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EDI FAQs
I was asked to use a specific EDI solution by an EDI partner that I am working
with; does this exact method need to be used to send electronic documents?
What is the difference between electronic data interchange provided by an EDI VAN
and Internet EDI?
What different types of EDI services and solutions are available for me?
What should I consider when choosing EDI software instead of a web-based EDI or
service bureau solution?
There has been much said about data standards and EDI related industry
associations. Are these associations and EDI standards important?
I was asked to use a specific EDI solution by an EDI partner that I am working
with; does this exact method need to be used to send electronic documents?
The nature of EDI solutions are regarded as universal. While there are a number
of EDI standards in place that determine how businesses should exchange EDI
documents, the EDI solution you choose should be based upon your business needs
and which solution best fits your requirements.
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What is the difference between electronic data interchange provided by an EDI VAN
and Internet EDI?
A Value Added Network, often referred to as an EDI VAN, is a private network
dedicated to the secure exchange of EDI traffic. Trading partners obtain an
account with an EDI VAN such as GXS. This account serves as an electronic mailbox
for sending and receiving electronic documents. With an EDI VAN, not only can you
exchange documents with your trading partner, you can also exchange them between
VANs. This is often referred to as an 'interconnect'. These interconnects
benefit companies by providing them access to a larger base of trading partners
throughout the world. EDI VANs have existed for nearly 30 years. In addition to
an EDI VAN, Internet-based EDI enables companies to exchange EDI documents over
the Internet using secure methods of encryption. While there are similar business
benefits for both methods of exchange, the determining factor of which method to
use depends on the specific partner agreement. Optimally, each trading partner
needs to use the same mode of transport, whether that mode is an EDI VAN or
Internet EDI. Most larger businesses require their suppliers to use the same
method of communications for electronic document exchange.
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What different types of EDI services and solutions are available for me?
When it comes to solutions for EDI communication, there are essentially three
options:
With an EDI software solution, your company has the most flexibility and the most
control. The software is located on a computer that is owned by your company and
supports EDI integration with back-office systems which greatly improve your
business process flexibility. When your company uses EDI software to exchange
documents, the documents are directly exchanged between your software and that of
your trading partner. Because this method uses direct 'point to point'
communication, it allows for faster communication, reduced error and a secure mode
of communicating with your trading partners.
With web-based EDI, the EDI software resides on the Internet. Therefore, using
this method of electronic data interchange requires an Internet connection.
Additionally, web-based EDI requires manual entry of EDI information since it is
an interactive process, thereby limiting customization of the EDI process. This
EDI system both lessens your control over day to day operations and the
opportunity for EDI integration.
The last option, EDI service bureaus, serve as contractors who perform your EDI
operations. Payment for these services is usually pay as you go. Companies who
use service bureaus have the smallest opportunities for EDI integration and the
least amount of control over day to day EDI operations.
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What should I consider when choosing EDI software instead of a web-based EDI or
service bureau solution?
The major consideration when it comes to determining which EDI solution to use is
how it will impact your business processes and your company's future operations.
With service bureau and web-based EDI solutions, there is the risk for errors in
the business process since there is manual 'element' in each option. It is
important to remember that with EDI software, exchange occurs directly between
back-office systems. This eliminates the risk of errors that could occur from
manual entry. In addition to the decreased probability of risks, EDI software
lessens time spent on manual entry, allowing your company to focus on order
fulfillment and ultimately, levels of customer satisfaction.
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There has been much said about data standards and EDI related industry
associations. Are these associations and EDI standards important?
EDI related industry associations are very important. These associations enable
your company to achieve a more comprehensive understanding of what other
businesses are doing in your particular industry when it comes to EDI usage.
Additionally, these organizations play a big part in the development of industry
EDI standards. In order for your EDI implementation to be successful and so that
you can achieve a competitive edge in the global market, it is very important to
understand these EDI standards. For more information regarding EDI standard
document formats and numerous industry associations, please visit our 'Resources'
section.
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