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EDI Session 1

The document defines EDI as the electronic exchange of business documents in a standardized format. It discusses the history of EDI and electronic commerce from the 1960s to present day. It describes how businesses exchanged information before EDI, typically using paper documents and mail, and how EDI streamlined processes by allowing electronic data exchange without manual re-entry of information. The key components of an EDI system are identified as the application used to generate documents, a translator to convert documents to standard EDI format, and a communications system to facilitate electronic exchange between trading partners.

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Dileep Kumar Naidu Rayala
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146 views

EDI Session 1

The document defines EDI as the electronic exchange of business documents in a standardized format. It discusses the history of EDI and electronic commerce from the 1960s to present day. It describes how businesses exchanged information before EDI, typically using paper documents and mail, and how EDI streamlined processes by allowing electronic data exchange without manual re-entry of information. The key components of an EDI system are identified as the application used to generate documents, a translator to convert documents to standard EDI format, and a communications system to facilitate electronic exchange between trading partners.

Uploaded by

Dileep Kumar Naidu Rayala
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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EDI Session – 1

Objectives:

 Define EDI
 History of EDI and Electronic Commerce
 EDI in terms of specific transaction sets or messages
 The three primary components in an EDI system and
the function of each of those components
1960s-1970s Automation Within the Company
Continued..

 During the 1960s and 1970s companies were quickly moving


toward automation, but most automated processes did not extend
beyond company walls.
 Review the processes shown and note that all these activities can
take place within a single organization.
 The exchange of information between companies was generally
limited to traditional means such as mail, telex and the physical
sending and receiving of magnetic tape.
1980s - 1990s Extended Enterprise
Communication
Continued..

 The 1980s and 1990s brought rapid growth to communications


between enterprises.
 Value Added Networks (VANs) were no longer the primary or only
consideration for transmitting EDI documents.
 VAN: A privately owned network that provides a specific service,
such as legal research or access to a specialized database, for a
fee.
1990s - 2000s Electronic Commerce
Continued..

 In the past decade we have become an electronically integrated


society centered around electronic communications on a personal
level as well as commercially and industrially.
 The terms B2C (business to consumer) and B2B (business to
business) have become a part of our vocabulary.
Electronic Commerce - e-commerce

 Buying and selling of goods and services across the internet is


called e-commerce
 An e-commerce site can be as simple as a catalog page with a
phone number or it can range all the way to areal time credit and
processing site where customer can purchase downloadable
goods and receive them on spot
 EDI is just one of many electronic commerce technologies.
 e-business is a phrase often heard which was coined by IBM and
is simply conducting e-commerce over the Internet or other
electronic communication medium.
What Is EDI?
Continued..

Definition: The process of electronically exchanging business


documents in a standard format.

( OR )

Computer to computer exchange of business documents

( OR )

EDI is a set of standardized formats for different types of business


documents that allow “ Business Data Processing “ to exchange
documents without manual intervention.
Business Before EDI
The Business Process Before EDI
Paper purchase order business example:

 Purchase order data is manually keyed into a computer.


 Purchase order is printed.
 Internal mail is used to send purchase order to various
departments for processing.
 Copies of purchase order are filed in various departments.
 Purchase order is approved and mailed.
 Purchase order is delivered by post office.
 Data entry personnel for the company receiving the purchase
order re-key the data.
Answer these questions:

 How long does it take?

 How many hands touched the documents?

 How many times was the data keyed?

 How likely is it that errors will take place?


Business with EDI

 With EDI, documents could be sent electronically, eliminating time


delays inherent in the physical transmission of paper documents.
 It is the common electronic format of those documents that
provided the real benefit. With a common document language
(EDI standards) applications could send and receive documents
among numerous enterprises with less human intervention,
resulting in higher throughput with fewer errors and associated
costs.
Continued..

 The standard now appears to be the key to identifying EDI.


 These syntaxes are primarily defined by the American National
Standards Institute (ANSI) X12 committee and the UN/EDIFACT
Board. EDIFACT is an acronym for "EDI For Administration,
Commerce, and Transport".
 In ANSI X12 all business documents are called as Transaction
Sets
 In EDIFACT all business documents are called as Messages
EDI And The Business Cycle
EDIFACT Messages in Retail Domain
Some Common EDI X12 Transactions

 840 - Request for Quotation


 843 - Response to Request for Quotation
 850 - Purchase Order
 855 - Purchase Order Acknowledgment
 856 - Ship Notice/Manifest
 810 – Invoice
 820 - Payment Order / Remittance Advice
Other common ANSI X12 transaction sets:

 832 - Price/Sales Catalog


 860 - Purchase order change
 865 - Purchase order change Acknowledgment
 997 - Functional Acknowledgment
 CONTRL – EDIFACT Functional Acknowledgment
Industry Acceptance Of EDI
Continued..

 The transportation industry was one of the first to use EDI


concepts.

 In 1975, TDC released first EDI documentation to “ Rail Transport


industry Application”
Healthcare Transactions

 270 - Eligibility, Coverage or Benefit Inquiry


 271 - Eligibility, Coverage or Benefit Information
 272 - Property/Casualty Loss Notification
 273 - Insurance/Annuity Application Status
 274 - Health Care Provider Information
 275 - Patient Information
 276 - Health Care Claim Status Request
 277 - Health Care Claim Status Notification
 834 - Benefit Enrollment/Maintenance
 835 - Claim Payment/Advice
 837 - Healthcare Claim
EDI Today

 Virtually all industries have adopted some form of EDI today


 Examples of EDI documents include purchase orders, invoices,
and price information.
 Many industries use specific EDI documents such as motor carrier
rates, student records, tax returns, vehicle shipping orders.
 Companies want to achieve 100% electronic transaction volumes.
What Does EDI Involve?

 Application
“Business documents”

 Translator
“Standard format“

 Communications Vehicle
“Electronic Exchange”
Application Document Formats

 In the traditional business environment, there are no agreed upon


standards for paper documents or file formats
 Applications produce different document formats and require
different information
 Locating and interpreting information on different document
formats reduces productivity
Translation

 Most companies purchase or lease translation software

 Translation software translates business documents into a


common EDI standard for transmission to a trading partner

 Translation software also translates EDI Standard data into a


format suitable for application processing
Translation Software
Communications

 Value Added Network

 AS1 ( Applicable Statement 1)

 AS2 ( Applicable Statement 2)


Summary

 EDI is the electronic exchange of business documents in a


standard format
 EDI is one of many Electronic Commerce technologies
 The overall goal of EDI is to improve business performance
 The three primary components involved in EDI are:
Application
Translator
Communication Product
Q&A

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