Precision E-Business Group
    Trusted EDI/B2B Strategies

EDI (Electronic Data Interchange)

 Terminology

Electronic Data Interchange. The computer-to-computer transfer of business transaction information (such as invoices and purchase orders) using standard, industry accepted, message formats.

FUNCTIONAL
ACKNOWLEGEMENT
Informs the sender that their transaction has been successfully sent and received at the receiving end. This guarantees information will not be lost.

TRANS! ATCW

Ensures that the EDI transaction sets are in proper EN format for both the sending and receiving trading partners.

DATA MAPPING

The process of converting one trading partner's document into the EDI format required of the other trading partner.

TRADING PARTNER

A company that uses EDI, in which you are sending and receiving documents with.

TRANSACTION SET

Can be information such as purchase orders or invoices, which are simply EDI documents.

VAN

Value Added Network.

AS2

Applicability Statement 2.

FTP

File Transfer Protocol.

What Exactly Is EDI?

Electronic Data Interchange or better known as EDI is the transfer of business documents electronically from one company's computer system application to another. EDI documents such as, purchase orders, invoices, advance shipping notices and many others can be electronically sent. This process greatly reduces the potential of human data entry error and improves overall process cycle while greatly reducing costs. EDI is utilized in and across industries such as manufacturing, pharmaceutical, retail, logistics, health care, and many more.
Before EDI was developed, documents would be generated by the originators computer system, printed, then mailed or faxed to the intended recipient. Upon receipt the documents would be manually processed and then data entry into the appropriate system would take place. The entire process has multiple points of potential error from a simple data issue to the loss of a complete document(s). The process cycle is significant due to the number of manual steps required to complete a transaction.
There are no universal standards as to how data should be formatted or stored within a company's internal computer systems. Business documents take many shapes and the data can be stored in many formats. This lack of standardization across company computer systems makes the electronic exchange of data a formidable task. While companies can select to develop specific proprietary formats many select to adapt ANSI ASC X12 standards. These were developed to provide an open system allowing anyone who adopted those standards to electronically exchange documents. Companies could then "standardize" on how they received and/or generated these X12 standards for various business documents through a process known as data mapping.
EDI can deliver significant process and cost improvements to an organization. Where inventories are involved, EDI is the enabler of today's JIT or "Just in Time" management process. Outsourced EDI services can deliver a very positive return on investment.

Benefits of EDI

  • Decreases operational costs
  • Increases accuracy of information
  • Increases efficiency and productivity
  • Decreases postage and faxing costs
  • Increases transaction volumes Improves reporting
  • Improves sales tracking Decreases inventory costs
  • Decreases the chances of error
  • Eliminates the need for paper
  • Improves customer service documentation