EDI

4 Pages 1004 Words

Wouldn’t it be great to have a way of transferring documents computer-to-computer with totally unrelated companies in an electronic form that would cut down on paper usage? Guess what! We have it. EDI or Electronic Data Interchange has been around for quite sometime now. This electronic method of document transfer is quite amazing and has many benefits once it is implemented.
How does EDI work? One credible source explains an example of an EDI transaction, as it would be for a purchase order in these seven steps:
1. The buyer’s production database includes data generated by the applications software. The application software may be a vendor-purchased package or custom-developed. The buyer enters order information, generating a purchase order on the computer. The order information then channels through a number of interface programs.

2. The interface programs perform edits and checks on the document and direct the order data in to predefined EDI interface files. The EDI interface files contain the order information in a form that can be read by the EDI translation software — a set of programs that translates or maps the interface file data into an electronic document formatted according to EDI standards. The electronic document (in this case, the purchase order) consists of a file (or files) that contains the order data in a predefined, recognizable format.

3. The communication software adds appropriate communications protocols (e.g., asynchronous or bisynchronous) to the EDI document in preparation for transmission over telephone lines.

4. Using a modem and telephone line, the buyer transmits the electronic standard purchase order to the supplier’s computer.

5. The communications software on the supplier’s computer interprets and/or converts the communications protocols to open the electronic document. The standard EDI purchase order is now in a recognizable format in a file or files and is now availab...