Electronic Data Interchange
Electronic Data Interchange (EDI) refers to the structured transmission of data between organizations by electronic means.
It is used to transfer electronic documents from one computer system to another (ie) from one trading partner to another trading partner.
It is more than mere E-mail; for instance, organizations might replace bills of lading and even checks with appropriate EDI messages.
It also refers specifically to a family of standards, including the X12 series. However, EDI also exhibits its pre-Internet roots,
and the standards tend to focus on ASCII (American Standard Code for Information Interchange)-formatted single messages rather than
the whole sequence of conditions and exchanges that make up an inter-organization business process.
In 1992, a survey of Canadian businesses found at least 140 that had adopted some form of EDI, but that many (in the sample)
"had not benefited from implementing EDI, and that they had in fact been disadvantaged by it."
The National Institute of Standards and Technology in a 1996 publication [1] defines Electronic Data Interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media.". It goes on further to say that "In EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing."
EDI can be formally defined as 'The transfer of structured data, by agreed message standards, from one computer system to another without human intervention'. Most other definitions used are variations on this theme. Even in this era of technologies such as XML web services, the Internet and the World Wide Web, EDI is still the data format used by the vast majority of electronic commerce transactions in the world.
Standards:
Generally speaking, EDI is considered to be a technical representation of a business conversation between two entities, either internal or external.
Note, there is a perception that "EDI" constitutes the entire electronic data interchange paradigm, including the transmission, message flow,
document format, and software used to interpret the documents. EDI is considered to describe the rigorously standardized format of electronic documents.
The EDI standards were designed to be independent of communication and software technologies. 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. It is important to differentiate between the EDI documents and the methods for transmitting them.
When they compared the bisynchronous protocol 2400 bit/s modems, CLEO devices, and value-added networks used to transmit EDI documents
to transmitting via the Internet, some people equated the non-Internet technologies with EDI and predicted erroneously that EDI itself
would be replaced along with the non-Internet technologies. These non-internet transmission methods are being replaced by Internet
Protocols such as FTP, telnet, and E-mail, but the EDI documents themselves still remain.
As more trading partners use the Internet for transmission, standards have emerged. In 2002, the IETF published RFC 3335, offering a
standardized, secure method of transferring EDI data via e-mail. On July 12, 2005, an IETF working group ratified RFC4130 for
MIME-based HTTP EDIINT (aka. AS2) transfers, and is preparing similar documents for FTP transfers (aka. AS3). While some EDI
transmission has moved to these newer protocols the providers of the value-added networks remain active.
EDI documents generally contain the same information that would normally be found in a paper document used for the same organizational
function. For example an EDI 940 ship-from-warehouse order is used by a manufacturer to tell a warehouse to ship product to a retailer.
It typically has a ship to address, bill to address, a list of product numbers (usually a UPC code) and quantities.
It may have other information if the parties agree to include it. However, EDI is not confined to just business data related to trade,
but encompasses all fields such as medicine (e.g., patient records and laboratory results), transport (e.g., container and modal information),
engineering and construction, etc. In some cases, EDI will be used to create a new business information flow (that was not a paper flow before).
This is the case in the Advanced Shipment Notification (856) which was designed to inform the receiver of a shipment, the goods to be received
and how the goods are packaged.
There are four major sets of EDI standards:
- The UN-recommended UN/EDIFACT is the only international standard and is predominant outside of North America.
- The US standard ANSI ASC X12 (X12) is predominant in North America.
- The TRADACOMS standard developed by the ANA (Article Numbering Association) is predominant in the UK retail industry.
- The ODETTE standard used within the European automotive industry
All of these standards first appeared in the early to mid 1980s. The standards prescribe the formats, character sets,
and data elements used in the exchange of business documents and forms. The complete X12 Document List includes all major business documents,
including purchase orders (called "ORDERS" in UN/EDIFACT and an "850" in X12) and invoices (called "INVOIC" in UN/EDIFACT and an "810" in X12).
The EDI standard says which pieces of information are mandatory for a particular document, which pieces are optional and give the rules
for the structure of the document. The standards are like building codes. Just as two kitchens can be built "to code" but look completely different,
two EDI documents can follow the same standard and contain different sets of information. For example a food company may indicate a product's
expiration date while a clothing manufacturer would choose to send color and size information.
Standards are generally updated each year.
Specifications:
Organizations that send or receive documents between each other are referred to as "trading partners" in EDI terminology.
The trading partners agree on the specific information to be transmitted and how it should be used. This is done in human
readable specifications (also called Message Implementation Guidelines). While the standards are analogous to building codes,
the specifications are analogous to blue prints. (The specification may also be called a mapping but the term mapping is typically
reserved for specific machine readable instructions given to the translation software.) Larger trading "hubs" have existing Message
Implementation Guidelines which mirror their business processes for processing EDI and they are usually unwilling to modify their
EDI business practices to meet the needs of their trading partners. Often in a large company these EDI guidelines will be written
to be generic enough to be used by different branches or divisions and therefore will contain information not needed for a particular
business document exchange. For other large companies, they may create separate EDI guidelines for each branch/division.
See Also:
References
- Bergeron, François; Louis Raymond (1992). "The advantages of electronic data interchange". ACM SIGMIS Database. 19..31. http://doi.acm.org/10.1145/146553.146556.
- Kantor, Michael; James H. Burrows (1996-04-29). "ELECTRONIC DATA INTERCHANGE (EDI)". National Institute of Standards and Technology. http://www.itl.nist.gov/fipspubs/fip161-2.htm. Retrieved on 2008-05-13.
- North Dakota Medicaid Companion Guide
- Wisconsin Medicaid EDI Information
- Nebraska Medicaid Submission Requirements
- Wikipedia.org
