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The Use Of EDI In The Business World

The Use Of EDI In The Business World

By Mark Walters

In today's fast-paced times, many methods of correspondence are done electronically. Businesses are always on the lookout for ways to lessen costs and emails, forms, and bills are sent to one another via computer. All of these communications add up to what is known as electronic data interchange (EDI).

There is far more to electronic data interchange than a few emails shot back and forth between businesses. This can be considered a small part of the process, but true EDI refers to far more electronically sent items. Forms that require data figuring such as bills and checks are formatted according to specifications and then sent out along the waves from the sender's computer to the recipient's. DVDs and floppy discs are a form of electronic data interchange, but recent EDI standards prefer to shy away from human interaction at any point of the interchange. The only time that a human should be involved is the sending and reception of the data and some preliminary error correction. Too much human interplay defeats the purpose of EDI's automation.

In electronic data interchange terms, those who send and receive the documents are known as trading partners. It is up to them to decide what to send and for what purpose the documents will be used. Because this is one of the few aspects of EDI that involves human interaction, these communications are sent using human readable specifications. Products that are to be sent and received also need to be as specific as possible between the trading partners so that the proper transaction is completed. EDI guidelines within rather large companies are sometimes particular to each individual department.

Electronic data interchange is appealing because of the sheer amount of automation it employs. Errors in calculation and other areas are caught by the various computer programs found along the way in EDI. It is therefore unnecessary to have someone spend an inordinate amount of time scrutinizing large numbers of forms and papers which takes a lot of resources and money. Without the need to have a person constantly performing error correction, they can be utilized elsewhere in the office. A company also has no need to keep extraneous payroll on the staff to do so.

Electronic data interchange saves time and money. There is no more poring over scads of information that could take hours. Without tying up someone (or an entire team) in such tedious activity, their services can be better utilized elsewhere, making for a more efficient and profitable business.