Electronic Data Interchange- Benefits-EDI Legal, Security & privacy issues- EDI softwareimplementation-

Value added networks-Internal Information Systems-Work flow automization and Coordination-Customization

and Internal Commerce.
Electronic Data Interchange
EDI stands for Electronic Data Interchange. Electronic data interchange (EDI) is the computer-to-computer
exchange of business documents between companies. EDI replaces the faxing and mailing of paper documents.
EDI documents use specific computer record formats that are based on widely accepted standards. However,
each company will use the flexibility allowed by the standards in a unique way that fits their business needs.
Benefits of EDI:
It’s fast – streamlined business processes mean that documents can be exchanged in minutes
It’s accurate – manual data entry errors are eliminated
It’s secure – you receive confirmation that your documents have arrived safely
It cuts costs – of printing, copying, filing, storage and postage, and of repetitive, labour intensive tasks,
administration and disputes caused by data entry errors
It happens in real-time – informing and speeding up business decisions and response times
It’s great for business – you’re part of a connected trading community and can build more productive
relationships with suppliers and customers alike
It’s great for cash flow – payment schedules are shorter and more reliable
It’s flexible – you can integrate your EDI system with your back office accounts, warehouse or ERP systems for
more business efficiencies
It’s liberating! – you’re free to concentrate on high value tasks, like customer service, sales and marketing and
product development.
EDI: LEGAL, SECURITY AND PRIVACY ISSUES
In EDI, Trading is done between countries and corporations.
• In EDI, legal issues and computer security are important.
• Companies that deal with EDI should take the services of a lawyer during the design of EDI
applications, so that evidentiary/admissibility safeguards are implemented.
There are 3 types of communications when considered for EDI issues:
1) Instantaneous: – If the parties are face to face or use an instantaneous communication medium such as
telephone.
2) Delayed with postal service: – The mailbox rule provides that an acceptance communicated via
postal service mail is effectively communicated when dispatched or physically deposited.
3) Delayed with non postal service: – EX: – Couriers, telegram.
Messaging systems combine features of delayed and instantaneous
• Messaging delay is a function of the specific applications, message routing, networks traversed, system
configuration and other technical factors.
One way of legal & security issue is Digital signatures. The technical uses of digital signatures are :-
1. Messages are time- stamped or digitally notarized to establish dates and times at which a recipient hard
access or even read a particular message.
2. These signatures are to replace handwritten signatures, as it is same legal status as handwritten signatures.
3. Digital signatures should have greater legal authority than handwritten signatures.
9 key steps to have the best results while implementing EDI
The following will help you to determine all the areas that will be potentially impacted by an EDI initiative, and
that will require your attention:
1- INVESTIGATE YOUR ERP(Enterprise resource planning )OR POS (point of sale) SYSTEM: Investigate
the primary ERP or POS system to determine what information can be processed, generated and imported by
the system.
2- SURVEY TRADING PARTNERS: Investigate all your supply chain trading partners in order to identify
those who are EDI capable, and the EDI transactions they require.
3- GAP ANALYSIS: Perform a gap analysis to evaluate what information is readily available and what
information is required for your EDI transactions, based on your business requirements.
4- SEQUENCE DIAGRAM: Create a ‘sequence diagram’ to describe the flow of data between each step of the
processes. This will allow you to determine which processes are impacted, and where the data will be going.
5- MAPPING REQUIREMENTS: Prepare mapping requirements to provide your trading partners so they are
able to determine what information will be exchanged.
6- INITIAL VENDOR TESTING: Identify a group of vendors or one important vendor for initial testing
purposes.
7- LAUNCH LETTER: Inform your vendors of your EDI initiative by sending out an EDI initiative launch
letter.
8- ROLL-OUT AGENDA: Prepare a schedule and determine timelines for your roll-out.
9- ROLL-OUT TESTING AND SET-UP: Document and set-up the testing process.

Value Added Network

Definition: A VAN (value added network) is a private network provider that focuses on offering network
services such as secure email, message encryption and management reporting. Their goal is to facilitate EDI
(electronic data interchange) among online companies, providing a convenient way for ecommerce businesses
to securely communicate and share data.
Advantages:
1. Faster transaction processing
A VAN can improve the speed at which transactions are completed. By transmitting data electronically,
information moves instantly from point A to point B, providing faster access to operating information. Though a
VAN transports messages similar to a cable Internet connection, its “value” comes in the form of audit
information added to messages. Data may be modified as it passes through an error detection and correction
process and during conversion between communication protocols, such as TCP (Transmission Control Protocol)
and FTP(File Transfer Protocol ).
2. Better Communication
Compared to a manual processing system, a VAN reduces the costs associated with business
communications. It decreases the need for paper transfers, and allows tasks such as ordering inventory and
processing payments to be completed more efficiently through electronic means. Today’s VAN provides a host
of Web services, such as network performance monitoring and directory management. It also supports Web
technology standards, such as XML. VANs have evolved to accommodate the latest e-commerce applications,
but their basic principle of providing dependable and secure communications across a network endures.
3. Cost of Implementation
Like many technology upgrades or implementations, the addition of a VAN may not be cost effective for
many small to medium-sized businesses. It’s important that knowledgeable personnel are involved in the
conversion to a VAN, and these individuals should also provide training to your staff on the applications the
network will support. Another option is to obtain VAN services from a third party that specializes in these types
of IT solutions. All of these considerations can carry a prohibitive price tag that may be out of reach for certain
businesses.
4. Ongoing Network Support
A VAN, like most computer technologies, requires ongoing technical support and maintenance. Your
business may need to hire experienced staff to manage an in-house network, or may need to utilize the services
of an independent support provider for an outsourced network solution. Ongoing maintenance increases the cost
of using the network and adds complexities to your operations that need to be managed appropriately.
Ultimately, your company will only benefit if the advantages derived from a VAN outweigh its disadvantages.
5. Safety and Reliability
As a system specifically designed for secure data transfer, the information architecture behind most VANs,
including everything from encryption methods to safe data transfer protocols, tends to be far more sophisticated
than your average firewall or network security set-up.
Disadvantages:
1. Cost and Installation (fixing)
The added features available on a VAN are not free. In fact, many of the most sophisticated VANs can be
quite expensive, charging subscription costs or data-transfer rates.
2. Double Edged sword of VAN use.
Given the added cost of contracting the service, VAN systems are most often found in larger
corporations and e-commerce sites.
VAN can also make communication more complicated with small players that rely on simpler data-
transfer methods. Small businesses are often forced to keep their old systems running after contracting a VAN in
order to communicate with some of their smaller partners and afiliates.
WORK FLOW AUTOMIZATION AND COORDINATION
Speeding up or automating routine business tasks have come to be known as work flow automation.
1. Supplier/Vendor On boarding Processes
Most of the reputed e-Commerce companies have robust processes for instantly and precisely on-boarding new
suppliers and vendors into their operations. With the use of spreadsheets and email, one can execute the
supplier/vendor on-boarding and approval processes. But this technique can cost you a lot of time as it can slow
down the things and lead you towards the inconsistent data because the spreadsheet works via the emails. In such
situations, you should integrate the workflow automation that can accelerate and streamline supplier/vendor on
boarding processes and bring consistency and precision in data as well.
2. Item Listings Approval
The procedure of listing new items on an e-Commerce site usually involves various internal approvals before
they get online. So, you must automate this process if you want to fend off inconsistencies and improve the
speed of your e-Commerce site.
3. Purchase Order Approvals
Workflow automation is an incredible technology that can help you modify your purchase order approvals with
ease. The automated approvals are based on item category, value, vendor credit rating and a lot to offer you
efficient and precise purchases.
4. Refund Claims
Refunds are one of the most disappointing situations for e-Commerce companies. When web customers register
claims for refunds, it usually ends up as an email in someone’s inbox. There are many new e-Commerce sites,
execute these processes manually – this not only consumes a lot of time and effort but also affect the brand
image of the company as there might be inaccuracies and delays in refunding processes. Well, you can automate
this process just by opting for workflow software that offers “Service Level Agreement” (SLA) tracking
functionality.
5. Web Customer Complaints
Delays in refunding processing can create social media fires and also downturn the reputation of your
company on the web. On the other side, non-financial complaints and bad feedback can destroy the remaining
brand value over time. Therefore, it is essential to automate the complaints and feedback processes if you want to
solve your customer’s problem quickly and efficiently.
WORKFLOW COORDINATION
Business Efficiencies - Workflow Co-ordination can help realise significant operational savings.
Business Process Automation often leads to Workflow Co-ordination. Several buzz words that are commonly
thrown around to describe the general objective of the business workflow include "Streamline Operations",
"Reduce Operating Expenses", and "Cut Labor Costs".
The processes, procedures and methods that businesses employee for handling operational tasks such as
invoicing, timesheets, new account setup, status reports, and others can be described with the term "Workflow".
Each business tackles workflow uniquely and often forms part of their competitive advantage. Workflow
includes the routine steps, human resources, necessary information, and mechanisms needed to complete each
step in a business process.
As companies experience growth, manual workarounds often take hold which invariably costs time.
With the loss of time comes an inherent disorganisation leading to problems such as missing paperwork, pushed
back deadlines, incomplete or incorrect information or data, and extended project or task timeframes. The
equation is simple; time = money.
The solution is simpler than many may think. What we do is assess the "to-do" list of the process
involved, place it in a location that everyone can get to (usually the intranet or internet), and add a few smarts
including visual status tracking, due date monitoring, business rules, and email and database capabilities and
suddenly the system is keeping track and doing most of the tedious tasks for you.
Customization and Internal Commerce.
Customization refers to the process of making modifications to something to be appropriate for a particular
task or individual. In other words, customization involves making changes to personal or individual preferences
or specifications.
 Internal commerce refers to the trade carried on among individuals in the same state. It can be within
the same area of the state or various parts of the same state.