Electronic Data Interchange (Edi) Makes It Easier To Transmit Data Between Companies. True/false?

What is EDI (Electronic Information Interchange)?

Electronic Information Interchange (EDI) is the calculator-to-computer exchange of business organization documents in a standard electronic format between business partners.

By moving from a paper-based commutation of business certificate to one that is electronic, businesses enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners.

Computer-to-Computer

Computer-to-reckoner EDI replaces postal mail, fax and email. While email is besides an electronic arroyo, the documents exchanged via electronic mail must still exist handled by people rather than computers. Having people involved slows downwardly the processing of the documents and also introduces errors. Instead, EDI documents can menstruum straight through to the appropriate application on the receiver'southward computer (e.g., the Order Management Organisation) and processing tin brainstorm immediately. A typical transmission process looks similar this, with lots of paper and people involvement:

Purchase to invoice cycles for fax and mail using manual processes.

The EDI process looks like this — no paper, no people involved:

EDI purchase to invoice cycle with the supplier.

Concern documents

These are any of the documents that are typically exchanged between businesses. The almost common documents exchanged via EDI are purchase orders, invoices and advance ship notices. But there are many, many others such equally bill of lading, customs documents, inventory documents, shipping status documents and payment documents

Standard format

Because EDI documents must exist processed by computers rather than humans, a standard format must be used so that the reckoner volition exist able to read and sympathise the documents. A standard format describes what each piece of information is and in what format (e.k., integer, decimal, mmddyy). Without a standard format, each visitor would send documents using its company-specific format and, much every bit an English-speaking person probably doesn't empathize Japanese, the receiver'southward reckoner arrangement doesn't empathize the company-specific format of the sender's format.

At that place are several EDI standards in use today, including ANSI, EDIFACT, TRADACOMS and ebXML. And, for each standard there are many different versions, eastward.yard., ANSI 5010 or EDIFACT version D12, Release A. When 2 businesses decide to exchange EDI documents, they must agree on the specific EDI standard and version.
Businesses typically use an EDI translator – either as in-house software or via an EDI service provider to translate the EDI format and so the information can be used past their internal applications and thus enable direct through processing of documents.

Business partners

The exchange of EDI documents is typically between ii unlike companies, referred to as business organization partners or trading partners. For case, Visitor A may buy goods from Visitor B. Visitor A sends orders to Company B. Company A and Company B are business partners.