by Al Polanec, Blue Archer Principal

 

Although electronic data interchange has been around for nearly 40 years, it has not been used to trigger an explosion in business-to-business electronic commerce.

EDI is a set of standards for controlling the exchange of business documents, such as purchase orders and invoices, between computers or systems. Businesses can use EDI to ensure that the documents they exchange are interpreted correctly, regardless of the platforms or internal applications they use. Because EDI enables electronic documents to move from one system to another without the need for human intervention, it is faster, cheaper, and more accurate than the exchange of paper documents.

But the number of businesses trading electronically today compared to those using phone or fax is limited. The reasons for this are numerous and include the following:  EDI server systems are typically expensive and the EDI document format is somewhat cryptic.

EDI document transport historically utilized a value-added network that incurred both an expensive setup fee and ongoing operational costs.

Ten years ago, there were very few alternatives to the use of the EDI standards for integrating with key trading partners. In many cases, investments by larger buyers meant sellers were invariably forced to make the EDI investment to remain in good standing with these key buyers.

At the time, EDI standardization and technology represented an advance in efficiencies that saved money, but a good part of this savings was already spent in the form of licensing and other technology-driven fees. Today, a host of options exist for companies that want to streamline processes, or integrate more tightly with key trading partners.

One of the biggest technology advancements since the advent of EDI has been XML technology. Whereas the internet is a medium that stresses the presentation of information, XML technology allows the internet to become a much more effective platform for the description and transmission of data.

One of the primary features of XML is its inherent ability to create customized, flexible definitions of data sets. What does all this mean for your business?

XML and the standards that have come out of XML can in many ways replace the standards that are present in the EDI technologies.

Although the specifics of EDI technology are not simulated, the functions of it are. And with more usage of high-powered, inexpensive database systems that can easily integrate XML documents, standardization is easier than ever to implement in your organization.

So how can your organization deal with firms who are firmly rooted in the world of EDI without actually using EDI?

There are a number of "second-generation" integration software applications available on the market for reasonable licensing fees. These packages allow incoming EDI transmissions to be "decoded" and mapped back to a standard data format that your administrative systems can read. They also map transmissions from your administrative systems back to a myriad of file formats, including EDI.

In this manner, you can observe industry standards; yet not have to reinvent the wheel (custom program each feed or import) each time you need to integrate with a new standard or new trading partner.

Many options exist that will allow your organization to integrate with trading partners without being burdened with excessive technology investments.

Be sure to get all of the information on the subject prior to committing to a decision - and, remember, there are always alternatives.

 

For more information, Al Polanec may be reached at 412.353.1049, or at apolanec@bluearcher.com.

 

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