EDI: Electronic Data Interchange (EDI) is a computer-to-computer exchange of EDI Technology : Benefits of EDI Technology:

business documents in a standard electronic format between two or more trading

partners.?? It enables companies to exchange information electronically in a EDI (Electronic Data Interchange) is a technology that enables the computer-to- •Speed: Reduces transaction time from days to minutes.
structured format, eliminating the need for manual data entry and reducing the cost computer exchange of standard business documents between organizations, using a
and time associated with paper-based transactions.??EDI was first introduced in standardized format. •Accuracy: Minimizes human error due to automation.
the 1960s as a way for companies to exchange business documents electronically.
Over time, the standardization of EDI formats and protocols has enabled Key Components of EDI Technology: •Cost Efficiency: Cuts down paper, printing, and mailing costs.
businesses to integrate their internal systems with those of their trading partners,
improving efficiency and reducing errors.??EDI transactions can include purchase 1.EDI Standards:Define the structure and format of electronic documents. •Improved Business Relationships: Faster and more reliable transactions
orders, invoices, shipping notices, and other business documents. ??The EDI enhance trust between partners.
standard defines the format and content of these documents, ensuring that they are •Common standards include:
easily interpreted by both the sender and the receiver.?? It allows for faster and •Compliance: Many large retailers and governments require EDI for doing business.
more accurate processing of transactions, leading to improved customer 1.ANSI X12 (mainly used in North America)
satisfaction and increased profits.
2.EDIFACT (international)
Advantages of EDI:??The paper usage reduced: The expense of storing, EDI COMMUNICATION:There are two kinds of communication reconciliation in
printing, recycling, reduces up to the maximum amount due to the EDI. 3.TRADACOMS (UK-based) the case of EDI implementation through a service provider. One is between the
 Improved quality of Data: The data entry errors are reduced due to EDI. company and the provider and involves the company’s own file formats; the other
 Speed Increases: The best advantage is the increase in the speed of the 4.ebXML (XML-based format) between the service provider and the company’s partner, according to the
data interchange. With everything going online, the speed of the information Communication Datasheet described above. The latter is usually designed by the
transfer increases exponentially. 2.EDI Translator:Converts internal data formats (like from ERP systems) to EDI service provider, but the establishment of the data link between the company and the
 Security: By following the Protocols and the standard rules, the security of all standard formats and vice versa. service provider requires the involvement of the company’s IT specialists as well..
the important documents is always secure and safe .
 Information accuracy: Since the information exchanged is based on 3.Communication Protocols:Determine how EDI data is transmitted between HTTP:HyperText Transfer Protocol is used to request and transmit files, especially
standards agreed by the sender and receiver both, the correct information is partners. web pages and web page components, over the internet or other computer networks.
always transferred regardless of where they belong to. In HTTP, web browsers typically act as clients, while an application running on the
 Less Cost: With very less errors, fast response time, every thing becoming • Examples: computer hosting the web site acts as a server. HTTP is typically implemented across
automated, and no use of paper, the cost automatically reduces.. TCP/IP however it can be implemented on top of any other protocol on the internet, or
•AS2 (Applicability Statement 2) on other networks.

EDI STANDARD: EDI provides a technical basis for automated commercial •FTP/SFTP
"conversations" between two entities, either internal or external. ??The term EDI
encompasses the entire electronic data interchange process, including the •HTTP/HTTPS HTTPS:HyperText Transfer Protocol Secure is a combination of the Hypertext
transmission, message flow, document format, and software used to interpret the Transfer Protocol with the SSL/TLS protocol to provide encryption and secure
documents. ?? EDI standards describe the rigorous format of electronic documents, •VAN (Value-Added Network) identification of the server. HTTPS connections are often used for payment type
and the EDI standards were designed, initially in the automotive industry, to be transactions across the internet and for the exchange of sensitive information between
independent of communication and software technologies.??EDI documents 4.EDI Mapping Software:Maps data fields from one system to another, allowing corporate business systems.
generally contain the same information that would normally be found in a paper systems with different structures to communicate.
document used for the same organizational function

Some major sets of EDI standards:[5]??The UN-recommended UN/EDIFACT is the

How EDI Works:??1.A business creates a document (e.g., a purchase order) in AS2:Applicability Statement (AS) 2 uses the same signing, encryption, and MDN
its internal system.??2.The EDI translator converts the document into a standardized conventions used in the original AS1 protocol. AS2 messages are usually sent across
only international standard and is predominant outside of North America.
EDI format.??3.The document is transmitted to the trading partner using a the internet using the HTTP or HTTPS protocol. AS2 has been widely deployed as a
# The US standard ANSI ASC X12 (X12) is predominant in North America. communication protocol.??4.The trading partner’s EDI system receives and point to point connectivity method. AS2 offers many advantages over standard HTTP,
translates the EDI document into their internal format.??5.The document is including increased verification, and security achieved through the use of receipts and
# GS1 EDI set of standards developed the GS1, predominant in global supply chain. processed automatically in the partner’s system. digital signatures. AS2 transactions and acknowledgements also occur in real-time,
increasing the efficiency of document exchanges. The U.S company Walmart was one
# The TRADACOMS standard developed by the ANA (Article Number Association, of the first companies to help drive the adoption of AS2 across the retail sector.
now known as GS1 UK) is predominant in the UK retail industry.

OFTP:Odette File Transfer Protocol was developed to offer a standard EDI IMPLEMENTATION: Implementing EDI (Electronic Data  Authentication:Verifying the identity of trading partners to ensure they are who they
communication platform for the European automotive industry and has been in use Interchange) involves a structured process of integrating a system for claim to be, preventing unauthorized access.
since the mid-1980s. OFTP has also seen adoption across the retail, white goods, electronic document exchange with trading partners, aiming to automate
manufacturing, government, transport, insurance and banking industries to name but  Encryption:Protecting sensitive data during transmission and storage, making it
processes and reduce manual errors. This typically involves a 10-step
a few. The OFTP protocol is very simple to use, consisting of only fourteen commands. unreadable without the proper decryption key.
process, starting with organizational structure development and ending with
The protocol is extremely efficient, allowing large transmission windows to be utilised the rollout to trading partners. Key steps include strategic review, in-depth  Authorization:Controlling access to EDI data based on user roles and permissions,
whilst incorporating file restart, data compression and security. OFTP has been
analysis, solution development, network provider selection, system limiting who can view or modify specific documents.
designed to allow companies to communicate easily via point to point connections.
integration, data mapping, and pilot projects.
 Secure Communication Protocols:Using secure protocols like SFTP, HTTPS,
Here's a more detailed look at the implementation process: or AS2 to transfer EDI documents over the internet.
OFTP 2.0:Odette File Transfer Protocol version 2.0 is the latest version of the  Data Integrity:Ensuring that the data received is identical to the data sent,
OFTP standard and has been designed from the outset to be used across the internet. 1. Organizational Structure:Develop a clear project structure, including a team
OFTP2 offers a number of benefits over OFTP including data compression, exchange to oversee the implementation. preventing tampering or corruption.
of digital certificates (to improve security of transmissions) between trading partners,  Non-repudiation:Providing proof of the validity of a transaction, so that neither party
it allows the handling of very large files (over 500Gb) and offers support for additional
2. Strategic Review:Evaluate the current state of business operations and
determine how EDI can streamline processes and improve efficiency. can later deny that it occurred.
character sets such as Chinese and Japanese. To date, OFTP has mainly been used
in Europe however as OFTP2 has been designed to operate across the internet it can
3. In-depth Analysis:Conduct a detailed analysis of existing systems, processes,  Regular Monitoring and Auditing:Continuously monitoring EDI systems for
help trading partners connect to one another all over the world. Many automotive security vulnerabilities and conducting regular audits to identify and address potential
manufacturers in Europe have been running OFTP2 pilot projects since 2008 and it is and requirements to identify specific needs for EDI implementation.
risks.
expected to be widely deployed across production projects during 2010. 4. Solution Development:Choose an EDI solution (in-house or outsourced) that
 Compliance:Adhering to industry regulations and standards governing electronic
aligns with business needs and provides the necessary functionalities.
data exchanges, such as HIPAA, GLBA, and SOX.
FTP:File Transfer Protocol is a standard network protocol used to exchange and 5. Network Provider Selection:Select an EDI network provider (VAN) that meets Examples of EDI security measures:
manipulate files over a TCP/IP based network such as the internet. FTP is built on a the requirements for data transmission, security, and compliance.
client-server architecture and utilises separate control and data connections between  Digital certificates: Used for authentication and encryption.
6. System Integration:Integrate the EDI solution with existing business systems,
the client and server applications. FTP is also often used as an application component  Firewalls: Protecting networks from unauthorized access.
to automatically transfer files for internal functions within programs. FTP can be used such as ERP and CRM.
with user-based password authentication or with anonymous user access.  Anti-virus software: Protecting systems from malware infections.
7. Data Mapping:Map data between internal systems and the EDI solution,
ensuring accurate data exchange with trading partners.  Secure file transfer protocols (SFTP): Used for secure data transfer.
8. Pilot Project:Launch a pilot project with a limited set of trading partners to test  Digital signatures: Ensuring the authenticity and integrity of documents.
FTPS:File Transfer Secure Protocol is an extension of FTP which adds support for
the Transport Layer Security (TLS) and the Secure Sockets Layer (SSL) cryptographic the EDI solution and identify any issues before full implementation.
protocols. FTPS should not be confused with SFTP, an incompatible secure file EDI agreement: An Electronic Data Interchange (EDI) agreement is a legal
9. Data Compliance:Ensure that data exchanged through EDI complies with
transfer subsystem for the Secure Shell (SSH) protocol. It is also different from Secure contract between two or more parties outlining the terms and conditions for
FTP, the practice of tunneling FTP through an SSH connection relevant regulations and industry standards.
exchanging data electronically. T??his data typically includes business documents
10. Rollout to Trading Partners:Gradually roll out EDI to all trading partners, like purchase orders, invoices, and shipping notices.?? The agreement ensures that
ensuring seamless integration and effective communication. the data is transmitted in a standardized format, facilitating efficient processing by
EBMS:ebXML Messaging Service offers a secure and reliable SOAP/Web
both parties.
Services based packaging, routing and transport protocol as defined by the ebXML
specifications. The ebMS is an open standard and as such is communication protocol
There are some point about edi agreement:
neutral although the most common underlying protocols are HTTP and SMTP. ebMS EDI SECURITY: EDI (Electronic Data Interchange) 1.Parties Involved:Clearly identify all organizations participating in EDI.
essentially offers a way to exchange ebXML based B2B documents between different security encompasses the measures and practices implemented to 2.Purpose of the Agreement:Define the intention to exchange business
business applications using SOAP/Web services. protect the secure, automated exchange of digital documents documents electronically.
between businesses. This includes protecting data integrity, ensuring 3.Standards & Formats:Specify EDI standards to be used (e.g., ANSI X12,
confidentiality, and preventing unauthorized access. EDIFACT).
Here's a more detailed look:

4.Document Types:List all EDI documents to be exchanged (e.g., 850, 810, do not want to or cannot buy directly from manufacturers in large
856). quantities.
5.Transmission Protocols:Define methods for data transmission (e.g., BUSINESS TO BUSINESS: Business-to-business (B2B) happens 4. Service Providers: While tangible goods are significant, services are
AS2, FTP, VAN). when one company sells stuff to another company, not to regular people. equally essential. Service providers offer a range of services that cater to
the needs of other businesses. This can include consulting services,
6.Security & Confidentiality:Outline data encryption, authentication, and ??It is like a business team-up, where companies work together to get
marketing expertise, legal assistance, IT support, and more. Service
confidentiality measures. what they need. In simpler terms, if a company needs materials or
providers bring specialised knowledge and skills to the table, helping
7.Acknowledgment Requirements:Detail expectations for document services, they check out other companies that provide those things.??
businesses enhance their operations, solve problems, and navigate
acknowledgments (e.g., 997 Functional Acknowledgment). This involves steps like checking out potential sellers, talking about prices challenges. The relationship between service providers and businesses is
8. Data Retention:State how long EDI transaction data must be stored. and details, making orders, and finally, the selling company delivering the often based on trust and the desire to achieve specific goals
9.Error Handling:Describe how errors will be reported, corrected, and goods or services.?? B2B is like the backbone of how businesses get collaboratively.
retransmitted. things done, as they rely on each other to keep running smoothly.?? B2B
10.Liability & Responsibility:Define who is responsible for errors, delays,
transactions include different types, like manufacturers creating products, Advantages of b2b:
or data breaches.
distributors moving them around, wholesalers selling in bulk to retailers,
and service providers offering various business-related services. ??This  Buyers benefit from competitive bidding and bulk purchasing.
11.Termination Clause:Conditions under which the agreement can be
system works well because each business can focus on what they're good  Buyers can negotiate better discounts with suppliers.
terminated.
at, promoting expertise.
12.Governing Law:Specify which legal jurisdiction applies in case of  It involves greater flexibility in choosing suppliers based on set
disputes. parameters such as quality, price, terms, and conditions.
Types of B2B :
13.Amendment Process:Define how changes to the agreement will be  Buyers can also establish and maintain preferred supplier lists to build
1. Manufacturers: Manufacturers are the builders of the business world.
handled. They are responsible for creating goods on a large scale. This can include long-term relationships.
raw materials, components, or finished products ready for use. The  Integrated e-commerce platforms also reduce administrative burdens
⸻ manufacturing process involves turning raw materials into the final
and boost procurement cycles.
products that businesses and consumers use daily. Manufacturers are
crucial in the supply chain, creating the foundation for various industries.
Once the goods are ready, manufacturers often sell them to distributors, Disadvantages of b2b:
wholesalers, or other businesses involved in getting products to end-
users.  Maintaining integrated online portals requires a good investment in
2. Distributors: Distributors act as the go-between in the journey from technology, infrastructure, and training.
manufacturers to retailers or other businesses. Their main job is to buy  Suppliers may feel less loyalty to a buyer-oriented platform than a
goods from manufacturers in bulk and then sell them in smaller quantities
to retailers. This step helps bridge the gap between the large-scale
direct buyer relationship.
production of manufacturers and the more localised or specialised needs  Businesses operating in niche markets with limited supplier options
of retailers. Distributors usually have a network of connections with may not benefit from this supplier diversity approach.
manufacturers and retailers, ensuring a smooth flow of goods through the
supply chain. This distribution process is crucial for making sure products
reach different markets efficiently.
3. Wholesalers: Wholesalers operate in large quantities. They act as
intermediaries who buy goods from manufacturers, distributors, or other
sources in substantial amounts. These goods are then sold to retailers or
other businesses in smaller batches. Wholesalers simplify the purchasing
process for retailers by offering a one-stop shop for a variety of products.
This helps retailers manage their inventory and ensures a steady supply
of goods. The role of wholesalers is particularly vital for businesses that