E-Commerce Standard Systems for Application,Chapter 9,www.usstec.com,9.1 EDI Standard 9.2 The Standard of ebXML 9.3 RosettaNet Standard,www.usstec.com,9.1 EDI Standard,9.1.1 Introduction Short for electronic data interchange, the transfer of data between different companies using networks. As more and more companies get connected to the Internet, EDI is becoming increasingly important as an easy mechanism for companies to buy, sell, and trade information.,www.usstec.com,EDI is a widely-used technology for the automated exchange of documents between dissimilar applications. It allows value chain partners to exchange purchase orders, invoices, advance ship notices and other business documents directly from one business system to the other, without human intervention. Proven advantages are fewer errors, lower administrative costs, and faster order-to-cash cycles.,www.usstec.com,An EDI message contains a string of data elements, each of which represents a singular fact, such as a price, product model number, and so forth, separated by delimiter. The entire string is called a data segment. One or more data segments framed by a header and trailer form a transaction set, which is the EDI unit of transmission .A transaction set often consists of what would usually be contained in a typical business document or form.,www.usstec.com,The parties who exchange EDI transmissions are referred to as trading partners. EDI is the process of using computers to exchange business documents between companies. Previously, fax machines or traditional mail was used to exchange documents. Mailing and faxing are still used in business, but EDI is a much quicker way to do the same thing. EDI is used by a huge number of businesses. Over 100 000 businesses have replaced the more traditional methods with EDI.,www.usstec.com,This new system has a number of benefits; cost is one of them. Computer to computer exchange is much less expensive than traditional methods of document exchange. Processing a paper-based order can cost up 70 US dollars As a computer processes the documents in EDI, there is also less chance of human error. Speed is another benefit. A paper purchase order can take ten days to two weeks from the time the buyer requests it to the time the shipper sends it off.,www.usstec.com,Now, the same order can be processed in less than a day. These faster transaction help maintain efficient inventory levels. They also contribute to a better use of warehouse space, and less out-of-stock problems. This in turn leads to a reduction in freight costs, as there should be no need for last minute urgent delivery surcharges. There are a few drawbacks to the process.,www.usstec.com,EDI can only work if everyone the company has deals with is using the same method. If the changeover has not been made within some businesses, other companies dealing with them may have to use EDI as well as the more traditional methods. This can be costly and time consuming. It may involve one member of staff maintaining the mailing process while another worker sends documents electronically.,www.usstec.com,The process of using EDI for purchasing is very simple. Once a purchase order has been written, the document is translated into a specific format and submitted to the supplier via the Internet. It must be ensured that the document used by both parties is in exactly the same format. Security is an important issue for companies using EDI. Data security is controlled throughout the process using passwords, encryption and user identification.,www.usstec.com,The EDI has software that checks and edits the documents for accuracy. Basically, all that is needed to run this method of document exchange is a computer and access to the Internet. There are many companies that supply no-fuss EDI software application packages. These have their own encryption software and the installation process can be completed in a few minutes. From a small initial outlay, companies can use EDI to improve efficiency while saving time, money and labor.,www.usstec.com,9.1.2 EDI Standards,EDI is intended to handle all aspects of business transactions. One of the principal aims of EDI has been to develop electronic surrogates for the myriad of paper forms used in commercial transactions such as purchase orders, bills of lading, and invoices. Since the early 1970s, efforts have been underway to develop standardized data formats for business transactions.,www.usstec.com,There are two main EDI standards that are currently used in North America and Europe; the ASC X12 group of standards supported by the American National Standards Institute (ANSI) and the EDIFACT standards supported by the United Nations Economic Commission for Europe. The following outlines the three basic structural components of EDI standards. Both the ANSI X12 and EDIFACT standards are based on these components.,www.usstec.com,A syntax and encoding scheme for messages which specifies the structure of data. The data should be in