EDI (or Electronic Data Interchange) is the interchange of the structured data by agreed message standards, from one computer to another. Read more!
EDI- The “IT” Thing!
EDI (or Electronic Data Interchange) is the interchange of the structured data by agreed message
standards, from one computer to another. It allows routine business transactions between computers.
EDI can bring strategic, operational, and provide opportunity benefits to the organisations which
obviously mean faster processes, reduced cables; improved cash flows et al. Not to mention these
transactions are secure. It seems as though everything is done electronically. Correspondence is
performed through emails businesses communicate with one another by sending forms and bills from
one computer to another. It would be incorrect to say that EDI means simply shooting emails back and
It has come to encompass sending bills, cheques and other important documents with proper
formatting. An exchange from person to person via a USB can also be called as a form of EDI. The biggest
feature of this EDI is that human interaction is when involved when one has to do some proofreading or
error correction. The two parties involved in the process are trading partners. The trading partners are
responsible for conferring with each other about the forms to be sent and the purpose that they serve.
This one of the few occasions on which there is a human interaction involved.
Shipping and billing mistakes are eradicated in the EDI format. The sender’s and receivers’ respective
computers will reconcile any discrepancies, and the process then can continue. The EDI technology not
only reduces costly errors but a great deal of time is saved by eliminating the need for huge amounts of
paper. Since all data and transactions are stored electronically, there is no need for any record keeping
and maintenance. It saves time and money, not to mention the inventory involved. There is no more
pouring over scads of information that could take hours.
EDI continues to prove its major business value by lowering costs, improving speeds, accuracy and
business efficiency. The greatest of the benefits come at the strategic level. Such is the quantum of the
transaction is that they amount to 20 billion per year and are still growing. For buyers, that handle
numerous transactions, using EDI can result in millions of dollars of annual savings due to early payment
discounts. From a financial perspective alone, there are impressive benefits of implementing this
process. Needless to say, it improves transaction speed and visibility while decreasing the amount of
money you can spend on manual processes.
EDI can speed up your business cycle by 61%. Exchanges transactions in minutes instead of days. It
improves data quality, reducing at least 30-40% of the reduction in the transaction errors. It can also
reduce order to cash cycle time by more than 40%, improving business partners transactions and
relationships. Automative paper-based task allows you to concentrate on higher priority tasks and
provides them with tools to be more productive. Quick processing of accurate business documents leads
to less re-working of orders, fewer stock outs and fewer cancelled orders. Shortening the order process
reduction of inventory levels.
ABOUT THE AUTHOR
Gabriel Martin has written many articles and blogs about the EDI, e-commerce and data management
solutions. He recommends DataTrans Solutions, Inc. for providing quality, timely, and accurate EDI and
B2B outsourcing solutions for to its customers.