Electronic Data Interchange

1. What it is

   Annotations:

   • Electronic Data Interchange (EDI) is an inter-organizational system that involves the relatively fast delivery movement of business documents electronically between trading partners with little or without human intervention
2. How It's Done

   Annotations:

   • utilises a set of electronic transaction rules and standards that allow different companies to exchange business documents electronically over a secure network (called a Value-Added Network or VAN). efficient electronic alternative to using email, phone, or fax to transmit and exchange paper documents and is an important area of larger scale e-commerce operations.
3. Outcome

   Annotations:

   • In so doing, organizational boundaries are lowered (Ciborra, 1995), the organization’s interior is somewhat exposed to business partners (Webster, 1995), and thereby creating a high degree of organizational interdependence between participating parties

1. Indirect

   Annotations:

   • Avoiding errors  Faster payments/improved cashflow  Avoiding production stoppages resulting from lack of raw material  Reducing the purchasing/sales cycle (ordering, delivery and invoice)  Reducing stock levels  Reducing inventory breaks 
2. Direct

   Annotations:

   • Paper savings   Avoiding filing costs and maintenance   Avoiding repetitive administrative procedures  Less paperwork enables reduction in administrative personnel
3. Strategic

   Annotations:

   • Increasing business relationships with companies using EDI  Improving customer loyalty  Improving the quality and quantity of information  Faster response and access to information ) Gaining new business contacts using EDI  Reducing the number of business contacts by concentrating on those that use EDI (CONTRED)

Annotations:

• Develop the organizational structure for managing the EDI system Deploy
• Undertake a strategic review of the business
• Develop an EDI solution to meet the needs of the business
• Integrate with other business systems across the company
• Analyse internal business processes
• Establish a pilot project with selected trading partners
• Deploy

1. 1. Develop Organizational Structure

   Annotations:

   • Identify project champion to manage the implementation process and liase with outside providers of EDI solutions Obtain Organisational Support
2. 2. Undertake Strategic Review

   Annotations:

   • project champion performs a strategic review of the business to see which areas of the business will benefit from implementing the EDI solution first.  project champion to undertake an EDI Survey or Cost / Benefit Analysis
3. 3. Develop the EDI

   Annotations:

   • Select process within the business that requires automation Purchase orders Invoice Advance ship notice or ASN Functional acknowledgement Identify and select an EDI network provider and associated software needs for implementation Consider Legal & Audit Requirements
4. 4. Integrate With other Businesses

   Annotations:

   • Identify information that interacts or uses and requires information from the automated business process Integrate such systems with automated process to provide significant downstream cost and efficiency benefits.
5. 5. Undertake Data Analysis of Internal Business Processes

   Annotations:

   • Link all internal documents with trading partners and internal systems to ensure the smooth flow of information. by linking them, allows the information to be transmitted efficiently across a network.
6. 6. Establishing a pilot project with select partners

   Annotations:

   • Implement trial project and Test with a small number of partners.
7. 7. Deployment of EDI

   Annotations:

   • Deploy the project to trading partners

1. Telecommunications

   Annotations:

   • advanced and reliable telecommunication infrastructure
2. Initial Investment

   Annotations:

   • heavy initial investment in software and training
3. Skills

   Annotations:

   • considerable skills and know-how to implement and operate (Webster, 1995) which developing countries still struggle with and unfortunately when not in place can seriously slow down the diffusion rate