Electronic Data Interchange (EDI) was a standard for exchanging business documents electronically between companies. While EDI is still used, it is being replaced by XML. EDI aimed to make document formats uniform and exchanges easier by taking care of mismatches between documents. It allowed the electronic exchange of documents like purchase orders and invoices, bringing benefits like speed, accuracy, and reduced paperwork compared to traditional methods. EDI started in the 1960s and was mainly used by large organizations but is now being supplemented by internet transactions.

1. Electronic Data Interchange (EDI) Atul Kahate [email_address]

2. EDI and XML XML is a data description language It has its roots in EDI EDI technology is still in use, but is being replaced with XML

3. What is EDI? Electronic Data Interchange (EDI) Related to the history of XML Document exchange standard e.g. Purchase Order (PO), Sales Order (SO) Documents are inter-related But their formats differ! Aims at: Making formats uniform Document exchanges easier

4. EDI Example Company A wants to buy spare parts from company B Company A prepares a Purchase Order (PO) Sends it to company B Company B sends the goods, and a Sales Order (SO) to B Formats of the SO and the PO differ

5. EDI’s Role Take care of all such mismatches Make document exchange easier Make it electronic Hence the name Electronic Data Interchange (EDI)

6. EDI Definition Exchange of business documents such as Purchase Orders (PO), Invoices, etc in an electronic format

7. EDI Characteristics Happens electronically (like emails) Little or no manual intervention Very fast and accurate Little or no clumsy paperwork

8. EDI Usage Started in the 1960s Used mainly by very large organizations Doing business with suppliers/customers Slowly getting replaced by transactions over the Internet

9. EDI History Has roots in another innovation 1964, Sales Manager at American Hospital Supply Company (AHSC) Developed a system for its customers (i.e. hospitals) Use of punched cards for placing orders

10. Value Added Network (VAN) Private Networks Communications layer over the basic network infrastructure Similar to how all parties communicating using emails would need SMTP

11. VAN Provider Similar to an Internet Service Provider (ISP) Provides VAN Maintains mailboxes for all the EDI users Stores and forwards messages between EDI users

12. EDI Architecture Diagram Business Software at Sender’s end Standard EDI format Translate Value Added Network (VAN) Store and forward Standard EDI format Store and forward Business Software at Receiver’s end Translate

13. VAN Approaches Third-party Preferred method More costly In-house Complicated May be cheaper

14. EDI Types No EDI Partially Integrated EDI Fully Integrated EDI

15. Sample EDI Document Interchange Control Header – Electronic Envelope Functional Group Header – Purchase Order Transaction Set Header – Purchase Order A100 Data Segment Header – Source Data Element – Terms of Transaction Data Element – Date and Time Data Segment Header – Details Data Element – Item Number Data Element – Item Description Data Element – Item Quantity Data Element – Item Price Transaction Set Footer – Purchase Order A100 Functional Group Footer – Purchase Order … … Interchange Control Header – Electronic Envelope

16. EDI Data Formats Decided by ANSI ANSI ASC X12 in North America EDIFACT in Europe Efforts are on to merge the two

17. EDI Advantages Reduced lead-time Reduction in number of errors Reduction in processing costs overall Availability of information at all times Planning becomes easier Long-term relationships between trading partners

18. EDI Drawbacks Very high initial costs Barrier to entry Not using EDI is also a problem Technologically non-savvy companies cannot use EDI with ease

19. Emerging Trends Use of EDI over the Internet Allows smaller players to use EDI Substantial reduction in costs Use of XML

20. EDI and the Internet Web browser XML EDI VAN Provider ASC X12

21. Thank you! Any Questions?