Electronic Data Interchange

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Project Proposal for ISQS 3349
Instructor: Zhangxi Lin
Group X:

Carmie Pierce
Kelly Ragsdale
Steve Prichard

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For proposal in MS Word format click HERE

Project Proposal: EDI

Technology is advancing everyday. Individuals and businesses alike are impacted by the many changes. In order for businesses to remain competitive, it’s imperative that they adopt a standardized communication process with their trading partners. The process we recommend is EDI.

We want to increase people’s awareness of EDI and stress its potential as a wave of the future. Our presentation will include a briefing of EDI’s past, present, and future, and the possible benefits an organization can achieve once EDI is implemented. We will also provide a prototype and the system requirements for implementation.

EDI stands for Electronic Data Interchange. This is the computer to computer exchange of business documents between trading partners using a standard format. This process will create a paperless environment for the day-to-day business transactions. EDI is easily integrated with current business systems. Since it is based on a message standard, it will not limit any participants.

EDI has been in use for at least 20 years. The start of EDI evolved around the 1960s after many industries wanted industry standards for applications such as transportation, purchasing, and financial that all companies could follow. Each industry wanted its own set of standards since no industry functions under the same kinds of principles. Later in the 1970s, American National Standards Institute’s committee X12 created a standardized document for the industries for the start of using electronic data interchange. The primary organizations that contributed in this creation were Transportation of Data Coordinating Committee and the National Association of Credit Management's Credit Research Foundation. In 1983 five American National Document formats for electronic data interchange were published from ANSI. These five formats paved the way for over a hundred documented standards that are used by many companies today and for its continued growth. The use of EDI in the U.S. has grown steadily. Nearly one quarter of those surveyed in 1993 anticipated implementing EDI within two years and 20% were already using EDI. By 1993, EDI was the second most common means of exchanging business documents in the U.S.. Paper remained number one, but had fallen by nearly 50% since 1988

Today, there are several industries implementing EDI. Some companies offer their trading partners discounts if they will use the EDI standards for their transactions. There are even companies that will charge their trading partners if they are not EDI compliant. EDI offers many significant benefits to those who fully implement and integrate it into other applications. EDI reduces reliance on paper, reducing company costs for purchasing and then storing paper. It moves product to market more quickly by accelerating the purchase order-invoice-payment order cycle from days or weeks to hours, even minutes. EDI offers process improvement and quality assurance benefits through improving the way in which companies handle information.

The growth of EDI will undoubtedly continue and many thousands of users are expected to take advantage of EDI in the coming years. Trading opportunities, which do not exist in the old paper world, can be identified with business information now available to be passed almost immediately between business partners irrespective of geographical boundaries. EDI is becoming more and more an integral part of the business strategy of companies and is undoubtedly changing the way business is done. Thus, the future will see many more companies implementing EDI. Technology will improve and streamline the process making it faster and more efficient.

There are several advantages for companies to send their transactions via EDI. It will lower overall business costs, reduce lead-time, and increase efficiency and accuracy. These benefits and more explain why most businesses are choosing to implement EDI. There is almost an instantaneous return on investment upon "go-live".

Implementation of EDI will differ depending on the volume of transactions a company produces. Companies such as Wal-Mart will have a very diverse system than that of a small mom-and-pops grocery store. There are several different ways to bring EDI into a company. We will provide a prototype that will explain the process flow and its integration with the current business system.

As most of us will be searching for jobs in the near future, knowledge of modern technology is crucial. An understanding of EDI will give graduates a competitive edge in the job market. We feel it is essential to present this information to the class and help prepare them for the future.

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