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What
is EDI?
Today,
a majority of the data in commercial paper documents is generated
from existing computer applications. These paper documents are printed
and copied before the information they contain is finally communicated
by mail or fax. The business partner in turn, re-keys all this information
into another computer application for further processing. An increasing
number of companies have found the above process extremely slow, costly
and unreliable. The need for a faster, cheaper and more accurate solution
for exchanging commercial data has become a significant priority for
many companies and organizations.
EDI
or Electronic Data Interchange can be conceptualized as paperless
trading. A common and useful definition for EDI is:
"the
transfer of structured data, by agreed message standards, from one
computer application to another by electronic means and with a minimum
of human intervention."
The
structuring of data by agreed message standards implies that the
data or information to be exchanged is recognisable, both in content,
meaning, and format, allowing it to be processed automatically and
unambiguously by computers. Two companies deciding to implement
EDI are by definition agreeing on the type of data they will exchange,
and how the data will be presented. The implementation of EDI demands
a much greater degree of co-operation, collaboration and a sharing
of information between business partners, effectively building trading
partner relationships
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