2. DOCUMENTS
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CUSTOMER
YOUR BUSINESS
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APPLICATION
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DOCUMENTS
3. INTRODUCTION TO EDI…..
• What is EDI?
▫ Electronic Data Interchange is the
computer-to-computer exchange of
business data and documents between
companies using standard formats
recognized both nationally and
internationally.
▫ The information used in EDI is organized
according to a specified format set by both
companies participating in the data
exchange.
4. HISTORY OF EDI…..
• The general idea behind EDI was
originated by a group of railroad
companies in the mid-1960’s, in the
United States.
• Much of the early work on EDI was driven
by the industry sectors for:
▫ transportation
▫ pharmaceuticals
▫ groceries
▫ automobiles
▫ banking
5. HISTORY OF EDI ….
• At about the same time, the U.K. Department of
Customs and Excise was developing its own
standards for documents used in international
trade, called Tradacoms. These were later
extended by (UNECE)The United Economic
Commission for Europe, and came to known as
the GTDI(Guidelines On Trade Data Exchange),
and were gradually accepted by some 2,000
British exporting organizations.
6. ADVANTAGES OF EDI….
• Lower operating costs
▫ Saves time and money
• Less Errors = More Accuracy
▫ No data entry, so less human error
• Increased Productivity
▫ More efficient personnel and faster
throughput.
• Faster trading cycle
▫ Streamlined processes for improved
trading relationships
7. DISADVANTAGES OF EDI…..
• High Dependence on the participation of
trading partners
• Costly for smaller companies
• Difficult to agree on standard to be used
8. VALUE ADDED NETWORK (VAN)
A private network used by a
company primarily for routing, storing and
delivering electronic data interchange
(EDI) messages. A value-added network
(VAN) also provides other services such as
message encryption, retransmission and
support. VANs may be operated by large
companies for efficient supply chain
management with their suppliers, or by
industry consortiums and telecom
providers.
9. VAN Model
Retailer A Wholesaler A
Retailer B Wholesaler B
Value-added
Network
Retailer C Wholesaler C
Retailer D Wholesaler D
10. Who Needs EDI or a VAN?
Companies still need…
• Assistance with formatting problems
• Authentication of customers
11. FEATURES OF EDI
• It has reduced data entry link, eliminates the
need for a paper bases system and improved
business cycle times by providing an electronic
link between companies.
• Exchange of data with several trading partners
directly.
12. • Interaction with multiple companies through
a central information clearing house.
• Example:
Currently uses of EDI include
information teller machines (ATMs) in banks
where EDI is used for transferring and
withdrawing funds between different bank
accounts, airline reservation systems, stock
exchange transactions and car reservation
systems.
13. FEATURES OF VAN
• Receives electronic messages and forwards
them onto the recipient.
• Low cost start-up
• EDI translation and mapping services with
Cyber Link
14. • Security exceeds industry standards to
protect data throughout VAN.
• Detailed billing.
• Value Added Network protects against
duplicate transmissions and will alert or
discard duplicate transmissions as required.
15. Web Services
• Applications that use a universal
language to send data and instructions to
one another, with no translation
required.
• Uses the Internet, so most of the
connection problems are eliminated.
16. EDI VIA INTERNET….
• Communication of EDI messages via the
Internet.
• EDI data is passed between trading partners
using Internet protocols.
• Protocols such as file transfer protocol (FTP),
secure file transfer protocol (SFTP) and AS2
(applicability statement 2)
17. EMAIL….
• ELECTRONIC DATA INTERCHANGE VIA
EMAIL .
• DEMANDS SMALL INVESTMENT AND SOME
IT KNOWLEDGE .
18. IMPLEMENTING EDI SYSTEM....
• COMPANY CAN PURCHASE EDI
PRODUCT…
Business / companies can purchase all
EDI product. Product purchase is usually the
most cost effective, long term solution for
implementing an EDI system.
19. • COMPANY CAN DEVELOP THEIR OWN
EDI SOFTWARE….
This option is time consuming and
quite expensive. There is also risk involved in
developing new software.
20. • COMPANY CAN USE EDI SERVICE
BUREAU…
With this option company sends its
business transactions to the service bureau
which performs the EDI service at its
location. Since fees for this service is quite
expensive, services bureaus are only
recommended as short term solution.
21. CASE STUDY : Sahara life Insurance
• The Company
Sahara Life Insurance is Sahara India Parivar’s
venture. Launched with an initial paidup capital
of Rs. 157 crore.
• http://www.saharalife.com/
• The Need:
To cut down on paper work in the company.
To cut down processing time.
To record every incoming paper from policy holders.
22. EDI FACT
• Electronic Data Interchange for
Administration, Commerce, and
Transport is the international set of EDI
standards.
• Became a UN standard in 1987.
• Maintenance and further development is
the responsibility of the United Nations
Centre for Trade Facilitation and
Electronic Business (UN/CEFACT).
23. EDI FACT
• Used for business-to-business (B2B)
communication rather than business-to-
consumer (B2C).
• Allows multi-country and multi-industry
exchange.
• Europe adopted EDIFACT early and has a
large installed base indicating its
continued use
24. Things you may want to remember . . .
(for the test)
• EDI – Electronic Data Interchange
• VAN – Value-Added Network
• EDIFACT – international set of EDI standards
• In the near future EDI will be vital for business
domestically and abroad
