ELECTRONIC DATA

INTERCHANGE

Pankaj Thapa

pankajkeith@gmail.co
m
Meaning
• Electronic Data Interchange (EDI) refers to the
structured transmission of data between
organizations by electronic means.
• A way to exchange transcripts (and other
important data) without paper.
• The National Institute of Standards and Technology
in a 1996 publication defines Electronic Data
Interchange as "the computer-to-computer
interchange of strictly formatted messages that
represent documents other than monetary
instruments.
• EDI can be transmitted using any methodology
agreed to by the sender and recipient. This
includes a variety of technologies, including
modem (asynchronous, and bisynchronous), FTP,
Email, HTTP, AS1, AS2, etc
Working of EDI

1. Exchange of data with several trading

partners directly in a standard format.

2. Interaction with multiple companies

through a central information clearing
house. Here each companies add EDI
program to its computer to translate the
company data into standard formats for
transmission, and for reverse
translation in the data.
 Working of EDI cont…
Supplier
One to Many

Manufacture Supplier

Supplier

One to Many

Manufacture Supplier
Third
Manufacture Party Supplier
Vendor
Manufacture Supplier
 EDI Business Cycle
Vendors

Company XYZ
io
n Customer
at
s tin s
e n
I D
a tio
ED n
e sti Branch
ID
ED on Office
Notes, Documents,
D e s tinati
Images, Letters, ED I
Purchase Orders, EDI Service EDI Destination Distributor
Invoice, Queries, s
Order Entry, Network ED I
De s
tinat
Shipment Details, ion
ED
Payment Orders, ID
es Stores
Bankers Advice, ED tin
ID ati
Miscellaneous claims. es on
t in
at
io
n Banks
Computer
with EDI
Transporter
software
s
 Processing of EDI message
External External
User User
Interface Interface

Applicatio Applicatio
n n

Translatio Translatio
n n
Services Services

EDI EDI
Service Service

Network Network
EDI Service
Access Access
Control Network Control
Benefits of EDI
• Generation of a paper document on a form by software
application.
• Delivery of a few copies of document to the internal
dept to be filed and others to the trade partners via
postal service.
• Retyping the document received by the trading
partner on the form into their computers which may
offer introduce errors.

• Generation of a paper acknowledgement and sending

it to the originating company.
• Generation of a file containing the processed
document by the application program.
Benefits of EDI cont…
• Conversion of the document into agreed standard
format.
• Electronic transmission of the file containing the
document over the network , which may link the
originating company and its trading partner.
• Automatic generation of the receipt and its
delivery over the network to the originating
company.
Features of EDI
• Exchange of structured business information in standard
formats between computers.

• It has reduced data entry link, eliminates the need for a

paper bases system and improved business cycle.

• EDI transfer structured business documents internally

among groups of departments or externally with its
suppliers, customers and subsidiaries.

• In EDI, information transferred over a network will not have

to read, retyped or printed but must have predefine
structure agreed between the two company's which send
and receive data.

• The two companies or groups which exchanged information

through EDI are called the Trading Partners.
Components of EDI
There are 3 types of component

1. Application service

2. Translation service
3. Communication service
 Components of EDI cont…

Business Trading
Application Partner

Application Transmissio Communicati

Service n Service on Service
File Types
Edi creates following files as a document passes through the
system:

1. Internal format file (IFF):-

It contains single document for single trading partner.

2. External format file(EFF):-

It contains same data as the internal format file translated into
the appropriate standard document format.

3. Transmission file:-
it contains one or more document for the same trading partner.
Documents of same format are packed into an functional groups.
The functional groups going to one trading partner are packaged
into an interchanged set. An interchanged set. An interchanged
set contains one or more functional groups of documents with
the same sender and receiver.
EDI software
1.Translators:-
Every EDI sender and receiver should have EDI
translator. It varies based on the computer on which
it is going to reside. The computer may be a micro
computer or a midrange or a mainframe. Translator
reads the fixed length file and generates valid Edi
standard and maintains control information.

2.Application link software:-

There are 2 components of software, which is
generally used to link the existing business
application to the EDI data. One is the translator and
the other is application link software . Application link
software is used to collect information from the
business application and then it formats into fixed
length computer file and passes it onto translators.
EDI services

1. Application Services :-

It provides the link between application and EDI.

It allows you to send documents from an EDI
system. The set of callable routine is used to
transfer document from the business application
into EDI document destination can be either
intra-company or to the external companies .
 EDI services cont…

File Server

Internal Format File

Document
Business
Application Document Internal Format File
Callable
Routines

Management - Interface

Application
Service
EDI services

2. Translation service:-

Converts the out going documents from an

internal format file to an agreed external format.

Translates internal document from external

format to EDI internal format file.
 EDI Services cont…
Translation Service

File Server

Internal Format Transmission File

File C External Format File TFB

Internal Format Transmission File

File T External Format File TFS

Management - Interface

C Converter , T Translator
TFB Transmission file Builder , TFS Transmission file Splitter
EDI Services cont…
• 3. Communication service:-

The communication service sends and receives

transmission files to and from the trading
partners either directly or by using party service
called a valued added network(VAN).
EDI Services cont…

Communication
Service

File Server

Transmission File CC Transmission File

Transmission File Transmission File

Gateway 1

Gateway 1

Management - Interface

CC = Communication
Controller
EDI Standards
1. Transaction set standards:-
These defines the procedural format and
content requirement for specified business
transactions. Eg: Purchase orders.

2. Data Dictionary And Segment Dictionary:-

These defines the precise content for data
content and data segment used in building
transaction sets.

3. Transaction control standard:-

These define the format s for the information
required to control the data interchange
Thank you