Slide 1 - School of Computer Science _ IT _SCSIT_

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					Electronic Data Interchange
(An in depth Analysis of
Technological and Security Issues)
                   Presented by
                 Vinod Kumar Jain
          Student, M. Tech (CS by Research)
                SCSIT, DAVV, Indore
Presentation Overview
   Conceptual Framework of EDI
   Historical Background of EDI
   Generations of EDI
   EDI Process
   EDI Standards
   Advantages of EDI
   Applications of EDI
   Limitations of EDI
   EDI System Planning Life Cycle
   Analysis of IS Environment
   Determination of EDI Opportunities
   EDI Issues
   Cost/Benefit Analysis
   Risk Assessment
   EDI Technology Infrastructure Considerations
   Development of EDI Implementation Plan
   Conclusion

   To study the technological Aspects of EDI
   To Propose system Planning for EDI
    implementations on the basis of available
    literature and case studies.
   To study data security and EDI messaging
   To Propose best security algorithm for EDI
    data Security
Electronic Data Interchange
 EDI is the electronic transfer of information between
 two trading partner’s systems using a set of
 transactions that have been adopted as a national
 or international standard for the particular business

 EDI is the computer-to-computer exchange of
 standardized business documents, such as
 purchase orders, product information and invoices
 or EFT.
    Historical Development
   Developed in 1960's to help organizations to interact more
    economically with channel partners.
   Reduced time, reduced errors, reduced labor was expected.
   In 1968,a small group of shippers and carriers gathered and formed
    Transportation Data Coordinating Committee (TDCC ).
   In 1979, several Industry groups led by credit research foundation
    (CRF ), petitioned the ANSI and formed Accredited Standard
    Committee X12 Standards to exchange the information.
   In 1987, a world wide accepted UN/EDIFACT standard for
    exchanging electronic data was developed.
   Less than 5% businesses implemented EDI during 90's.
   Even Today, world wide only 12% of the business houses have
    implemented EDI.
Generations of EDI

                               Time Intensive

            People Intensive
First Generation

  Paper documents were prepared, mailed
  through postal system, then opened, sorted
  and key punched by the recipient.

     This process requires more HR.

  Resulting into more errors due to re-keying of


  Most of the businesses were telephone

                  The Transcript Trail


                                    Mail   Transcript


                       Request                          Information
                       Transcript                       System
Second Generation


Email, Fax and Voice mails were used as
the means of information exchange.

But all of these requires Human Intervention
which leads to inefficiency, error introduction,
loss of time.
Third Generation



Third Generation
 Agreement for usage of same data formats
 resulted onto a significant reduction in errors
 and re-work expenses.

 For exchange of data TRANSPORTATION DATA

 created and due to early success of this various
 other standards like Uniform Communications
 Standards    (UCS),      Warehouse      Network
 Standards (WNS) were created.
The Transcript Trail with EDI


                                     U.S. Mail   Transcript



                       Request                                Information
                       Transcript                             System
The EDI Process
   EDI is a multi-directional, electronic transmission of
    information, using standardized formats, and typically
    involves the following processes:

   The sender creates internal information of a data file for

   The data file then is entered into a software program
    called an EDI translator, which transforms the
    message into an EDI standard message, known as an
    EDI document.
The EDI Process (cont..)

• The resulting document is then transmitted by the
  sender to the receiver over the Internet or private
– The process is reversed at the receiving end.
– The EDI document is inputted into the EDI
  translator that translates the data from its current
  EDI format into a file that can be assembled or
  mapped into the receiver’s computer system.
– It also creates a functional acknowledgment,
  which is transmitted back to the sender. A
  functional acknowledgment only represents the



              Telecommunication   Computer System
                access - modem          &
EDI Standards
   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
Advantages Of EDI
   Quick access to Information.
   Better customer service.
   Reduced paper work.
   Better communication.
   Increased productivity.
   Cost efficiency.
   Accurate and improved billing.
   Faster order placement.
   Reduction in error.
       Limitations of EDI

   Firms have to incur extra cost for hiring and
    training staff.
   Needs highly structured protocols.
   Added security cost to safe guard confidential
    information from unauthorized access.
   It does not allows consumers to communicate or
    transact with vendors in an easy way.
Applications Of EDI
Companies continually reviews and adds new EDI transactions
based on the business initiatives, market needs and
recommendations from business partners.

Currently, Companies uses EDI for the following business
applications and much more... Administration - product catalogs
and price lists

Sales Analysis - sales and inventory information Purchasing/Order
Management - orders, acknowledgments, order status, and changes

Shipping and Receiving - shipping, notification, proof of delivery,
and customs information Billing - invoicing and statements Payment
Applications - payment remittance
EDI System Planning Life Cycle

    Determine Business and Information Needs
     Analyze Business Environment
     Determine EDI planning Scope and Objectives
     Analyze IS environment
    Define EDI Targets
     Determination of EDI Opportunities
     Define EDI Target Application
    Define and Select EDI Strategies
     Develop EDI Strategies
    Develop Implementation Plan
    System Planning for EDI Implementations
     Analysis of IS Environment

   Developing an understanding of Existing IS Environment which includes
    Application Systems, Technology Infrastructure and Organizational

   Assessment of Current IS Environment to form a basis for Identification
    of EDI opportunities, Development of EDI Strategy and Formulation of
    Migration Approach.
System Planning for EDI Implementations…
 Determination of EDI Opportunities

    Development of detailed understanding of organization’s
     business environment at business process level
    Defining Business process uses of Data
    Identification of Opportunities in Using EDI to support
     Organization’s business needs and Strategic Initiatives which
     Understanding organization’s core business functions
      Optimization and coordination of information flows between the
     organization and its trading partners through external linkage
    System Planning for EDI Implementations…
    EDI Issues

   Integration of EDI in Application Software

   A modification of the processing logic of some existing applications together
    with development of Some new applications

   A complete redesign and development of an organization’s application
System Planning for EDI Implementations…
Cost/Benefit Analysis
     A proper understanding and estimation of beefit is to be carried against
      the cost of EDI Implementation

 Tactical Benefits                       Strategic Benefits
 Better Product Awareness                Product ior service differentiation
 Improved Customer Support               Competitive Corporate Cost Structure
 Efficient Information Delivery          Penetration of new Markets
 Shortened Product development time      Increased responsiveness to customers
 Improved Quality Control                Improved customer relations and loyalty
 Reduced inventories                     Reduced bargaining powers of buyers
                                         and suppliers
 Improved relationships with suppliers   Strengthen supplier alliance
System Planning for EDI Implementations…
Risk Assesment
   The following types of Risks need to be assessed
    before EDI Implementations
   Market Concept Risk (Judged by Customer acceptance)
   Technology Risk
   Economic Risk
   Organizational Risk
   Regulatory Risk (Govt Interference)
System Planning for EDI Implementations…
EDI Technology Infrastructure Considerations
1. Positioning
    Increasing No of trading Partners
    Increasing no of EDI Applications
    Projected business growth
    Changing IS Infrastructure (of the orgn or trading partner)
    Electronic integration with business partners such as JIT Manufacturing
    Changing EDI technology (Event driven EDI or real time/Interactive EDI)
2. Transmission of EDI Data
    Direct or Point to point Transmission (Suitable to interact with limited partners)
    Third Party or Value Added Network (VAN)
3. Centralization of EDI System Functions
    A single and centralized installation of translation and communication software avoids
    duplication of development and maintenance efforts
Development of EDI Implementation Plan

   Firstly, Organizations should start with the pilot project which act as a
    vehicle for organizational learning, focus on making the technology work
    and determining impact on organization, securing the senior management
    support for EDI Program based on understanding of implementation
    process and business implications. Its success depends upon the following
    Identification of EDI Opportunities
    Selection of EDI Transaction, standards, and trading partners
    Selection of VAN supplier
    Analysis of procedural and information flow of selected transactions.
    Assessment of impact of EDI implementation on existing business process.
    Issues related to operational staff affected by implementation
    Providing training and promoting EDI program internally and externally
    Acquiring necessary resources such as Skilled staff, hardware and software.

   Organization have adopted EDI to expand the
    automation of business processes beyond
    traditional corporate boundaries. EDI has become
    the tool to streamline business activities. It also
    facilitates the cooperation and coordination
    between customers and vendors.
   EDI is the facilitator for achieving improvement in
    overall quality by fewer errors, reduction in
    processing time, less human intervention and
    minimized unproductive time.
Thank You..!!!