Marriage of the three disciplines (EDI)

Marriage of the three disciplines

EDI involves three very different and distinct disciplines. First, there has to be a business process. If the business process would be improved by being accomplished more quickly and with increased efficiency, then the business process is a candidate for EDI. The business process is the domain of the business functional area. Second, once the business process has been identified, data processing technologies have to be applied to the business process so that the process can be handled using computers. Some type of standard must come into play in the automation process so that paper documents that are the output of the business process can be put into a format that is interchangeable between computers. The automation of the business process is the domain of the data processing discipline. Third, the standardized business form must be transmitted from and received by computers, using data communications technologies. The data communications aspect of EDI is the domain of the data communications discipline.

The marriage of these disciplines allows for the "paperless trading" that comprises EDI technologies. As EDI technologies evolve, the terminology changes.

Paper document flow

The traditional document flow for purchasing transactions starts with data entry by the purchaser to create a paper document to send by mail to trading partners. Once the trading partners receive the data, they keystroke the information received into a local application and then perform more data entry by entering a response into a local application. The resultant paper document is then mailed to the purchaser.

The procedure is both time consuming and labor intensive because data from both trading partners has to be entered twice, once at the point of creation and once at the point of entry to the foreign system. In addition, the originator must await a paper response sent by mail.

EDI flow

EDI data is key in only one time, at the original point of entry. The data is then translated into a standard format electronically and sent to the trading partner electronically. At the receiving end, the data fields are mapped into local applications, and the only data entry required is for new data that may be needed to respond to the data received.

Time for transmission is also very fast in comparison to postal mail. Even on a slow modem connection, the time is considerably shorter than through the postal service.

Standards

Although communications and document standards are both critical, document standards are the heart of EDI (Kimberly, 1991).

The role of standards

Standards are a necessary part of EDI. Every business has application files that are used to manipulate their data in ways that are familiar to the business. The problem is that most businesses, though using the same types of data, do not use the same application programs or hardware and software platforms. If businesses are to be able to communicate their data to one another, they must have a common ground to meet on to allow the exchange of the information. Standards are the solutions to this problem. All business that conform to specific standards can share data in the formats delineated by those standards.

ANSI ASC X12

The American National Standards Institute's Accredited Standards Committee X12 (ANSI ASC X12) is the accepted standard for EDI transactions in the United States. The ANSI ASC X12 committee has the mandate to develop variable-length data formats for standard business transactions. The committee was accredited in 1980, and the X12 standard has been evolving ever since. One of the requirements placed on the committee was and is to keep the standard open to interindustry applications. This requirement makes the standard more complex than an industry-specific standard, but the advantages easily overcome the disadvantage of complexity.

With a single standard, a business has multiple functionality and only has to use one standard for each business function.

EDIFACT

The International Standards Organization (ISO), an organization within the United Nations, has developed the EDI standard that is used in Europe. The Electronic Document Interchange for Administration, Commerce, and Transportation (EDIFACT) is the UN standard that the whole world has agreed to eventually adopt. The actual implementation of EDIFACT within the U.S. has been moving at a snail's pace. The standard appears to currently be taking the same route that metric standards have taken. Everyone agrees that EDIFACT is the international standard, but tried and true X12 standards are not abandoned in favor of EDIFACT.

Other document standards

Other document standards are in existence, most notably HL7, which is used by the hospital systems and is ANSI approved.

References


Bort, R., and Bielfeldt, G. R. Handbook of EDI. Boston, Massachusetts: Warren, Gorham and Lamont.
Canis, R. J., Value-added networks: What to look for now and in the future. Conference Proceedings EDI 2000: EDI, Electronic Commerce, and You; (pp. 141-157).
Kimberley, P. (1991). EDI. New York: McGraw-Hill.
Sawabini, S. (1995). Introduction to EDI. Conference Proceedings EDI 2000: EDI, EC, and You, (pp. 1-36).
Sokol, P. K. (1995). From EDI to EC: A Business Initiative. New York: McGraw-Hill.