Study of EDI
EDI, or Electronic Data Interchange, is the transfer of business documents such as sales invoices, purchase orders, price quotations, etc. ... EDI has been around for approximately 30 years. The true genesis of EDI occurred in the mid-1960s, as an early attempt at implementing the fictional paperless office by companies in transportation, grocery and retail industry segments. Although EDI never eliminated paper documents, it decreased the number of times such documents were handled by people. ... EDI technology is rapidly changing the way business is conducted throughout the world. Firms that use EDI are more efficient and responsive to the needs of customers and partners and in many cases have jumped out ahead of the competition. Many businesses are already using EDI with suppliers and customers, and if your firm wants to do business with companies involved in Government Dealings EDI must be part of your business no later than January 1, 1999. In May of this year, the major industrial groups in charge of standards setting for EDI have united behind a set of standards that will allow for seamless web-based forms using extensible markup language, similar to HTML, thereby increasing the accessibility of EDI for small businesses on the Internet (Campbell, 28). An example of an application for EDI is filing tax returns with the Internal Revenue Service. ... Information, such as purchase orders for medical supplies, flows from the hospitals information system into an EDI station, which consist of a PC, an EDI translator and a modem. ... The Van transfers the formatted information to the vendor, where the vendor side EDI translator converts it to a desired format (Turban, 244). An EDI translator does the conversion of data into standard format. ... The health Industry Business Communication Council estimates that EDI can reduce this cost to $4 per order, potential yearly savings of $840,000 per hospital. ... This includes the purchase of a PC with an EDI translator, a modem, and a link to the mainframe-based information system. ... Benefits of EDI There are numerous benefits associated with the adoption of EDI. ... By utilizing EDI businesses are able to streamline their whole supply chain process. Whether it is upstream to suppliers or downstream to customers, EDI eliminates repetitive tasks such as entering data multiple times and cuts costs of printing hard copies and transportation costs. EDI also allows you to send and receive large amounts of data quickly to or from anywhere in the world. Anywhere that there is access to the Internet there is access to EDI. ... EDI creates a complete paperless Transaction Processing System environment, which saves money and increases efficiency. ... There are other benefits to using EDI - security and validation. Using EDI is secure as long as it is not conducted over the Internet.