Electronic data interchange, data and types.
- 1. Electronic data interchange(EDI) • EDI is inter company computer to computer exchange of information, normally provided on standard business documents such as invoices and purchase orders.
- 2. EDI • EDI differs from email in the sense that it transmits actual structured transaction with distinct fields such as • transaction date, • transaction amount, • sender’s name, • receiver’s name etc.
- 4. Requirements of EDI • Inter company communication capability • EDI translator software • Application link software • standardization
- 5. Inter- company communication capability • It requires both the parties- sender and receiver have a modem that enables their computers to communicate . • Both the parties must have same communication software that controls and transmits data. • Protocol is designed to recognize which party is controlling other party, examine received data, acknowledge receipt of data. • Protocol has error detecting mechanism to send negative acknowledgement in case of “error” and positive acknowledgement in case of “no error “
- 6. EDI translator software • EDI requires translator software to convert incoming and outgoing messages into a form comprehensible to other companies. • EDI translator can be placed either in mainframe or microcomputers. Few alternatives are:- • Stand alone micro computer solution • Microcomputer solution integrated with microcomputer application • Micro computer as front end and mainframe as application. • Mainframe solution
- 7. Application Link software • At sending side: • it accesses internal applications, collect information needed to generate the outgoing business document, process information, and generate outgoing business documents. • It formats the information into fixed length computer file and passing the file to EDI translator. • At the receiving side • its functions include reading file performing editing and validation and passing the information to internal files.
- 8. Standardization • Standardization is required so that all the parties use format which is mutually compatible so that data are exchanged without any problem. • If different participants follow different data formats there would be numerous problems in transmitting and receiving data.
- 9. Benefits of EDI • Cost Saving: • It can save countless employee hours in entering data on forms and handling forms • Mail and courier costs are also reduced as physical document transfer is replaced with EDI. • Speed • Electronic document exchange occurs instantaneously. • Reductions of Errors • There is no problem of lost or misrouted mail because communication is direct and immediately verifiable.
- 10. • Security • When documents are transferred physically , there are a number of opportunities for obtaining and altering the contents of the document • With EDI process some of the security techniques provide superior security to that of the manual technique. • Integration with other office automation applications
- 11. EDI applications – Retail Sectors – Manufacturing Industry – Automobile sector – Financial sector