Understanding Electronic Data Interchange

1. Article2: Datatrans-inc.com Understanding Electronic Data Interchange In the world of manufacturing industry, warehouses, shipping, construction, banking, food processing, petroleum, health care, governmental, retailing, insurance, textile and such other major industries often the word EDI specialist moves from mouth to mouth. One may wonder; what is electronic data interchange (EDI). In this article let us try to understand electronic data interchange from the layman’s point of view. Probably if the word ecommerce is mentioned many would nod in agreement. Simply put, it is an exchange of information regarding services, money and goods for trading purposes from one computer to the other. Let us mention few examples for the sake of ease in understanding. Payment of bills online, tracking the package delivery, electronic receipt of paycheck, online purchasing and the likes are the examples of ecommerce. Now when the task is to handle the transactions of a company, which may often run into thousands, there has to be some improved version of the software in order to tackle the issues. That is where EDI Software comes in. So what is EDI software? It comes into play for handling huge transactions of the major industries mentioned above. Then what is +edi software? 1.It has to be an agreed message standard 2.It shall exchange information from computer to computer 3.It shall work with minimal intervention of humans Today 95% of all ecommerce activities are performed through an EDI provider. This is accomplished with the help of special software through the Internet, using email or using any customized connection. The scope of electronic data exchange is quite huge such as getting inventory information of customers’ as well as suppliers’ warehouses, receiving status of order, electronic fund transfers along with the automatic notification to the person concerned about the payment of the invoice and many more such electronic transactions. Let us slightly probe into the history of the electronic data interchange. In 1850 in USA business information was communicated using telegraph between Railroad and Western Union. It can be considered as the birth of EDI. The advent of computer technologies during the early sixty’s made it possible for the industries to store as well as process huge data electronically. This gave them the impetus to find a faster method of communication of the data, using electronic methods. Computer telecommunication

2. Article2: Datatrans-inc.com technology came as the savior. The electronic data exchange was made possible using telephone lines and the data could be transferred directly into the business application of the partner in business. Need was felt for a standard data format. In the course of time Electronic Data Interchange Association (EDIA) was formed in 1970 as an administrator for coordinating among the various industries. In 1979 American National Standard Institute was formed. In course Value Added Network (VAN) worked as one electronic post office. VAN did have benefits but due to its prohibitive cost it was not popular among the industries. Finally the present electronic data interchange secure-internet was designed and is being used gainfully by all the industries irrespective of their sizes. The only disadvantage of the present day EDI is that it may reveal the inefficiency of the business practices. If the implementing company had inefficient practices they would multiply after implementing EDI. 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.