1. Introduction To EDI - What is EDI? - EDI History - EDI Benefits
- EDI Status
- EDI System Approach
- Migration to Open EDI
Jerry Gao, Ph.D

2. - What is EDI?
EDI - the inter-organization exchange of well-defined business transactions in standardized electronic form directly between computer applications.
Style: Business-To-Business
EDI - provides a collection of standard message formats to exchange data between organizations’ computers via any electronic service.
EDI covers:
- traditional business facets:
inquires, planning, purchasing, acknowledgments, pricing,
order status, scheduling, test results, shipping and receiving, invoices, payments, and financial and business reporting.
Additional standards:
interchange of data relating to security, administrative data,
trading partner information, specifications, contracts, distribution..
Jerry Gao, Ph.D

3. - What is EDI? EDI’s goals:
- Enable easy and inexpensive communication of structured information
throughout the corporate community.
- Reduce the amount of data capture and transcription.
Applications:
- EDI has been used in a number of specific industry groups:
- automotive, retail, chemical, electronics,
- metals, electronics, electrical, petroleum,
- paper and office product sections.
- The overall penetration of EDI has been relatively limited.
< 1% of potential business in the U.S.A in 1993.
Jerry Gao, Ph.D

4. - What is EDI? The key aspects of EDI are as follows:
-The utilization of an electronic transmission medium (normally a VAN)
rather than the transfer of physical storage media such as paper, magnetic
tapes, and disks.
- Use of structured, formatted messages based upon agreed standards.
- Relatively fast delivery of electronic documents from sender to receiver.
(generally implying receipt within hours or minutes)
- Direct communication between applications (rather than just between
systems)
Jerry Gao, Ph.D

5. EDI Process Architecture
Internal files
Internal files
Purchasing
application
Purchasing
application
Application file
Application file
EDI System C o m u n i c a t C o m u n i c a t
EDI System
Application link
Application link
Fixed-length
file
Fixed-length
file
EDI
standard
file
Translator
Translator
Jerry Gao, Ph.D

6. EDI VAN Transaction TO/FROM all trading partners & VAN control reports
Mailbox
Transaction files for
all trading partners
PARTNER 1
Trading
Company
Mailbox
TRADING
COMPANY
Protocol
Partner 2
Mailbox
PARTNER 2
Transaction files FROM
all trading partners &
VAN control reports
Partner 3
Mailbox
PARTNER 3
Jerry Gao, Ph.D

7. - EDI’s Benefits: - Automating existing business procedures in
- inventory management, transport and distribution
- administration, and cash management
- Cost saving in
- document preparation, postage, and handling
of mainstream transactions
- reduced errors and exceptions handling
- dispatch of applications for approval by a regulatory authority
or other reporting function
- Faster handling of transactions results in increased cash flow.
- Improve customer services
- Enhance the business process and operations
Jerry Gao, Ph.D

8. - EDI History: - Electronic transmission started during 1960s.
- Initially in the road and rail transport industries.
- In 1968, the United States Transportation Data Coordinating Committee (TDCC) was formed to coordinate the development of translation rules among existing four sets of industry-specific standards.
- Later, the X12 standards of the American National Standards Institute (ANSI) gradually extended and replaced those created by the TDCC.
- At the same time, the U.K. Department of Customer s and Excise was developing stands for documents used in international trade. These extended by the United Nations Economic Commission for Europe (UNECE) as GTDI (General-purpose Trade Data Interchange)
- A United Nations Joint European and North American working party
(UN-JEDI) addressed the harmonization between the two sets of standardized documents. They developed EDI for administration, Commerce, and Transport (EIFACT) document translation standards.
- Today, EDI messages are coded in a standard data format based on X12 and EDIFACT specifications.
Jerry Gao, Ph.D

9. - EDI’s Status: - EDI technology have matured.
- EDI has been growing in the past, although the penetration is still low.
- In spite of its moderate success, EDI has failed to gain total acceptance and become ubiquitous in industry.
- Although EDI technology works well, until now this technology has been relatively expansive to implement.
Year Companies using EDI Penetration (against 5 million potential)(%)
1987 1,
1989 5, , , , , ,
Jerry Gao, Ph.D

10. - EDI Roll-out Cost: - EDI Roll-out cost facts:
- Reaching a legal agreement between the parties regarding responsibilities and dispute settlement. (This may involve expensive lawyers)
- Building and installing the EDI system
- Modifying and interfacing with the existing computer system
- Obtaining network services
- Testing and installation cost
- Reengineering internal processes with the goal of taking full advantages of the technology.
- Training cost
Jerry Gao, Ph.D

11. - EDI System Approach: There are several ways to set up EDI.
- A dedicated PC link to the EDI network.
- A group of computers via modems linking to the EDI network
- A dedicated server link to the EDI network
Communication link could be:
- dial-up phone line (such as ISDN line or switched digital services)
- a dedicated link to the network’s local hub point.
Required software:
- Application software
- Message translator
- Routing manager
- Communication handler
Jerry Gao, Ph.D

12. - Migration to Open EDI:
The Internet and the transition to Open EDI will change the economics of EDI
by reducing setup and rollout costs.
Migration groups:
- A nonuser becoming a private network/VAN user.
- A current EDI user who wishes to make a transition to Open EDI.
- A non-EDI user who can make a direct transition to Open EDI.
- EDI transactions across the Internet in two ways:
and FTP
The benefits:
- Reduction of the cost of transferring EDI messages
- Increase the performance
- Supporting E-Commerce
- Increase the interoperability of networks increasing the usability of EDI.
The problems and challenges:
- Security issues
- Many companies using EDI based on VANs. Not all VANs have connections to Internet.
Jerry Gao, Ph.D