IntroductionElectronic Data Interchange (EDI) is the electronic communication of customer order or purchase order information between companies and their customers, or between companies and their suppliers. EDI technology was originally pioneered by the automotive industry and has been available for general use since the 1980's. Over time many other industries have adopted the use of EDI as the EDI technology has matured. If you are not familiar with EDI technology, you should find our Glossary of EDI Terms and our Summary of Common EDI Transactions helpful.
The Current Overall Status of the Use of EDI TechnologyMany large companies have made significant investments in traditional EDI technology and have been very slow to replace this technology for dealing with its suppliers and customers. Consequently, supporting the use of EDI remains a requirement for doing business in several major industries.
In some instances, the use of traditional EDI Translation Software, and related Value Added Networks, have been replaced with the use of the Internet for electronic communication directly with customers and suppliers via their web sites, or via industry focused web sites/services. Note this change does not reduce the setup effort required to electronically integrate EDI transactions with the in-house Enterprise Management Software.
The minimum investment required to support EDI requirements is to install any one of a number of third party EDI Translation Software programs on a standalone personal computer with access to a Value Added Network (VAN) or with access to an Internet EDI transaction service. The EDI transactions processed can be manually integrated with the company's Enterprise Management Software (commonly referred to as ERP software). This manual EDI integration can be acceptable if there is a minimum volume of EDI transactions being handled and there is sufficient lead time to process the EDI transactions through the Enterprise Management Software.
As the volume of required EDI transactions increase, the number of Trading Partners increase, and/or the EDI transaction lead time becomes an issue, the effort required to manually integrate EDI can become very labor intensive, very time consuming, and eventually ineffective. Many times the time required to process EDI transactions becomes critical because of the very short lead times required to support some of the required EDI transactions such as Production Schedules and Shipping Triggers.
There are several traditional EDI Translation Software products available on the market. A few examples are Radley CARas, Sterling Gentran, Trusted Link for Windows, and St. Paul Software. Note the use of these products satisfy the requirements to receive and/or send EDI transactions from your company's "front door". However, significant additional setup effort is required to electronically integrate these transactions with your current Enterprise Management Software.
Each vendor of a particular Enterprise Management Software (ERP) product is typically familiar with one or two of these EDI Translation Software products. Consequently, these Enterprise Management Software vendors typically require companies using their ERP software to purchase and implement the EDI Translation Software product they are familiar with, when their customers have requirements for EDI.
In many of these ERP implementations changing the EDI Translation Software is an unnecessary expense because most EDI Translation Software products provide the same core software functionality and are typically interchangeable.
The use and acceptance of EDI technology has not reach its original advertised potential because of the lack of comprehensive EDI standards being adopted, and the subsequent technical resources it requires to setup and, in some cases, maintain the EDI applications. Once setup, EDI applications generally can be operated with a minimal amount of support resources.
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