Inter Organizational

Commerce and EDI

Electronic Data Interchange (EDI)
 Definition : EDI
 EDI is defined as the inter process
communication (computer application to
computer application) of business information is
a standardized electronic form.
 Historical Practice
 Failing of the paper based system
 How did EDI change things?
 Benefits of EDI
 Vendor Stock Replenishment
 Flip side of EDI
EDI Basics
LAYERED ARCHITECTURE OF EDI

EDI SEMANTIC LAYER APPLICATION LEVEL SERVICES

EDIFACT BUSINESS FORM STANDARDS

EDI STANDARD LAYER
ANSI X12 BUSINESS FORM STANDARDS

EMAIL X.435 MIME

EDI TRANSPORT LAYER POINT TO POINT FTP TELNET

WWW HTTP

PHYSICAL LAYER DIAL UP LINES, INTERNET, IWAY

Interesting Info
 Cisco reportedly ship
45 per cent of their
products "without
being touched by
human hands" save
around $ 550 million
a year as a result of
transferring most of
their business to the
net.
 EDI vs. Email
 Electronic Commerce and EDI
 EDI vs The Internet
 ANSI Accredited Standards Committee
 EDI over the Internet
 http://www.wipro.com/webpages/itservices/eb

 http://www.covalentworks.com/
 VANs and the Internet
 Uses of EDI
 EDI in action

PO
RECEIPT ADVICE ADVANCE SHIP NOTICE
PO
CONFIRMATION
PAYMENT INVOICE
BOOKING REQUEST

BUYER’S SELLER’S
COMPUTER STATUS
BOOKING COMPUTER
CONFIRMATION

TRANSPORT COMPANY
INTERNATIONAL TRADE AND
EDI
 Role of EDI
 Physical aspects of International
trade are
 Movement of goods
 Containers
 Vehicles
 Ships
 And aircrafts
INTERNATIONAL TRADE AND
EDI
 Statistics show
 Minimum 12 participants
 Cost of voluminous paperwork,
 complex formalities
 associated delays and errors amount to about 10%
of the final value of goods
 Typical International trade transaction involves
around
 30 different parties
 60 original documents
 360 document copies (verification, transmission,
re-key)
 EDI benefits
Some major VAN operators’
worldwide are

 AT&T
 IBM
 GEIS
EDI in India - Chennai Customs
 The Requirement
 New network infrastructure
connecting 23 locations in India
 24*7 operations with High
availability as a mission critical
operation for Servers, Application
and Leased Line
http://www.chennaicustoms.gov.in/ed
EDI in India - Chennai Customs
 The Implementer
 Wipro managed a complete end-to-end
project involving
 hardware supply
 system integration
 Networking
 application development
 application integration
 24*7 sustenance
 and helpdesk support
 security implementation
 enterprise management through tight
program management methodologies.
EDI in India - Customs
Vishakapatinam
 http://vizagcustoms.nic.in/edi.htm
 Introduced in October 1998
 To facilitate faster clearance of
Imports and Exports
 Software modules developed by the
NIC
EDI in India
 http://archives.nic.in/edifact/hpage.html

 http://www.gs1india.org/SERV/awarness.
FINANCIAL EDI
 INTRO
 Types of Financial EDI
 Bank Checks
 Inter bank Electronic Funds Transfer
 Automated Clearing house (ACH) transfers
http://www.icicibank.com/pfsuser/icicibank/ibank-nri/nri
 Credit Transfers
 Debit Transfers
 Rapid Growth of ACH in B2B
How Financial EDI Payments are
made
 PAYMENT AND REMITTANCE
INFORMATION FLOWING TOGETHER
 How Financial EDI Payments are
made
 PAYMENT AND REMITTANCE
INFORMATION FLOWING TOGETHER
Goods or services bought

Company X Company Y
Bank X Bank Y
(Payer) (payee)
Remittance Remittance
Information Information
Transfer of
Funds

ClearingHouse
 How Financial EDI Payments are
made
 PAYMENT AND REMITTANCE
INFORMATION FLOWING SEPARATELY

Remittance Information Remittance Information

VAN

Company X Company Y
Bank X Bank Y
(Payer) (payee)
Payment Payment
Authorization Settlement
Transfer of Notice
Funds

ClearingHouse
VANS
 A VAN is a
communications
network that typically
exchanges EDI
messages among
trading partners.
 Other services provided
are
 holding messages in
“electronic mailboxes”
 interacting with other
VANs
 supporting many
telecommunications
modes and transfer
protocols
EDI Services in India
 VSNL
 has established the GEDIS TradeNET
Network service for EDI.
 It is connected to two international
EDI VAN operators, GEIS and INS UK
 National Informatics Centre (NIC)
 Nationwide computer
communication network
 Over 600 nodes connecting the
national capital, the state capitals
and district headquarters
EDI Services in India
 Satyam Infoway
 Had existing VAN based EDI
 Introduced Web EDI solution based
on Sterling product GENTRAN (1999)
 Their customers
 Rane Brakes, Henkel, Du Pont,
Whirlpool, Osram, Birla 3M …
 Functions of a third party VAN
Transport
Company
Company

Translate Performs
Incoming Compliance
Documents Checking

Route to Format translation

mailbox ID of (X.12=> EDIFACT)

Third-Party Value Added

Network (VAN)
Financial Manufacturing
Institution Company
VANs contd…
 Disadvantage of EDI enabling VANs
 Choosing Alternatives to VAN
 Who are the good candidates for
VAN?
 Decision making process in VAN
selection
 Conclusion
EDI Services in India
 Satyam Infoway
 “Henkel, has implemented an EDI solution
to move critical data from its various
carrying and forwarding agents to the head
office at Chennai on a daily basis. Earlier,
this was done only on a monthly basis and
data was sent through floppies. "The
company was finding it very difficult to
forecast their production and logistic
demands accurately," says P R Sridhar,
product manager at Satyam, which
executed the project.
EDI in India: Vysya Bank
 Vysya Bank
 VysyAmulya, online centralised banking project
 http://www.ingvysyabank.com/scripts/retailbanking

 Goal
 Providing anytime anyhow anywhere banking with
online, centralised processing and local empowerment
 Five provider companies who jointly put the project
in place
 These are Sanchez, a software solution provider
 AT Kearney, project manager
 Eicher Consultancy Services Ltd, HR consultant;
 IBM India Ltd, data centre hardware, system integration
services, branch roll-out and data centre;
 and Bangalore Labs Pvt Ltd, network consultants.
EDI in India: Vysya Bank
 Implementing payment gateways for
B2C and B2B e-commerce.
 MasterCard International
 Global Tele-Systems Ltd
Career Prospects in EDI
 Marketing professional for selling EDI
software and solutions to prospective firms.
 Programmer for developing EDI software
 EDI coordinator in companies for
interacting with the trading partners
 EDI professionals working with VAN
providers in software as well as hardware
operation and maintenance.
Career Prospects in EDI
 Career as
 Project leader/manager
 Service engineer
 Communication engineer
 Security coordinator for developing and
maintaining communication infrastructure.
 The EDI coordinators usually work in firms
for searching trading partners and to
resolve various commercial/legal issues
Career Prospects in EDI
 Experienced EDI professionals can
also work as
 consultants for firms or government
bodies for providing and implementing
user specific EDI packages.
 Other related fields where career
exits in abundance are
 Electronic Insurance Claims (ECS)
 or Electronic Statement Printing (ESP).
Essential Skill needed
 Strong knowledge of the prevalent
business practices
 Awareness of tax and duty structure
 Good communication skills to help
translate user requirement into task
specific software
Essential Skill needed
 Understanding of
 manufacturing organisations
 customer service
 Billing
 payments and shipping procedures.
 Technically, they should be aware of
 databases,
 programming languages.

 Sample : Job Profile of EDI analyst or

project manager.
 Proficient in designing and integrating data
 establish trading protocols
 and rectify technical problems.
Qualification required for EDI
professional
 The qualification required for working, as
EDI professional may be electronic or
computer engineering and MCA.
 Those with MBA, commerce or economics
background with proficiency in
programming can also find opportunity in
working for the EDI applications.
 However, depending upon the industry or
application, one has to become conversant
with various EDI standards and software.
Institutions that offer courses

AIMA (All-India Management Association) and
IGNOU, are offering learning and advanced
courses on the EDI.
 National Informatics Centre (NIC) :
 technical and software-related supports to the users
for developing and implementing the EDI.
 Seminars or workshops are held regularly by
export and government organisations,
highlighting the importance of the EDI in
respective sectors
Institutions that offer courses
 NICNET provided by NIC
 GEDIS provided by VSNL.
 Satyam Infoway has also introduced
EDI package called Gentran, for
mapping, tracking, and communication
between various operating systems.
 http://ediacademy.com/
 http://www.edi-center.com/
 http://www.edi-blog.com/
EDI in Other Fields
 Health Care and Insurance EDI
CASE STUDY : Sahara Life Insurance
 The company
Sahara Life Insurance is Sahara India
Parivar's venture. Launched with an
initial paid-up capital of Rs 157 crore
 http://www.saharalife.com/
 The need:
 To cut down on Paper Work in the company
 To cut down processing time
 To record every incoming paper from policy
holders
CASE STUDY : Sahara Life Insurance
 Requirements:
 Automate document validation and
workflow throughout the
organisation
 Vendor had to provide the right
solution in a short period of time
 Implementer
 Newgen Software Technologies
 Three Part Solution
 OmniCapture for scanning documents,
 OmniDocs for document management, and
 OmniFlow to manage automated workflow
CASE STUDY : Sahara Life Insurance
 The benefits
Processing time of a policy down
to three days instead of the 15
days through traditional methods.
 Manufacturing/ Retail
Procurement Using EDI
 Just In Time and EDI
 Retail Procurement using EDI
 Quick Response and EDI
RETAIL EDI WEBSITES
 Global players
 http://www.ecediinc.com/edi-industries/retail-edi.h
 http://www.icc.net/en_US/oc/icc.net/Software/Per
 http://www.123edi.com/edi-retail.asp
 http://www.edi-center.com/index.html
 Job Offers : Abroad
 http://www.fibre2fashion.com/jobs/jobdata.aspx?jo
 Job Offers : India
 http://india.recruit.net/search-edi%2520specialist%
EDI IMPLEMENTATION
 Agreement between a company and
trading partner
 EDI standard is decided
 Information to be exchanged
 Network Carrier (VAN)
 Mode of Information transmission
EDI IMPLEMENTATION
 Basic kit necessary for EDI implementation
 Common EDI standards
 http://www.blueprint-ec.co.uk/index.htm
 Translation Software
 Trading partners
 Banks
 EDI VANs
 Proprietary hardware and networking
Comparison of EDIFACT and
X.12 Standards
EDIFACT X.12

Segments allow element generic or Each element should have a

multiuse elements such as date. A specific name such as order
qualifier, such as order or invoice, date, invoice date…
accompanies the generic element
identifying what the date relates to
Fewer data elements and segments and
only one beginning segment (header) , but
it has more composites

Easy to update – so trading partners

often use different versions of the
standard (problem)
 Comparison of EDIFACT and X.12
Standards
EDIFACT X.12

Example. <iq type='set' id='ANY'

UNB+UNOA:1+US::US+50138::THEM+960531:0305+001934+ to='ANSI_X12Gate@way.com'> <query
+ORDERS' xmlns='http://jabber.org/protocol/ansi_x.
UNH+1+ORDERS:91:2:UN' 12'> ST*850*000000101~
BGM+220+A761902+4:19960530:102+9' BEG*00*NE*123456789*991125**AC~
RFF+CT:EUA01349' N1*BT***0111213~ N1*ST***5566789~
RFF+AAV::C'
TXT+THIS IS WHAT AN EDI MESSAGE WOULD LOOK LIKE... '
PO1*1*250*KGM*15.3*SR*EAN*MY1001
NAD+BY++OUR NAME PLC::::+++++EW4 34J'
~ CTT*1*2~ SE*7*000000101~
CTA+PD'
COM+01752 253939:TE+01752 253939:FX+0:TL' </query></iq>
CTA+OC+:A.SURNAME'
COM+2407:EX'
CTA+TI+:B.BROWN'
COM+0:EX'
CTA+SU'
COM+0161 429 7476:TE+01752 670633:FX'
UNT+15+1'
UNZ+1+001934'
Example Message - Segment tags are shown in bold e.g. UNB
Note: Data elements that could identify the participants have been
changed, although the text is based on a live transmission.
EDI Software Implementation
 EDI software has four layers
 Business application
 Internal Format Conversion
 EDI translator
 EDI communications layer
 Three main types of EDI access methods
are available
 Direct dial or modem to modem
connection
 limited third party valued added
network services
 full thirdparty VANs
EDI Software Implementation
 Advantage of using EDI VAN
 EDI Implementation cost
 http://www.msc-inc.net/Documents/ED
INTERNET BASED EDI
 Several factors make the Internet
useful for EDI
 Flat pricing
 Cheap access
 Common mail standards
 Security
MIME
 Multipurpose Internet Mail
Extension
 Why MIME?
 How MIME helps?
 MIME Advantages and
Disadvantages
EDI’s Legal Status