introduction to information systems: whiteley palgrave chapter 9 edi systems

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introduction to information systems whiteley /
palgrave chapter 9 edi systems
electronic data interchange
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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• e-Commerce
• Electronic Commerce is a general concept
  covering any form of business transaction or
  information exchange executed using information
  and communications technologies, between
  companies, between companies and their customers
  or between companies and public administration.
•   Electronic commerce includes electronic trading
  of goods, services and electronic material.
• (Espirit, 1997)

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• e-Commerce uses three different technologies
•  
• Electronic data interchange (EDI). Used for
  regular and repeated, business-to-business
  transactions.
• Internet commerce. Used for one-off
  business-to-business or business-to-consumer
  transactions.
• Electronic markets. Used to allow the customer
  to choose the best offering from a range of
  similar, competitive products.
•  

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• e-Commerce Technologies

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI is sometimes called paperless trading. It is
  used for trade transactions such as orders and
  invoices.
• More formally it can be defined as
•  
• The transfer of structured data,
• by agreed message standards,
• from one computer system to another,
• by electronic means.
• (IDEA) 

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI is used for the transfer of structured data.
• This means formal documents such as an order.
• The order consists of an order header,
  specifying
• Customer possibly using a Customer No.
• Supplier possibly using a Supplier No.
• Order Number, etc.
• Order lines specifying
• Product possibly using a Product Code
• Quantity.
• Codes increase precision and reduce the volume of
  data.

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI agreed message standards are system and
  machine independent.
• Examples of EDI standards are
•  
• Tradercoms a UK standard for general
  merchandise.
• Odette a European standard used by the vehicle
  assemblers.
• ANSI X12 a general American standard.
• EDIFACT the United Nations international
  standard for all trade sectors.

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• Example EDIFACT order
• UNH000001ORDERS2932UN'
• BGM220AC6464X'
• DTM420031028102'
• NADBY646400191'
• NADSU114100691'
• UNSD'
• LIN10333997662VP'
• QTY2110'
• LIN20333792270VP'
• QTY213'
• UNT11000001'  
•  

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI messages are sent from one computer system to
  another without the need for manual intervention.
• Some small suppliers may not have fully automated
  systems and could simply print out the EDI order.
• EDI will also be used for other trade
  transactions such as delivery note, invoice and
  payment.

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI messages are sent by electronic means
• Direct (dial-up) connection.
• Internet.
• Value added data service (VADS / VAN).
• The VADS provides
• Time independence.
• Protocol independence.
• Using a post and forward network.

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• VADS

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI software
•  
• Translate transaction into the EDI format and
  transmit into the network.
• Interrogate the network for any EDI messages,
  retrieve them and then translate for the
  application.
•  
• The normal approach is to buy EDI software.
• Interfacing an application to EDI is normally a
  sizeable (and hence expensive) undertaking.

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI agreement specifying
•  
• The EDI standards to be used.
• The codes to be used for products, customers,
  suppliers, etc.
• The network to be used.
• The frequency of the interchange
• How any disputes are to be resolved.

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• The EDI trading system
•  

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• Large EDI Users include
•  
• Multiple retailers, e.g. supermarkets.
• Assembly manufacturers, e.g. car makers.
•  
• Other users are diverse, examples are
•  
• Inland Revenue.
• Dentists claiming NHS fees.

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introduction to information systems whiteley /
palgrave chapter 9 edi systems

• EDI Advantages
•  
• Speed of transaction.
• Error reduction no keying errors.
• Cost cutting no data entry staff.
• Reduced stock holding just-in-time
• Business opportunities.
• Cash flow quicker payment of invoices.