EDI before and after

EDI implementation before and after the Internet
by Kurt Rodenhizer, MS, MBA, June, 2007

Electronic Data Interchange (EDI) is the computer-to-computer exchange of data transmitted in accordance to some type of standards, from one computer application to another. EDI systems must be created so that the interchange follows both national and international standards. This transfer of business transaction data and typically involves the automated purchase of goods and services.

EDI systems have migrated from expensive proprietary solutions to Internet based, XML services, which has brought the cost down considerably and put the applications in the hands or almost any company interested in the service benefits. Mainly this translates to enhanced business processes, efficiency and B2B exchange.

EDI documents contain the same data that would normally be found in a paper document used for the same organizational function such as a document used for inventory management or warehouse to distributor supplies. EDI is not confined to just business data related to trade however, as it has evolved to include the fields of medicine (patient records, laboratory results), transport, engineering and construction. The article “The evolution of supply chain management software” suggest that EDI has spawned the development of several related applications (and terms) such as enterprise resource planning work ERP systems, warehouse management systems (WMS), and to a lesser extent transportation management systems (TMS).

Significance
Now that EDI systems can be implemented for mid-level companies at price points less than $100,000, there has been an explosion of use and one might suggest it affects the overall domestic and international economy. EDI’s are now designed to interface with new technologies such as radio frequency scanners, e-commerce management plug-ins, portals for online booking and shipment visibility, alerts and customized reports.

Organizations that send or receive documents from each other are referred to as “trading partners” in EDI terminology and the number of partnerships has enabled thousands of new companies to be created or to flourish. Service providers provide global platforms to connect and integrate “business partners” around the world. These providers will track documents and help to reduce errors and improve supply chain performance. In the field of medicine, EDI can be used to generate electronic prescriptions which reduce error and ensure accountability, ultimately saving lives.

One of the most notable benefits to using EDI is the time-saving capability it provides. By eliminating the process of distributing hard copies of information easy access to electronic data simplifies inter-department communication (not to mention saving trees). Another time-savings advantage is the ability to track the origin of all information therefore significantly reducing time spent on corresponding with the source of the information.

References
The evolution of supply chain management software. Logistics Management, 41(9), pp.66-70. [3] Bergert S, Kazimer-Shockley K. (2001).