Dear San,
EDI (Electronic Data Interchange) – The transmitting of documents from one computer application to another computer application using a standardized format.
Why implement EDI?
Improves data accuracy: You can eliminate the need to re-enter data from paper documents and thus prevent potential data entry errors. It is estimated to be one-tenth the cost of handling its paper equivalent.
Reduces technical complexity: With EDI, companies use standardized data formats to exchange documents. EDI allows companies using different systems to achieve computer-to-computer electronic exchange of business documents.
Lowers personnel needs: EDI can help companies reduce the need for personnel involved in paper business transaction processing.
Accelerates information exchange: The lead time between start and completion of order processing is greatly reduced. By timeous scheduling companies can plan production more accurately and thus reduce stock inventories.
EDI technologies have evolved as a data carrier replacing the paper document. It is not a new concept or a new practice. EDI has existed for more than 2 decades in Europe and North America.
Early electronic interchanges used proprietary formats agreed upon between two trading partners requiring new programs each time a new partner was added to the existing system. Lateron some industry groups began a cooperative effort to develop industry EDI standards for purchasing, transportation, and financial applications. Many of these standards supported only intra-industry trading, which led to a large number of EDI formats.
In 1979, the Accredited Standards Committee (ASC) X12 was formed to develop a generic EDI standard. In 1993, Version 3, Release 4 contained 192 standards. There are over 100 additional standards in development. In the U.S., the most commonly used standard is ANSI X12, coordinated by the American National Standards Institute (ANSI). While in Europe, it is the Electronic Data Interchange for Administration, Commerce, and Transportation (EDIFACT) standard. SAP maps it message types by EDIFACT naming conventions
Hope this helps you.
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Regards,
Rakesh
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