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EDI (Electronic Data Interchange) is as much an evolutionary catalyst for continuous business improvement as it is an IS [Information Systems] technology. EDI is unique in that it combines critical elements of data processing, business processes and communications.
EDI is a worldwide phenomenon that provides the infrastructure necessary for mission-critical transactions. It is being aggressively implemented and backed by national governments in the U.S., Canada, Europe, Asia and the Pacific Rim (Asia/Pacific). EDI has the potential to spur economic development by facilitating commercial transactions.
EDI is defined as the computer-to-computer interchange of business transactions that conforms with specified standards over a communications network that includes at least two trading partners. These transactions include the interchange of common commercial information typically consisting of purchase orders, invoices, shipping notices and related acknowledgments. There are some special EDI characteristics that differentiate it from other processes and business solutions.
Most notably, EDI has been more user-driven than any other automated business solution. This has been advantageous for users because they have not been constrained by IS. They realize that characterizing EDI as a file transfer utility or as document-to-document interchange creates the wrong impression, one that does not portray the significant business benefits of EDI. Conversely, the user-driven nature of EDI has been disadvantageous to users because they lack the architectural and implementation coherence required by complex IS systems.
EDI growth has been bolstered by its appeal to some 30 vertical industry markets, each of which has become involved in specifying EDI standards for special interest organizations within that vertical industry. However, this vertical market appeal has undermined efforts to create a unified EDI standard. This situation has only recently been addressed by X12-Data Interchange Standards Association (X12/DISA). X12/DISA is the umbrella group for U.S. EDI standards, as chartered by the American National Standards Institute (ANSI).
The business and technology issues associated with EDI require special attention to project management, intraenterprise cooperation and relationships between customers and suppliers. Companies that focus on these areas will realize competitive advantages.
The interchange of business information creates an extended enterprise environment. If the enterprise is viewed as a hub of activities, its trading partners can be viewed as spokes. Hubs represent the accumulation point for transactions from multiple trading partners. An...