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World Class Procurement Definitions A forum for defining key terms / definitions as it applies to World Class Procurement and Supply Chain Management

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Old 08-18-2006, 06:51 PM
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Default Electronic Data Interchange (EDI)

Electronic Data Interchange (EDI) is the computer-to-computer exchange of structured information, by agreed message standards, from one computer application to another by electronic means and with a minimum of human intervention. In common usage, EDI is understood to mean specific interchange methods agreed upon by national or international standards bodies for the transfer of business transaction data, with one typical application being the automated purchase of goods and services.

Despite being relatively unheralded, in this era of technologies such as XMLservices, the Internet and the World Wide Web, EDI is still the data format used by the vast majority of electronic commerce transactions in the world.
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Old 08-18-2006, 06:52 PM
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Default Re: Electronic Data Interchange (EDI)

Advantages vs. Disadvantages of using EDI (According to Wikipedia)

There are several advantages of using EDI all of which provide distinct benefits to the user. One of the most notable benefits to using EDI is the time-saving capability it provides. By eliminating the process of distributing hard copies of information throughout the company, easy access to electronic data simplifies inter-department communication. Also, another time-savings advantage is the ability to track the origin of all information therefore significantly reducing time spent on corresponding with the source of the information.

Another benefit for the user of this information system is the ultimate savings in costs for the company. Although the initial set-up costs may seem high, the overall savings received in the long run ensures its value. For any business, regardless of its size, hard-copy print outs and document shipping costs add up. EDI allows for a paper-less exchange of information reducing handling costs and worker productivity that is involved with the organization of paper documents.

Electronic data interchange has another strong advantage over paper-based information exchange which has to do with accuracy of information. When the information is already stored electronically, it speeds up an organizations ability to check for accuracy and make any necessary corrections as the data is already inputted in the system. Also, unlike paper-based methods, EDI allows for the ability to send and receive information at any time thereby tremendously improving an organizations ability to communicate quickly and efficiently. There are a few disadvantages of using electronic data interchange. The most significant disadvantages involve the initial set-up. The preliminary expenses and time that arise from the implementation, customization and training can be costly and therefore may discourage some users.
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