Electronic data interchange and its uses in daily life

A basic view on EDI

1. Electronic data interchange (edi) L R SIVA RAMAN ASSISTANT PROFESSOR PG & RESEARCH DEPARTMENT OF INTERNATIONAL BUSINESS Sri Ramakrishna college of arts & science

2. Electronic Data Interchange (EDI) is the electronic interchange of business information using a standardized format. It is a process which allows one company to send information to another company electronically rather than with paper.  Many business documents can be exchanged using EDI, but the two most common are  Purchase order Invoice   The real power of EDI is that it standardizes the information communicated in business documents, which makes possible a "paperless" exchange.

3. Difference between a T raditional document exchange and an EDI document exchange of a purchase order  Most companies create invoices using a computer system, print a paper copy of the invoice and mail it to the customer. Upon receipt, the customer frequently marks up the invoice and enters it into its own computer system. The entire process is nothing more than the transfer of information from the seller's computer to the customer's computer. EDI makes it possible to minimize or even eliminate the manual steps involved in this transfer.

4. In EDI transactions, information flows straight from one organization’s computer application to another’s computer program. The transaction entails the following: Data elements:  These are distinct pieces of information such as firm name, product code, quantity, and price. Each EDI standard comprises a specification for each data element inside every transaction set, which determines the data type (numeric, alphanumeric, date, time), minimum and maximum permissible length, and any related ‘code values’ (e.g., currency exchange code component for prices). Segments:  This refers to logically related sets of data components such as order number, volume, units, or price linked with a product inside a purchase order. A segment is always preceded by a segment ID, which indicates the type of material or information components comprising the segment. Envelopes:  This encapsulates transaction sets for transmission. Each transaction set is included in a separate message envelope, whereas a cluster of transaction sets (such as a group of bills) is enclosed in a group envelope. EDI is currently employed by businesses to exchange a multitude of document types, including purchase orders, invoices, requests for quotes, loan applications, and much more. In most instances, these businesses are trade partners that frequently exchange products and services as a component of their supply chains or Business-to-Business (B2B) partnerships.

5.  EDI technology provides five important business benefits: Conserve time and save money by automating a process that was previously completed manually using physical documents. Increase efficiency and output by sharing and processing more business documents in less time and with greater precision. Minimize mistakes via strict standardization, ensuring data is appropriately structured before entering business processes and applications. Connect electronic documents to various IT systems to assist data gathering, transparency, and analysis, facilitating traceability and reporting. Drive positive client experiences by facilitating rapid transaction execution and timely, dependable service and product delivery.

6. Types of EDI:

7. UN/EDIFACT standard: It is basically used for administration, Commerce and Transport. It is developed under UNITED NATIONS (UN) in 1987. ANSI ASC X12: It is used by health care, insurance, government and transportation. It is chartered American National Standards Institute (ANSI) in 1979

8. GS1 EDI It is used by Supply chain process for carrying out processes like Order, Dispatch Advice (Shipping Notice), Invoice, Transport Instruction, etc. TRADACOMS It is used by UK retail sector It contains transaction like Product information file, Price information file, the customer Information file, the order file and many more operations. HL7 It provides standard format for exchange of information related with retrieval of electronic health information