Presented by

Vinod Kumar Jain

Student, M. Tech (CS by Research)
SCSIT, DAVV, Indore
Conceptual Framework of EDI
Historical Background of EDI
Generations of EDI
EDI Process
EDI Standards
Advantages of EDI
Applications of EDI
Limitations of EDI
EDI System Planning Life Cycle
Analysis of IS Environment
Determination of EDI Opportunities
EDI Issues
Cost/Benefit Analysis
Risk Assessment
EDI Technology Infrastructure Considerations
Development of EDI Implementation Plan
Conclusion
Presentation Overview
Objectives
To study the technological Aspects of EDI
To Propose system Planning for EDI
implementations on the basis of available
literature and case studies.
To study data security and EDI messaging
Security
To Propose best security algorithm for EDI
data Security
Electronic Data Interchange
EDI is the electronic transfer of information between
two trading partners systems using a set of
transactions that have been adopted as a national
or international standard for the particular business
function.

EDI is the computer-to-computer exchange of
standardized business documents, such as
purchase orders, product information and invoices
or EFT.
Historical Development
Developed in 1960's to help organizations to interact more
economically with channel partners.
Reduced time, reduced errors, reduced labor was expected.
In 1968,a small group of shippers and carriers gathered and formed
Transportation Data Coordinating Committee (TDCC ).
In 1979, several Industry groups led by credit research foundation
(CRF ), petitioned the ANSI and formed Accredited Standard
Committee X12 Standards to exchange the information.
In 1987, a world wide accepted UN/EDIFACT standard for
exchanging electronic data was developed.
Less than 5% businesses implemented EDI during 90's.
Even Today, world wide only 12% of the business houses have
implemented EDI.


Generations of EDI
Time Intensive
People Intensive
First Generation
Paper documents were prepared, mailed
through postal system, then opened, sorted
and key punched by the recipient.

This process requires more HR.

Resulting into more errors due to re-keying of
data.

Most of the businesses were telephone
dependent.
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Second Generation
EMAIL
HUMAN
INTERFACE
FAX

Email, Fax and Voice mails were used as
the means of information exchange.

But all of these requires Human Intervention
which leads to inefficiency, error introduction,
loss of time.

Third Generation
MACHINE -TO-MACHINE
INTEGRATED DATA TRANSFER
AUTOMATED BUSINESS CYCLE
Third Generation
Agreement for usage of same data formats
resulted onto a significant reduction in errors
and re-work expenses.

For exchange of data TRANSPORTATION DATA
COORDNATING COMMITTEE (TDCC) was
created and due to early success of this various
other standards like Uniform Communications
Standards (UCS), Warehouse Network
Standards (WNS) were created.


The Transcript Trail with EDI
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EDI
The EDI Process
EDI is a multi-directional, electronic transmission of
information, using standardized formats, and typically
involves the following processes:

The sender creates internal information of a data file for
transmission.

The data file then is entered into a software program
called an EDI translator, which transforms the
message into an EDI standard message, known as an
EDI document.

The EDI Process (cont..)
The resulting document is then transmitted by the
sender to the receiver over the Internet or private
network.
The process is reversed at the receiving end.
The EDI document is inputted into the EDI
translator that translates the data from its current
EDI format into a file that can be assembled or
mapped into the receivers computer system.
It also creates a functional acknowledgment,
which is transmitted back to the sender. A
functional acknowledgment only represents the
receipt of an EDI document.

Computer System
&
Applications
Telecommunication
access - modem
Translation
Software
Interchange
Standards
Value
Added
Networks
Trading
Partners
EDI Standards
There are four major sets of EDI standards:
The UN recommended UN/EDIFACT is the only
international standard and 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 Numbering Association) is predominant in the
UK retail industry.
The ODETTE standard used within the European
automotive industry
Advantages Of EDI
Quick access to Information.
Better customer service.
Reduced paper work.
Better communication.
Increased productivity.
Cost efficiency.
Accurate and improved billing.
Faster order placement.
Reduction in error.
Limitations of EDI
Firms have to incur extra cost for hiring and
training staff.
Needs highly structured protocols.
Added security cost to safe guard confidential
information from unauthorized access.
It does not allows consumers to communicate or
transact with vendors in an easy way.
Applications Of EDI
Companies continually reviews and adds new EDI transactions
based on the business initiatives, market needs and
recommendations from business partners.
Currently, Companies uses EDI for the following business
applications and much more... Administration - product catalogs
and price lists
Sales Analysis - sales and inventory information Purchasing/Order
Management - orders, acknowledgments, order status, and changes
Shipping and Receiving - shipping, notification, proof of delivery,
and customs information Billing - invoicing and statements Payment
Applications - payment remittance
EDI System Planning Life Cycle
Determine Business and Information Needs
Analyze Business Environment
Determine EDI planning Scope and Objectives
Analyze IS environment
Define EDI Targets
Determination of EDI Opportunities
Define EDI Target Application
Define and Select EDI Strategies
Develop EDI Strategies
Develop Implementation Plan




System Planning for EDI Implementations
Analysis of IS Environment

Developing an understanding of Existing IS Environment which includes
Application Systems, Technology Infrastructure and Organizational
Structure

Assessment of Current IS Environment to form a basis for Identification
of EDI opportunities, Development of EDI Strategy and Formulation of
Migration Approach.



System Planning for EDI Implementations
Determination of EDI Opportunities

Development of detailed understanding of organizations
business environment at business process level
Defining Business process uses of Data
Identification of Opportunities in Using EDI to support
Organizations business needs and Strategic Initiatives which
includes:
Understanding organizations core business functions
Optimization and coordination of information flows between the
organization and its trading partners through external linkage
analysis.



System Planning for EDI Implementations
EDI Issues


Integration of EDI in Application Software

A modification of the processing logic of some existing applications together
with development of Some new applications

A complete redesign and development of an organizations application
portfolio.


System Planning for EDI Implementations
Cost/Benefit Analysis

A proper understanding and estimation of beefit is to be carried against
the cost of EDI Implementation
Tactical Benefits Strategic Benefits
Better Product Awareness Product ior service differentiation
Improved Customer Support Competitive Corporate Cost Structure
Efficient Information Delivery Penetration of new Markets
Shortened Product development time Increased responsiveness to customers
Improved Quality Control Improved customer relations and loyalty
Reduced inventories Reduced bargaining powers of buyers
and suppliers
Improved relationships with suppliers Strengthen supplier alliance
System Planning for EDI Implementations
Risk Assesment
The following types of Risks need to be assessed
before EDI Implementations
Market Concept Risk (Judged by Customer acceptance)
Technology Risk
Economic Risk
Organizational Risk
Regulatory Risk (Govt Interference)
System Planning for EDI Implementations
EDI Technology Infrastructure Considerations
1. Positioning
Increasing No of trading Partners
Increasing no of EDI Applications
Projected business growth
Changing IS Infrastructure (of the orgn or trading partner)
Electronic integration with business partners such as JIT Manufacturing
Changing EDI technology (Event driven EDI or real time/Interactive EDI)
2. Transmission of EDI Data
Direct or Point to point Transmission (Suitable to interact with limited partners)
Third Party or Value Added Network (VAN)
3. Centralization of EDI System Functions
A single and centralized installation of translation and communication software avoids
duplication of development and maintenance efforts


Development of EDI Implementation Plan
Firstly, Organizations should start with the pilot project which act as a
vehicle for organizational learning, focus on making the technology work
and determining impact on organization, securing the senior management
support for EDI Program based on understanding of implementation
process and business implications. Its success depends upon the following
Factors:
Identification of EDI Opportunities
Selection of EDI Transaction, standards, and trading partners
Selection of VAN supplier
Analysis of procedural and information flow of selected transactions.
Assessment of impact of EDI implementation on existing business process.
Issues related to operational staff affected by implementation
Providing training and promoting EDI program internally and externally
Acquiring necessary resources such as Skilled staff, hardware and software.

Conclusion
Organization have adopted EDI to expand the
automation of business processes beyond
traditional corporate boundaries. EDI has become
the tool to streamline business activities. It also
facilitates the cooperation and coordination
between customers and vendors.
EDI is the facilitator for achieving improvement in
overall quality by fewer errors, reduction in
processing time, less human intervention and
minimized unproductive time.
Thank You..!!!