Research paper study over the Traditional EDI to Web EDI

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MIT(E) College of Engineering, Aurangabad.
Study over the Traditional EDI To WEB EDI.
Ankur A Wani Vaibhav S Yadav
Ankurw07@gmail.com Vaibhav.yadav5868@gmail.com
Under the Guidance: Dr.M.H.Kondekar
Abstract
This brief paper serves to better
introduce the membership of the
Internet Society to the concepts of
electronic data interchange (EDI) and
the effects traditional EDI has had on
those businesses using the technology.
Electronic data interchange
(EDI) is an information technology
that standardizes the exchange of
information between transacting
parties. Using data from a major U.S.
office furniture manufacturer who
adopted EDI primarily to improve the
efficiency of accounting transactions,
we evaluate whether EDI reduces order
processing time (the time from sales
order receipt to sales order scheduling)
and whether this improvement is
greater for more complex orders. Our
measure of complexity reflects both
the mix of different products the dealer
orders as well as features and options
the dealer selects for each product in
the order. We find that EDI is
associated with faster order processing
independent of complexity, and that
EDI mitigates most of the negative
effects of complexity on processing
time. We also find that dealers learn to
submit error-free orders to the
manufacturer, and that previous errors
provide feedback that helps dealers
submit more accurate orders. However,
we find only incomplete evidence that
order complexity impedes learning.
Introduction
Traditional electronic data
interchange (EDI) has been evolving
for approximately 25 years and has
truly become the paperless
environment that is so often talked
about. EDI is a complicated mixture of
three disciplines: business, data
processing, and data communications.
This paper examines the concepts from
the perspectives of each discipline.
Over the last ten years,
Electronic Data Interchange (EDI) has
impacted the way business is
conducted between organizations. The
long-established manual
implementation of paper-pencil
procedures for many of its day-to-day
operations has been computerized into
a paperless form of magnetic data
storage and transmission. When a
company mandates the purchase of
goods or products from another firm, a
long and tedious procedure no longer
has to be carried out. EDI has changed
the entire procedure into an efficient
electronic operation. EDI has
standardized the operation of
performing day-to-day business. Also,
it has been characterized as the
automation of computer-to-computer
exchange of structured business
documents between an enterprise and
its vendors, customers, or other trading
partners (Data Interchange Standards
Association, 1992 & Digital, 1988).
The focal points of EDI have been the
ability to substitute standardized
business forms into electronic defined
forms, and then exchange the data
between the organizations.

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What is EDI?
EDI stands for Electronic Data
Exchange. EDI is an electronic way of
transferring business documents in an
organization internally between its
various departments or externally with
suppliers, customers or any
subsidiaries etc. In EDI, paper
documents are replaced with electronic
documents like word documents,
spreadsheets etc.
There are two types of EDI
1) Traditional EDI & 2) Web-based
EDI
What is Traditional EDI?
One of the more commonly
accepted definitions of Electronic Data
Interchange, or EDI, has been "the
computer-to-computer transfer of
information in a structured, pre-
determined format." Traditionally, the
focus of EDI activity has been on the
replacement of pre-defined business
forms, such as purchase orders and
invoices, with similarly defined
electronic forms.
Traditional EDI Documents
Following are few important
documents used in EDI:
 Invoices
 Purchase orders
 Shipping Requests
 Acknowledgement
 Business Correspondence
letters
 Financial information letters
What is web EDI System
While Web EDI is becoming
very popular, the most popular means
of exchanging EDI data is not Web
EDI but rather the Value Added
Network or VAN. This is primarily
due to the extra services that VANs
typically bundle with basic capabilities
that are not always available through
Web EDI. Unlike Web EDI, when EDI
communication takes place with a
VAN, a bisync modem is often used to
establish communication through the
VAN. Another non Web EDI option
for corresponding electronically
between organizations is through direct
modem to modem linkage. A final non
Web EDI approach is to transmit
through the use of a Bulletin Board
System (BBS) which is based on user
connection/login to a remote system.
Steps in an Web EDI System
Following are the steps in an EDI
System.
 A program generates the file
which contains the processed
document.

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 The document is converted into
an agreed standard format.
 The file containing the
document is send electronically
on network.
 The trading partner receives the
file.
 An acknowledgement
document is generated and sent
to the originating organization.
Advantages of an Traditional
EDI System to Web EDI
Following are the advantages of an
EDI System.
 Reduction in data entry
errors. − Chances of errors are
much less being use of
computer in data entry.
 Shorter processing life cycle −
As orders can be processed as
soon as they are entered into
the system. This reduced the
processing time of the transfer
documents.
 Electronic form of data − It is
quite easy to transfer or share
data being in electronic format.
 Reduction in paperwork − As
lot of paper documents are
replaced with electronic
documents there is huge
reduction in paperwork.
 Cost Effective − As time is
saved and orders are processed
very effectively, EDI proves to
be highly cost effective.
 Standard Means of
communication − EDI
enforces standards on the
content of data and its format
which leads to clearer
communication.
A common business process is
the exchange of purchase
orders and invoices. So, let’s
compare how this is done using
Traditional EDI or Web EDI.
In the paper-based method, the
following process:
 The inventory system
automatically notifies the buyer
to place an order, or, after
querying the inventory system,
the buyer determines that an
order needs to be created
 The buyer enters data onto the
screen of a purchasing system
to create the PO, prints and
mails it
 After several days, the vendor
receives the PO and manually
enters it into the sales order
system
 The vendor prints an invoice
and encloses it with the
shipment and/or sends it
separately by mail
 The buyer manually enters the
invoice into the Accounts
Payable system
 The exchange of paper
documents can add a week to
the process. If there are errors
caused by manual data entry,
the time can be greatly
increased.
Now compare that with the
Web EDI process:
 The buyer’s procurement
system, which utilizes EDI
software, automatically
generates and sends an EDI-
formatted PO when inventory
reaches the critical level
 Within minutes the vendor’s
sales order system, utilizing
EDI software, receives the EDI
PO, notifies the shipping
department to ship the goods
and generates an EDI invoice to
be transmitted directly to the

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buyer’s accounts payable
system
Security of web EDI over the
traditional EDI
One of the major roles that is
provided by the data communications
technology is the ability to apply
security to EDI transactions so that the
transactions will not be tampered with
or observed, depending on the level of
security needed
Traditional VS web EDI
system
Conclusion
The time required to process
purchase orders for customers can be
greatly improved by moving from
traditional EDI to Web EDI. Also,
many cost factors will be reduced in
migrating to a more sophisticated
technological type of system.
However, in an Internet setting, EDI
security must be the primary concern
of the business partners. The main
goals of EDI will be thwarted, if
hackers have the opportunity to corrupt
the data stored in computer systems.
As a result, the influence of EDI risks
and its impact on trust is imperative
when considering the business
continuity of EDI organizations. If the
Internet cannot provide the integrity of
traditional EDI, then, the only solution
in the future may result in reverting
back to the older model.

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References:
1. turban-appendix5a(From
internet PDF file)
2. Edward Cannon, “EDI Guide:
A Step By Step Approach”,
International Thomson
Computer Press, 1996
3. http://www.edibasics.com/
4. Data Interchange Standards
Association, 1992, ASC X12
Standards Activities - Quick
Summary, Alexandria, VA.:
Data Interchange Standards
Association, Inc.
5. Digital, 1988, Electronic Data
Interchange: An Executive
Summary, Merrimack, NH.:
Digital Equipment Corporation,
Inc.

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