic for some of these
companies to justify the replacement costs of systems that in some
cases have been operational for years. As the old saying goes, "...if
it ain't broke, don't fix it ..." This saying has never been more
true than it is in the world of EDI. As these businesses continue
their growth and continue to bring new vendors on-board, the use of
EDI will continue to be safe.
How to Stay on Top of EDI Format
One of the last issues to consider is how to keep your understanding
of EDI format fresh and consistent as it may evolve. One of the
best ways of doing this is to keep in touch with your vendor; they
are experts in EDI format and can keep you updated on any EDI format
changes. A second and equally ideal source of information is
the standards bodies responsible for the EDI format. Their web
sites have current information on the EDI format and how it might be
changing over time. |
