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E-Commerce and EDI
What is E-Commerce?
E-Commerce can be viewed as being a virtual market place, whereby all transaction that is carried out in the physical world is also available via the Internet. It involves mainly distribution, buying, selling, marketing and servicing of products or services through the use of electronic means such as the Internet, and other computer networks. E-Commerce involves not just businesses, but individual consumers and corporations. It generally utilizes the World Wide Web at some point in the transaction’s progress, but then also simpler computer tools such as databases and email.
Currently, it is foreseen that e-Commerce will continue to grow due to the increased familiarity of users with electronic business and commerce possibilities. The development of e-commerce over the last thirty years means that it has moved from meaning of EDI and EFT, which were introduced successfully in the late 60’s and early 70’s.
During the 1980’s, this expanded to the growth and acceptance of credit cards, automated teller machines and telephone banking. From the 1990’s onward, it includes ERP (enterprise resource planning), data mining and data warehousing. Currently it is becoming a wider description, due to the increased presence of web based activities. Basically it is coming more to mean web commerce, in that individuals and enterprises are tending to purchase goods and services over the World Wide Web. This generally occurs with secure connections that provide encryptions and special server protocols. Customers are able to use virtual shopping carts, and pay through electronic means, using credit card authorizations.
The last ten years has seen meteoric growth of electronic transfers and business possibilities. However, this was initially stunted at the beginning of general Internet use in the mid 90’s due to poor security systems. Thus it was not always a wise choice to purchase over the Net at that time. Many industries today are dependent on their electronic frameworks, and so support systems such as backend systems, applications and middleware have also developed. Some of these include broadband and fiber-optic networks, supply-chain management software, customer relationship management software, inventory control systems and financial accounting software. Currently, e-commerce is entranced in so many parts of life, from the ability to order groceries over the Internet to purchasing plane tickets around the world.
E-Commerce and EDI
Although it appears these two systems may not be able to play together, the opposite is true. In this current climate of utilizing all the technologies available to make businesses more accessible and more user friendly, EDI can combine with e-commerce to do just that. While EDI is well entrenched as a major framework in many larger businesses, it is also being adopted by smaller businesses to increase their ability to make trading partners. EDI provides a fast and efficient way to exchange information. Currently, there are standards known as AS2 which govern Internet EDI transactions. The use of EDI through Internet modes is becoming more popular, as it does not require the same amount of set-up, costs or applications as for bigger corporate enterprises.
The advantages of implementing EDI within the Internet environment, is that trading partners can be more efficiently and effectively communicated with, it reduces the amount of errors, and therefore improves cost effectiveness. It allows businesses to trade with larger enterprises that require EDI as a communication medium. Plus Internet EDI is relatively inexpensive, and does not carry with it the ongoing costs of other forms of EDI transmission. This can enable big and small companies to save potentially millions of dollars. Instead of mailing out catalogues and brochures, companies can send emails, and advise clients of discounts, and allow them to download information from the Internet.
This is made possible by EDI, which also allows retailers and distributors to have speedily and reliable communications. Retailers can easily determine product availability of a distributor prior to placing an order. If the distributor is out of stock temporarily, the order can be passed directly to the manufacturer, with the distributor receiving credit for the sale. When products are drop-shipped to retailers and distributors, an automatic requires for their stocking requirements can be generated. Orders are encrypted for Internet transmission and then converted to EDI format for internal processing. Thus EDI has become and integral part of business which has evolved from transactions between businesses, to those between individuals and businesses. It enables a certain level of interactivity, which creates closer relationships between all parties involved.
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