Electronic data interchange (edi): definition*, technical aspects, business implications
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software to a customer's accounts receivable software. This definition includes the direct transmission of data between locations, transmission using an intermediary such as a communication network, and the exchange of digital storage devices such as magnetic tapes, diskettes, and CD-ROMs.
EDI is one of the most important subsets of electronic commerce —the use of computer and telecommunication technology to facilitate the information exchange between two parties in a commercial transaction. The intent of all electronic commerce is to automate business processes. Some transactions can be completely paperless and move data from one computer application to another computer application. By strict definition EDI falls under this type of electronic commerce. Other electronic commerce transactions are also paperless but involve manual intervention. Examples are Internet transactions requiring one party to enter data manually. Electronic mail is another example of paperless but manual electronic commerce. Sometimes firms claim to be doing EDI when they are really performing a manual-to-computer transaction such as electronic order entry.
Another form of electronic commerce is based on physical media interacting with computers and telecommunications processes. Examples of this third type are facsimile transmission (paper plus telecommunications) and processes that involve information captured by bar coding, optical character recognition, and radio frequency tagging.
Exhibit I shows how EDI contrasts with facsimile transmission (fax) and electronic mail (e-mail). Fax is the transfer of totally unstructured data. With fax, a digitized image of a paper document is transmitted. While mail time delays are avoided, the receiver of a facsimile transmission would not be able to enter the image directly into a computer program without rekeying. E-mail also moves data electronically but is designed for person-to-person applications. It uses a free format rather than a structured format. A party receiving an e-mail purchase order, for example, would not likely be able to automatically read it into an order entry program, and would most likely have
EDI is one of the most important subsets of electronic commerce —the use of computer and telecommunication technology to facilitate the information exchange between two parties in a commercial transaction. The intent of all electronic commerce is to automate business processes. Some transactions can be completely paperless and move data from one computer application to another computer application. By strict definition EDI falls under this type of electronic commerce. Other electronic commerce transactions are also paperless but involve manual intervention. Examples are Internet transactions requiring one party to enter data manually. Electronic mail is another example of paperless but manual electronic commerce. Sometimes firms claim to be doing EDI when they are really performing a manual-to-computer transaction such as electronic order entry.
Another form of electronic commerce is based on physical media interacting with computers and telecommunications processes. Examples of this third type are facsimile transmission (paper plus telecommunications) and processes that involve information captured by bar coding, optical character recognition, and radio frequency tagging.
Exhibit I shows how EDI contrasts with facsimile transmission (fax) and electronic mail (e-mail). Fax is the transfer of totally unstructured data. With fax, a digitized image of a paper document is transmitted. While mail time delays are avoided, the receiver of a facsimile transmission would not be able to enter the image directly into a computer program without rekeying. E-mail also moves data electronically but is designed for person-to-person applications. It uses a free format rather than a structured format. A party receiving an e-mail purchase order, for example, would not likely be able to automatically read it into an order entry program, and would most likely have
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