Electronic Data interchange(EDI)

Electronic Data interchange(EDI) :

• Computer readable forms for business documents such as invoices,
  purchase orders, delivery notes needed in B2B e-commerce so that e-
  documents can be exchanged.
• Essential to eliminate manual data entry, which is error prone
• Essential to agree on common formats for commonly used forms.
• Electronic data interchange (EDI) standard gives specifications for
  commonly used standard business forms.
• It is possible to adapt these standards for documents which use XML for
  specification.

Electronic Data interchange(EDI) Specification : Defines several hundred transaction sets corresponding to each type of business document such as invoice, purchase order etc. Defines data segments - corresponding to groups of data elements such as purchase order line. Defines data elements - which are individual fields such as price, quantity etc.

Electronic Data interchange(EDI)Standards : 

•  ANSI X.12 standard proposed by American National Standards Institute.
•  EDIFACT (Electronic Data Interchange For Administration Commerce and
  Trade) standardized by United Nations Economic Commission for Europe
  for international trade.
•  EDIFACT used in India for government transactions - customs, central
  excise etc.

 EDI Transaction in B2B E-Commerce : 

•  Cooperating businesses agree on EDI standard .
• Programs needed to translate data received in EDI format to a form needed
  by the application program.
• Method of sending/receiving data between businesses to be agreed on - is it
  PSTN, Extranet or VAN (value added network) service?
• Important to ensure reliable, guaranteed and secure receipt of electronic
  documents by intended receiver.

EDI Using Value Added Network Service : VAN provides post box for all subscribers, guarantees delivery and is open 24 hours, 7 days a week. Provides security, acknowledgement, audit trails for transactions, non repudiation by users. Some VAN’S provide conversion of EDI forms to application format. Disadvantages are it has high cost, that may not be cost-effective for smaller businesses

EDI Using Internet : Cheaper method for use by small business is to use XML for EDI and e- mail, instead of VAN. Establish EDI form standard - XML appropriate – Document Type Definition (DTD) publicised using organization’s web page-cooperating business can use a DTD to interpret XML documents.
Use MIME (multipurpose internet mail extension) to attach EDI forms to e-
mail messages. Can use Simple Mail Transfer Protocol (SMTP) of internet
If secure transmission needed use S/MIME (Security enhanced MIME)
which uses encryption and digital signature –(We will describe encryption
and digital signature later in this module). If very long document or many
documents are to be sent together File Transfer Protocol (FTP) may be more
appropriate.