Data communications and Networks

Data communications refers to the transmission of this digital data between two or more computers
and a computer network or data network is a telecommunications network that allows computers to
exchange data. The physical connection between networked computing devices is established using
either cable media or wireless media. The best-known computer network is the Internet.

What are the types of Computer Networks?

In computer networks, the data is passed in the form of packets. The devices that transmit or receive
this data, such as a phone or a computer, are referred to as nodes. There are three main types of
networks:

1. Local Area Network (LAN): It is usually a small network that is restricted to a small geographic area. A
computer network available only to the residents of a building can be called a LAN.

2. Wide Area Network (WAN): As the name implies, these networks cover a broad range of geographic
area. WANs are used to connect LANs and other types of networks together so that users and
computers can communicate with computers in other regions. An example of a WAN is the much-used
and loved, Internet.

3. Metropolitan Area Network (MAN): MAN is a network that connects the users with computer
resources in a geographic area that is larger than LAN but not quite as large as WAN.

Data communication refers to the exchange of data between a source and a receiver via form of
transmission media such as a wire cable. Data communication is said to be local if communicating
devices are in the same building or a similarly restricted geographical area.

The meanings of source and receiver are very simple. The device that transmits the data is known as
source and the device that receives the transmitted data is known as receiver. Data communication aims
at the transfer of data and maintenance of the data during the process but not the actual generation of
the information at the source and receiver. 

Datum mean the facts information statistics or the like derived by calculation or experimentation. The
facts and information so gathered are processed in accordance with defined systems of procedure. Data
can exist in a variety of forms such as numbers, text, bits and bytes. The Figure is an illustration of a
simple data communication system.

Components of data communication system

A Communication system has following components: 

1. Message: It is the information or data to be communicated. It can consist of text, numbers, pictures,
sound or video or any combination of these.

2. Sender: It is the device/computer that generates and sends that message.

3. Receiver: It is the device or computer that receives the message. The location of receiver computer is
generally different from the sender computer. The distance between sender and receiver depends upon
the types of network used in between.

4. Medium: It is the channel or physical path through which the message is carried from sender to the
receiver. The medium can be wired like twisted pair wire, coaxial cable, fiber-optic cable or wireless like
laser, radio waves, and microwaves.

Data communication four basic terms

 Data: A collection of facts in raw forms that become information after processing.

 Signals: Electric or electromagnetic encoding of data.

 Signaling: Propagation of signals across a communication medium.

 Transmission: Communication of data achieved by the processing of signals.

Protocol
It is a set of rules that govern the communication between the devices. Both sender and receiver follow
same protocols to communicate with each other.

A protocol performs the following functions:

1. Data sequencing. It refers to breaking a long message into smaller packets of fixed size. Data
sequencing rules define the method of numbering packets to detect loss or duplication of packets, and
to correctly identify packets, which belong to same message.

2. Data routing. Data routing defines the most efficient path between the source and destination.

3. Flow control: All machines are not equally efficient in terms of speed. Hence the flow control
regulates the process of sending data between fast sender and slow receiver.

4. Error Control: It ensures that data are transmitted without any error.
 What is Electronic Data Interchange (EDI)?
Electronic Data Interchange (EDI) is the electronic interchange of business information using a
standardized format; a process which allows one company to send information to another company
electronically rather than with paper. Business entities conducting business electronically are called
trading partners.

Many business documents can be exchanged using EDI, but the two most common are purchase orders
and invoices. At a minimum, EDI replaces the mail preparation and handling associated with traditional
business communication. However, the real power of EDI is that it standardizes the information
communicated in business documents, which makes possible a "paperless" exchange.

The traditional invoice illustrates what this can mean. Most companies create invoices using a computer
system, print a paper copy of the invoice and mail it to the customer. Upon receipt, the customer
frequently marks up the invoice and enters it into its own computer system. The entire process is
nothing more than the transfer of information from the seller's computer to the customer's computer.
EDI makes it possible to minimize or even eliminate the manual steps involved in this transfer.

The process improvements that EDI offers are significant and can be dramatic. For example, consider the
difference between the traditional paper purchase order and its electronic counterpart:

A Traditional Document Exchange of a Purchase Order An EDI Document Exchange of a Purchase Order

This process normally takes between three and five This process normally occurs overnight and can
days. take less than an hour.

Buyer makes a buying decision, creates the purchase Buyer makes a buying decision, creates the
order and prints it. purchase order but does not print it.

Buyer mails the purchase order to the supplier.
Supplier receives the purchase order and enters it into
the order entry system.
Buyer calls supplier to determine if purchase order has
been received, or supplier mails buyer an
acknowledgment of the order.
EDI software creates an electronic version of the
purchase order and transmits it automatically to
the supplier.
Supplier's order entry system receives the
purchase order and updates the system
immediately on receipt.
Supplier's order entry system creates an
acknowledgment an transmits it back to confirm
receipt.

The Need for EDI

For companies of any size, implementing EDI is necessary for maximum competitiveness and growth. It
reduces costs and improves operational performance across your organization. From the start, EDI
accelerates data exchange and sharpens accuracy. Your company and your customers benefit from
streamlined administration, improved information flow, more accurate accounting, better inventory
management, and lower costs. Because electronic transactions are so efficient, customers that use EDI
prefer to work with vendors that have EDI systems in place.
From financial, operational, and technical perspectives, the right EDI solution makes irrefutable business
sense.

Key Benefits of EDI:

EDI uses established standards that enable your company to electronically exchange business
documents with customers, suppliers, and business partners—speeding up your business cycles while
eliminating the costs of manual entry errors.

More agility: Instant access to transaction statuses grant greater insight that enables you to make faster,
more informed decisions and respond quickly to changing conditions.

Faster business cycles: Faster delivery–invoice–payment cycles speed up cash flow and inventory
turnover.

Reliable standards: Common business communication standards (VDA/ODETTE/EDIFACT/ANSI) make it

possible to do business anywhere in the world.

Time savings: EDI enables you to coordinate with customers and suppliers around the world in a matter
of seconds and eliminate time-consuming manual processes.

Less errors: Data are stored and manipulated electronically, without the risk of manual errors from data
re-entry."