EDI for e-commerce
EDI for e-commerce
• New EDI services for electronic commerce are seen as the future bridge that automates external and internal business processes, enabling companies to improve their productivity on a scale never before possible.
• The economic advantages of EDI are widely recognized.
• But until recently, companies have been able to improve only discrete processes such as automating the accounts payable function or the fund's transfer process.
• Companies are realizing that to truly improve their productivity they need to automate their external processes as well as their internal processes.
• This is the thrust of new directions in EDI.
• EDI presents information management solutions that allow companies to link their trading community electronically—order entry, purchasing, accounts payable, funds transfer, and other systems interact with each other throughout the community to link the company with its suppliers, distributors, customers, banks, and transportation and logistics operations. EDI for e-commerce
• Another goal of new EDI services is to reduce the cost of setting up an EDI relationship. These costs are still very high because of the need for a detailed bilateral agreement between the involved business partners and for the necessary technical agreements. Therefore most successful EDI implementations are either in long-term partnerships or among a limited number of partners.
• With the advent of inter-organizational commerce, several new types of EDI are emerging that can be broadly categorized as traditional EDI and open EDI.
1) Traditional EDI
- Traditional EDI replaces the paper forms with almost strict one-to-one mappings between parts of a paper form to fields of electronic forms called transaction sets.
- Traditional EDI covers two basic business areas: Trade data interchange (TDI) and Electronic funds transfer (EFT)
1.. Trade data interchange (TDI) encompasses transactions such as purchase orders, invoices, and acknowledgments.
2.. Electronic funds transfer (EFT) is the automatic transfer of funds among banks and other organizations.
- Today, traditional EDI is divided into two camps: old EDI and new EDI.
a) Old EDI
- Old EDI is a term created by those working on the next generation of EDI standards to differentiate between the present and the future.
- Old EDI refers to the current practice of automating the exchange of information pertinent to the business activity.
- Information that is generated by the business process of one computer is transferred electronically and affects a corresponding business process in another computer.
- Old EDI is also used to refer to the current EDI-standardization process (e.g., X12, EDIFACT) where tens of thousands of people in groups (or working committees) all around the world are attempting to define generic document interchanges (e.g., purchase orders) that allow every company to choose its own, unique, proprietary version (that is a subset of the original transaction set).
b) New EDI
- New EDI is really a refocus of the standardization process.
- With old EDI, the standardization is focused on the interchange structure, on the transaction set in X12, or the message in EDIFACT.
- With new EDI the structure of the interchanges is determined by the programmer who writes the business application program, not by the lengthy standards process.
2) Open EDI
- Open EDI provides a framework where two potential trading partners can whip out an EDI structure for their potential partners in the short time frame that it takes them to draw up and negotiate the legal contracts.
- The increased interest in open EDT is a result of dissatisfaction with traditional EDI.
- Open EDI is a business procedure that enables electronic commerce to occur between organizations where the interaction is of short duration.
- In essence, open EDI is the process of doing EDI without the upfront trading partner agreement that is currently signed by the trading partners before they commence trying to do business by EDI.
Comments
Post a Comment