FAQs
What is an EDI trading partner?
Is EDI implementation difficult?
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 specific experience, if any, do I need in order to be able to do EDI?
Is it possible to outsource EDI in the same way as other IT services?
EDI – What is it?
Electronic Data Interchange, also known as EDI, involves the sending and receiving of business documents between business partners. Typical business documents include invoices and purchase orders. These documents are transmitted electronically from one computer to another, in a common format.
EDI – Who typically uses it?
Nearly all major industries use EDI to electronically exchange documents, including CPG, aerospace, automotive, retail and finance sectors. EDI is considered the standard for electronic document exchange between one company and another.
What is an EDI trading partner?
Any company with which you exchange documents is known as an EDI trading partner. Many OEMs have a large network consisting of trading partners. These networks are often referred to as ‘Trading Communities’.
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.
Is EDI implementation difficult?
Depending on the type of solution chosen, EDI implementation can be achieved almost immediately. For web-based EDI solutions hosted by a customer or client, all that is required is filling out necessary online forms via their web portal before sending the required documents. Utilizing more complex systems often requires that EDI software be installed on your company’s network. This allows for EDI integration with your company’s back-end office systems. As you begin trading with more partners and you experience business growth, your EDI system will grow in complexity. As such, an EDI system is an evolving solution.
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.
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:
- EDI software solutions
- Web based EDI solutions
- EDI service bureaus
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.
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.
What specific experience, if any, do I need in order to be able to do EDI?
The amount of experience you need in order to be able to do EDI directly correlates to the type of EDI solution you choose for your business. Generally, specific experience is not needed. With Internet-based EDI, solutions are typically "hosted" by a company. All that is needed to access this type of EDI system is an Internet connection and a web browser. Web-based EDI is the simplest method of EDI interaction. For EDI software implementation, simple training is often recommended for your employees. Your EDI vendor can provide this training.
Is it possible to outsource EDI in the same way as other IT services?
Just as with other forms of IT technology, outsourcing EDI services to a company who has the needed resources to manage your EDI requirements is possible. An EDI outsourcing capability is provided by GXS Managed Services. This EDI service provides comprehensive support for your EDI requirements, from recruiting partners to build trading companies to developing maps to link electronic documents together. Having worked with 135 companies across the globe to manage their EDI infrastructures, GXS Managed Services has the capacity to empower you to enable your complete supply chain. Even on a global basis.
My resources don’t sufficiently enable me to explain my EDI strategy and recruit trading partners. How can I achieve this in the most efficient manner possible?
GXS Community LinkSM empowers a business to recruit trading partners quickly to your EDI program. GXS takes care of marketing your EDI service to potential trading partners. Additionally, GXS also works with your trading partners to make sure they can exchange documents with your company as seamlessly and quickly as possible.
Is it possible to trade with my automotive suppliers that are based in China? If so, how is it achieved?
Because of a recently announced partnership between GXS and China Enterprise Online Data Exchange Services Ltd (CEDEX), it is possible to exchange documents electronically with China-based automotive suppliers. Because of this partnership, which has brought about one of the only trading hubs devoted to the expanding automotive industry in China, both domestic and international businesses can trade electronically with China-based automotive companies. Additionally the China e-AutoHub is connected with the GXS Trading Grid, allowing for trading partners to communicate seamlessly across the globe.
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.
How long has EDI been around?
For over thirty years, EDI has allowed companies to electronically trade documents. In addition to being a very mature technology, EDI is a long-established communication solution in many companies. With the emergence of new technologies, such as the Internet, EDI has had to evolve. By taking advantage of these new technologies, EDI continues to serve as an effective and efficient mode of document exchange between companies and will be around for many years to come.