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447 views21 pagesElectronic Data Interchange
The document discusses electronic data interchange (EDI), which is defined as the exchange of standardized electronic data between organizations. EDI aims to reduce paperwork by allowing electronic transmission of common business documents like purchase orders and invoices. The document outlines some standards for EDI, compares EDI to traditional paper-based systems, and describes the components and process of EDI exchanges. It also discusses different types of EDI connections and applications of EDI in various industries like banking, manufacturing, and online transactions.
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100% found this document useful (1 vote)
447 views21 pagesElectronic Data Interchange
The document discusses electronic data interchange (EDI), which is defined as the exchange of standardized electronic data between organizations. EDI aims to reduce paperwork by allowing electronic transmission of common business documents like purchase orders and invoices. The document outlines some standards for EDI, compares EDI to traditional paper-based systems, and describes the components and process of EDI exchanges. It also discusses different types of EDI connections and applications of EDI in various industries like banking, manufacturing, and online transactions.
Uploaded by
Jay SmithCopyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 5
The Nature of Electronic Data Interchange
Electronic Data Interchange: Is defined as the exchange of computer processable data in a standard format between organizational entities It is a set of data definition that permits business forms that would have been exchange electronically.
ASC- American Standard Committee
UN/EDIFACT-United Nations EDI for Administration, Commerce, and Transport
EDI versus Paper-based System
The used of electronic and online technology in any sector or industry of the economy has brought forth with the so-called paperless transaction.
The concept of EDI veers away from voluminous paperwork's that come with the traditional business as diagrammatically shown in Fig.49.
Figure 49. EDI system versus paper-based system
Fig.50 Information flows in the EDI purchasing process
Fig. 51 Information flows in the paper-based process
EDI versus traditional Method
Fig.52 EDI versus traditional method
Components of EDI and how it works
Fig.53 Components of electronic data interchange system
Fig. 54 How EDI works in a procurement activity
Application of EDI
Fig.55 EDI application among participating firms
Fig. 56 Application of EDI transaction in a manufacturing concern
Direct versus indirect EDI connection
Fig.57 Direct EDI connection
Fig. 58 Indirect EDI Connection
Open EDI
A more recent innovation to EDI is Open EDI on Virtual Private Networks(VPN).
VPN is a technology that need for expensive leased lines for site-tosite communication and long distance remote access.
Two major requirement of a VPN: There must be a method of keeping the data secure as it traverse the internet. There must be a means of authenticating the person or system making the connection.
EDI and the banking system
As earlier mentioned, EDI and online banking have given rise to the popular use of EDI. Bank and eCommerce is routinely used in to the banking sector in particular for Financial EDI over secure global network.
