EDI (Electronic Data Interchange)

Siubmitted By

Hasnain Ali Shah (03)

Noman Aslam (08)

Shahid Iqbal (11)

M.com-III

Submitted to

Sir Mohsin Marten

Department of Commerce

The Islamia University of Bahawalpur

EDI (Electronic Data Interchange)
The letters “EDI” stand for “Electronic Data Interchange”. EDI is the
exchange of electronic documents between businesses, such as a
retailer and its supplier, using a standardised format that allows
different computer systems to communicate with each other.

Electronic data interchange is the concept of businesses electronically

communicating information that was traditionally communicated on
paper, such as purchase orders and invoices. Technical standards for
EDI exist to facilitate parties transacting such instruments without
having to make special arrangements

Examples purchase order ,invoices etc

EDI replaces paper-based documents that were previously sent by post

or fax
with electronic equivalents.

HISTORY
In 1968, the transportation industry recognized that the
abundance of paperwork was beginning to present a problem.
Transportation Data Committee (TDCC),is formed to develop
standard formats for exchanging business information electronically.
In 1978, The American National Standards Institute (ANSI) used the
pioneering work of TDCC to charter a committee known as the ASC
(Accredited Standard Committee) X12
The main objective was to develop uniform standards for inter-
industry electronic interchange of business transactions
In 1983, ANSI published the first five American National Standards
for EDI.
Using X12 standards, users ran into problems when
communicating electronically outside of their national boundaries
In 1988, the United Nations chartered UN/EDIFACT (Electronic Data
Interchange For Administration, Commerce and Trade) to develop
international EDI standards
These standards take the form of United Nations Standard
Messages (UNSMs), which are analogous to what ANSI X12 calls
Transaction Sets
Users involved in EDI will reap various benefits: overseas
expansion, expense control, and the elimination of support for multiple
formats
EDI Software
1) Ready made EDI
2) Custom built

EDI STANDARDS
ANSI X12 is the standard that any industry can use
United Nations/EDI For Administration Commerce and Trade
(UN/EDIFACT) is the standard for international EDI transactions

EDI BENEFITS

Cost Reduction
Manpower, communications, resources, storage
Speed

Electronic transfer Vs mail/ courier

Accuracy
Avoids duplicate data entry and error margin
Security
Information less susceptible to interception/
falsification
System Integration
EDI can be integrated with internal system to push
& pull data
Why do businesses use EDI?
EDI enables the fast, accurate, reliable and automated exchange of
business documents, removing the need for manual paper-based
processes. There are many benefits of EDI for businesses of all sizes,
operating in many sectors including retail, food, logistics, distribution,
construction, manufacturing and many more. EDI is now the standard
way in which most larger
organisations trade with their supply chain partners and, as a result,
suppliers of goods and services are at a real competitive advantage if
they can trade electronically via EDI with their customers. In fact, many
companies insist that their suppliers trade with them via EDI.

Types of EDI
There are two main types of EDI:

Web EDI
Web EDI is perfect for companies that are new to EDI that only need to
trade electronically with one or two customers, exchanging a relatively
low number of documents.
Integrated EDI
Integrated EDI is for those companies that want to take full advantage
of the benefits of EDI by removing manual processes and completely
automating the exchange of business documents.

EDI delivery models

There are two main EDI delivery models:
On-premise EDI
On-premise EDI or in-house EDI as it is also known is a solution that is
hosted locally and maintained by internal IT resources.
Outsourced EDI
Outsourced EDI solutions are hosted by a third party provider meaning
that no costly hardware or software is required.