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What is EDI?
Electronic Data Interchange (EDI) is the computer-to-computer exchange of business data in standard formats. In EDI, information is organized according to a specified format set by both parties, allowing a "hands-off" computer transaction that requires no human intervention or re-keying on either end. All information contained in an EDI transaction set is, for the most part, the same as on a conventionally printed document.
That’s nice…but what does it mean?!?
For someone who knows absolutely nothing about EDI, or at least very little, that’s quite a mouthful. When I first got involved with EDI, I would ask some of my educated business friends, “Do you know what EDI is?” I could tell by their glazed over expression, they had no clue…the most common response I got was, “Nope… I never heard of it. What is it?”
Since I was new at it, I wanted to be precise in my definition, so I gave them the official explanation above. I figured that should be all they needed to know and understand what it was and how it worked. Their response was not uncommon with many people who are reading this for the first time…”O.K. that’s nice but, what is it?
To make it easier for them to understand, I gave them a simple example of how EDI operates in our daily lives. Basically, it functions so quietly, we are not consciously aware of its existence or the impact it has on the business world and commerce in general. I reminded them that they probably had received a package in the mail with all those bar codes and numbers on the shipping labels. They agreed. When I began to tell them that some big distributor or retailer required their suppliers to ship everything with this coded information marked on itin order to comply with EDI standards or they would be left behind in the corporate graveyard.
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Why do companies insist on EDI compliance from their suppliers or customers?
It is simple…they don’t want to enter the information manually…it costs too much money. With EDI they can send out bids, award bids, get advanced shipping notices, receive shipments, enter data into accounting & inventory control systems, receive invoices, pay invoices, run management reports, etc. without re-keying the same data over and over again. When I told my friends this, they knew what EDI was. They even started giving me examples of where they had seen it in action…amazing…I told you, they were smart.
The business person who wants to sell to major companies, governments, or EDI compliant businesses must be ready to comply or be left in the cold wondering how they are going to pay their high labor costs which could have been reduced with a properly designed EDI system.
n Organizations have adopted EDI for the same reasons they have embraced much of today's modern technology-enhanced efficiency and increased profits. EDI offers many benefits to small & medium size businesses.
This web site was created to help you make the right marketing decisions for your business.
1. Who needs EDI? Click here
2. Find out how EDI can benefit your company’s bottom line. Click here
3. How does it work? Click here
4. Web-based EDI system…best for small to medium sized businesses? Click here
5. Know the terminology…check out our glossary Click here
6. FAQs Click here
The EDI standards are developed and maintained by the Accredited Standards Committee (ASC) X12. The standards are designed to work across industry and company boundaries. Changes and updates to the standards are made by consensus, reflecting the needs of the entire base of standards users, rather than those of a single organization or business sector. Today, more than 300,000 organizations use the 300+ EDI transaction sets to conduct business.
What is XML?
XML, or eXtensible Markup Language, is a new high-powered Web language developed for e-business. Unlike HTML that displays text and images now found on Web pages, XML enables the exchange of structured data over the Web.
Uniting EDI with XML provides win-win, affordable and easy-to-use business solutions for all organizations. By enhancing EDI processes, ASC X12 can evolve the current infrastructure into something more universally accessible. XML, with EDI as the foundation, provides ubiquitous connectivity and interoperability. Developing cross-industry XML specifications represents a huge standardization effort that includes:
1. Exchanging transactional data
2. Developing messaging and protocol infrastructure
3. Creating code-value dictionaries
4. Devising trading partner agreements
5. Defining business processes performed in conjunction with business-to-business exchanges
This great integrator, XML, broadens the scope of interest to include such applications as trading partner agreements so that e-business communities and their information supply chains are fully integrated. Any XML-based infrastructure can establish a dynamic trading network instead of a few key connections. By establishing uniform XML standards, organizations can accelerate the introduction of new products and reduce costs.
ASC X12 is working diligently to enhance communications around the world by collaborating on Electronic Business XML (ebXML) initiative-a worldwide effort to develop a common framework for XML business messages. The XML standards proposed by X12, based on over twenty years of rich business semantic development, will be fully compliant with ebXML recommendations.
How will the Internet affect E-Commerce?
Electronic Data Interchange (EDI)-in existence for over 25 years-is the stable component of conducting electronic commerce (EC). During this time, technology has experienced tremendous growth, making EDI an essential tool for businesses in today's global marketplace. Two significant factors will contribute to this continued success: the Internet and evolution in standardization.
The development of X12, the principal standard for e-commerce transactions today, has had a profound impact on the growth of electronic commerce. Organizations using X12 have eliminated interoperability problems by using one common standard. X12 caused enormous expansion in the use of EDI across a multitude of industries.
ASC X12 is working to enable e-commerce to extend beyond Fortune 1000 companies and to the remaining business processes that have yet to be automated, to operate securely on the Internet, and to be accessible to small-to-mid-sized enterprises. Through XML and the ebXML framework, the scope and interoperability of EDI is now being extended. Through implementation of these new EDI formats, e-commerce will continue to grow exponentially
The use of EDI, EDIFACT, XML and ebXML formats, and the Internet will continue to eliminate barriers for e-commerce, such as high cost, trading volume requirements and proprietary software. As a result, more companies and industries are using e-commerce to gain a competitive advantage in today's marketplace.
What is ASC X12?
In 1979, the American National Standards Institute (ANSI) chartered the Accredited Standards Committee (ASC) X12 to develop uniform standards for inter-industry electronic exchange of business transactions-electronic data interchange (EDI).
How are the X12 standards developed?
The members of ASC X12 come together three times each year to develop, maintain and build on uniform standards for EDI, known as X12 standards. This process is open, involves discussion and consensus, and results in ballot, approval and standard registration with ANSI.
What is DISA and how is it involved with the X12 standards?
In 1987, in response to the rapidly growing number of industries employing X12 standards, DISA (Data Interchange Standards Association, Inc.) was chartered by ASC X12 to serve as their Secretariat for the X12 standards development process. DISA publishes, and is the only official source for, X12 standards.
