Prestige Institute Of Management & ResearchPresentation On-Inter-Organization Management: EDI Application inBusiness, Standardization and EDI, EDI Software Implementation.Guided By:-Prof. Rajeev BhatnagarSubmitted By:-Aakash GuptaAnkur ThakurSajal JainSangam Nagar
An inter-organization management is one which allows the flow ofinformation to be automated between organizations in order toreach a desired supply chain management system, which enablesthe development of competitive organizations.This type of management system helps in better management ofthe buyer-supplier relationships by implying the full depths oftasks associated with business processes company-wide. In doingthese activities, an organization is able to increase the productivityautomatically; therefore, optimizing communication within alllevels of an organization as well as between the organization andthe supplier. For example,each t-shirt that is sold in a retail store is automaticallycommunicated to the supplier who will, ship more t-shirts to theretailer of the similar kind.Inter-Organization Management
Electronic Data Interchange (EDI)Electronic data interchange (EDI) is a method for transferring databetween different computer systems or computer networks. It iscommonly used by big companies for e-commerce purposes, suchas sending orders to warehouses or tracking their order. It is morethan mere e-mail; for instance, organizations might replace bills oflanding and bills of payment with appropriate EDI messages. Italso refers specifically to a family of standards.The National Institute of Standards and Technology defined EDI as“the computer-to-computer interchange of strictly formattedmessages that represent documents other than monetaryinstruments. EDI implies a sequence of messages between twoparties, either of whom may serve as originator or recipient.”
Uses of EDI•Manufacturing•Shipping•Warehousing•Pharmaceuticals•Construction•Petroleum•Banking•Insurance•Health Care SectorEDI was first used in the transportation industry more thantwenty years ago by air and rail carriers, shippers and freightforwarders.EDI is mainly used in:-
EDI Application in BusinessEDI is a standard used for all business documents, like PurchaseOrders, Ship Notice, Ship Manifest, Invoices and Freight Bills. EDIstandards are used by companies that wants to conform to standardway of transacting business documents.Exchanging business documents via EDI is a fairly simple concept.Outbound data is formatted according to a set of standards andtransmitted electronically. Inbound data may be converted back to aformat internal systems can understand and integrated directly intoERP, accounting or other back-end business applications.Cutting costs, enhancing trading partner relationships, streamliningoperation. All of these improvements are the goals of virtually everybusiness. That’s why so many industries have adopted the use of EDIas a standard business practice.
Different businesses have different requirements for EDI, and a may havedifferent practices in how EDI is implemented. These may include:Business practices – different industries often take different approaches todoing business, with different issues that must be addressed. All must beaccommodated with EDI.Data – every industry uses different forms and other documents that have tobe adapted to EDI documents.Standards – different parts of the world may use ANSI X12 standards vs.EDIFACT, and different industries may have a specific sub-set of thestandards, such as HIPAA 5010 for healthcare.Communications – different industries have adopted different protocols forcommunicating via EDI, whether it’s HTTP, FTP, AS2, or another approach.Formats – EDI can include many formats for documents, which can vary fromindustry to industry, including traditional EDI, XML, CSV, fixed length, andothers.EDI practices – how organizations work together using EDI can differ in eachindustry, such as the practice of charging penalties for non-compliance ofrequirements in retail.
Standardization and EDIEDI provides a technical basis for commercial "conversations" betweentwo entities, either internal or external. EDI standards describe a specificformat of electronic documents.The EDI standards were designed by the implementers, initially in theAutomotive industry, to be independent of communication andsoftware technologies. EDI can be transmitted using any methodologyagreed to by the sender and recipient)The main motive and reason behind the standardization in EDI was toavoid miscommunication and confusion between the sender andrecipient. The growing popularity of EDI brought with itself manyproblems and confusions and standardizing the EDI was the solution tothese problems
The UN-recommended UN/EDIFACT is the only international standardand is predominant outside of North America.The US standard ANSI ASC X12 (X12) is predominant in North America.The TRADACOMS standard developed by the ANA (Article NumberingAssociation now known asGS1) is predominant in the UK retail industry.The ODETTE standard used within the European automotive industry.The GS1 standard in most popular in Indian organizations.Some major sets of EDI standards are:
EDI software implementation is of course a process that is conducted byexperts and mostly by the professionals who provide such software. Thisis a technology that proves to be of benefit to two partner organizationsthat are usually trading partners.The only requirement is that the implementation of the software needsto be done properly. EDI software implementation cannot take placewithout proper commitment as well as leadership from the topmanagement.Again, the aid of experienced consultants is crucial for smoothimplementation and working of such a system.EDI Software Implementation
The EDI software implementation is a process which is detail oriented.There is a lot of collaboration involved and one also needs to go throughmany testing phases along with partners who trade with one and withwhom such data interchange will take place. The advantage of suchsystems is that, once the implementation is done properly, there is arare possibility of such a system breaking down. There are manyconsulting groups who are experts in this field. They will providevaluable consulting services through which clients can decide whichsoftware would suit their needs the most.The benefits of EDI software implementation which is done properly aremany. The errors are reduced and that means fewer chargeback fines topay. There is also considerable efficiency built up since the one does nothave to waste time fixing problems. The processing steps arestreamlined and hence that leads to operation costs considerablylowered, training happens faster and compliance management is alsotaken care of.Edi Software Implementation – What It Involves