• What is the difference between EDI and Electronic Commerce?
• Why should I use EDI?
• With the growth of Internet technologies, do I still need EDI?
• Isn't EDI only for the larger companies?
• What business information can be exchanged via EDI?
• What is an EDI Standard and why do I need one?
• Do I have to use an EDI Standard? If so which one should I use?
• What network should I use and do I have to use the same one as my trading partner?
• How do I get the business data out of my application and into the EDI software?
• Are my EDI messages legally binding?
• What things do I need to consider when choosing my EDI-enabling software?
• Can EDI only be exchanged via a Value Added Network?
• Do all my trading partners have to use the same Standard?
• Do all my trading partners have to use the same network?

What is the difference between EDI and Electronic Commerce?

Electronic commerce is a broad term often used to describe any form of business information exchanged electronically. EDI stands for Electronic Data Interchange. EDI is specifically the electronic exchange of structured business documents between different computer applications across enterprise boundaries. EDI is one aspect of electronic commerce technology.

Why should I use EDI?

EDI increases the overall efficiency of your business operations. The true benefits of EDI reveal themselves through increased productivity, reduced errors caused by the re-keying of information and considerable cost savings. As the transactional cycle becomes faster and more efficient, your organisation will reap the benefits from competitive advantage, improved customer service and tighter trading relationships.

With the growth of Internet technologies, do I still need EDI?

Yes. EDI will continue as the most efficient way of exchanging structured information directly between business applications without human intervention.

Isn't EDI only for the larger companies?

EDI is a cost-effective solution for companies of all sizes. If you rely on the business of a few customers where your exchanges are of high volume, there are considerable cost savings to be made on the transaction process.

What business information can be exchanged via EDI?

EDI enables you to exchange any type of structured business information, catering for all industry sectors, for example:

• Purchase Orders
• Invoices
• Delivery forecasts
• Tax Reports
• Insurance Transactions
• Inventory Reports.

What is an EDI Standard and why do I need one?

EDI is efficient because it adopts a standardised format for a document, so the content can be readily understood and processed by you and your trading partners' computer systems. The development of standard data formats for business documents has occurred in response to needs expressed at industry level and at national level. This has led to the existence of certain EDI Standards that reflect the trading needs and practices of particular industries and for particular countries. The main EDI Standard in use world-wide is EDIFACT; there are other specific standards for different industries and countries.

All EDI Standards bodies publish definitions of the documents which may be exchanged electronically. The documents are known as EDI Messages and the definitions specify the content included within them.

Do I have to use an EDI Standard? If so, which one should I use?

The process would break down if trading partners did not adhere to the recognised EDI Standards. The Standard that you use depends on what has been agreed between you and your trading partner and is often influenced by your industry sector. Certain Standards and subsets are becoming de facto for different industries. For instance the European Motor industry uses ODETTE.

What network should I use and do I have to use the same one as my trading partner?

Whilst there are various Value Added Networks (VANs) in the market place offering similar services, it is advisable to use the same network as your trading partner. It may be the case that your trading partner will force you to adopt the same network provider. As your EDI project progresses, your other trading partners may have different requirements. Most of the main Value Added Networks do provide the option to bridge between themselves and other VANs.

How do I get the business data out of my application and into the EDI software?

The EDI software reads the data that you want constructed into an EDI message, from an interface database that has been populated by your application. The real benefits of EDI are achieved if your EDI software is able to integrate seamlessly with your internal business applications, thus increasing the efficiency of each process and reducing error, e.g. caused by re-keying data. If your application incorporates batch file processing, then you need to ensure that your EDI software provides the flexibility to read/write data directly from/to these files. However, if no such batch interface exists, your EDI software should provide the ability to read/write directly from/to your application database without the need for costly application re-development.

Are my EDI messages legally binding?

Yes. Most companies use the Trading Partner Agreement to set out the legal and contractual requirements to support the exchange.

What things do I need to consider when choosing my EDI-enabling software?

As you begin to implement EDI across your trading community, the need often arises for you to use more than one EDI Standard. The EDI Standards bodies frequently update their message standards, therefore you should ensure that the software supports multiple standards and that new standards are readily available from your software supplier.

Evaluate the degree of application integration you require. Will the software allow you to totally automate your document exchange?

As the IT industry moves on, the new opportunities available from IT developments will change the way you do business in the future. Does your software supplier keep pace with these new developments? Do they frequently release new versions of the product?

Can EDI only be exchanged via a Value Added Network?

No. EDI can also be exchanged via a direct point-to-point connection or over intranets, extranets, or the Internet itself.

Do all my trading partners have to use the same Standard?

No. EDI enabling software should offer multi-standard and message support, so that all exchanges can be made with all trading partners irrespective of EDI standard.

Do all my trading partners have to use the same network?

No. If one or more of your trading partners do not use the same VAN, then EDI exchanges can still be achieved through bridging from one VAN to another. Talk to your VAN provider about this option.