EDI Elements

EDI Elements

Variables

EDI sounds similar to electronic mail (email), but is actually quite different. While email allow for free unstructured test messages to be sent from one computer to another (or multiple) computers, EDI supports structured business messages to be transmitted between partners. Previously these would have been hard copy documents or printed business documents. So rather than having documents pass from person to person, they go from computer to computer. Essentially, EDI is made of four elements. Firstly, EDI are based on the use of an electronic transmission medium, such as a VAN, but now increasingly on the open Internet. This is opposed to the physical storage mediums of magnetic tapes and computer disks.

Secondly, EDI’s use structured formatted messages that are based on agreed standards - in this way the messages can be read by any system that understands the rules they are governed by. However, this is not always as simple as it seems, as there are also the provision of EDI translation software packages. These are required to set up an interface between the company computer and the EDI sent/received document. EDI provides a relatively fast delivery of electronic documents from sender to receiver. And lastly, EDI provides direct communication between applications, rather than between computers. EDI requires some degree of technology infrastructure.

This includes data management and networking capabilities, data processing, the efficient capture of data into electronic form, the processing and retention of data, controlled access to it, and efficient and reliable data transmission between remote sites. Although it is possible for communication partners who use EDI to be directly linked to one another, it is most likely preferable to use a third party service provider. The EDI system creates a protocol by which businesses and governments alike are able to swiftly exchange information with a unified code system to recreate documents that are sent electronically.

Overview

EDI provides a safe, easy and paper free exchange of information between businesses, companies and governments using protocols that allow different systems to understand each other. EDI opens up communication between applications, thereby eliminating the human element, which can be not only prone to error, but also time consuming. So rather that putting documents into an envelope, finding a stamp, addressing the envelope and sending it through the post, what EDI does is eliminate this process and replace it electronically. However, EDI is only considered to be the standardized format of the transmitted message. EDI itself is a highly regulated protocol which allows the message to be sent between entities that may not work on the same system.

The EDI consists of many symbols and words that can be read with a “solution” and thereby be a document that is understood by both entities. The advantages of EDI have been proposed as being the reduction of unnecessary re-captures of data, and the automation of existing processes. It is used world wide by over 30,000 Corporations and Businesses to conduct business transactions electronically. Not only does it provide increased efficiency due to limited human interference, but it allows for international protocols to be recognized, and thereby stream line corporation communications.

Although the fullest range of business documents have not been devised which can cater to the international needs, they are in the process of production. Industries such as inventory management, transport and distribution, administration and cash management can all benefit through the use of this system. It directly reduces the amount of data capture and transcription, which generally reduces the incidence of errors, handling time and incidence of delays, which are critical to businesses. It is these delays which can often make or break business ventures. However, with EDI, these can either be eliminated or heavily reduced.

Underlying the increased efficiency, these systems are run on what are now internationally agreed upon standards and protocols which allow information to be freely and securely exchanged through a variety of mediums. No longer are companies, corporations or governments constrained by the speed at which a package, or document pile can travel within a transport vehicle. The transmissions using EDI can be almost instantaneous, and thereby alleviate some stresses, and increase the ability of users to communicate more effectively.