Information Sharing

EDI - Electronic Data Interchange

Many businesses now use their networks for Electronic Data Interchange (EDI) and to create an online shopping system.

Many companies work collaboratively with other companies and convert their data and documents into a standard format before transferring them across a network.  This process is an example of EDI.

Definition

EDI is the computer-to-computer exchange of business documents in a standard electronic format between business partners 

Advantages to business of using EDI

Automated Data Entry - Data is entered automatically by EDI software.  For instance, when purchase order (PO) from one company is received by another company.  Sales Order (SO) is automatically generated at other company's system with the help of EDI software.

Receipt Verification - Receipt verification can easily be done with help of EDI software.  No human intervention is involved so there are minimal chances of error or delay.

Data Validation - Data validation is automatically done.

Availability of Free Software - Free software is (PDF) available depending upon the EDI format chosen.

Low Cost - Lower administrative, resource and maintenance cost.  Building long-term relationships - EDI helps in building long term relationships with trading partners and hence helps in business growth.

Cost effective - Cutting paper and all paper processing quickly reduces paper cost. (paper buying, post cost, proof reading costs, document storage costs)

Environmental issues - Less use of paper/ink etc

Speed - The electronic transfer of data ensures more consistency and accuracy without sacrificing pace/ immediate transmission of shipping notices

Service - Faster processing means better customer service, over all; helping a company expand their customer base; improves relationship with customer as kept better informed

Disadvantages to business of using EDI

Expensive - Setup and maintenance of some of the formats of EDI is expensive

Initial setup is time consuming - Initial setup of EDI is time consuming

EDI standard charges - The business process depends on EDI standard format.  If any of the standard format changes then the business process has to be changed accordingly.

System electronic protection - An EDI system needs electronic protection from viruses, hacking, malware and other frauds.

Staff training Cost - Staff need training in order to run EDI enabled software

Proper Backups should be Maintained - as the whole data depends on EDI.  In case of any crash of the EDI system, proper backup has to be maintained and extra cost is required for it.

Limits your trading partners - Some organisations stops business which don't use EDI

FTP (FILE TRANSFER PROTOCOL)

FTP is used for the distribution of information between a business and other organisations.

FTP is a standard set of rules that have been established to allow the exchange of (large) files over the Internet. 

OR

FTP (File Transfer Protocol) is a standard Internet protocol providing a simple way of transferring files between computers using the Internet, (by a process which bunches the data into packages and sends messages back and forth to say each package has been received.)

ADVANTAGES to a Company

• You are not limited to file size unlike with email attachments

• Allows reliable transfer of files between platforms

• Greater security in transfer of information

• Can have greater control of remote computer (if well developed).

EXAMPLES OF FTP

• Used for uploading a database of sales from one branch of the organisation to the head office

• Used for down/uploading a website from/onto the internet Used for uploading a database of sales from one branch of the organisation to the head office

• Distribute information between the company and their customers and suppliers 

• Used for down/uploading a website from/onto the internet/server.

• Or other relevant example  e.g. Transfer files from mac to pc.