In the last 20 years EDI (Electronic Data Interchange) has been developed to automate these document flows, primarily between the large organisations that could afford the technology.  However, the Internet is now giving EDI quite a boost, but not by using private networks and the traditional EDI data formats (X12, EDIFACT and TRADACOMS). Rather, XML is becoming the glue that connects businesses together using the Web as the communications vehicle.

XML (EXtensible Markup Language) is an open standard for describing data. It is used for defining data elements on a Web page and business-to-business documents. It uses a similar tag structure as HTML; however, whereas HTML defines how elements are displayed, XML defines what those elements contain. HTML uses predefined tags, but XML allows tags to be defined by the developer of the page. Thus, virtually any data items, such as product, sales rep and amount due, can be identified, allowing Web pages to function like database records. By providing a common method for identifying data, XML supports business-to-business transactions and is expected to become the dominant format for electronic data interchange.

Who should consider it?

Any business where large numbers of orders are received – by fax, mail, phone, email - acknowledged and processed with a mix and match of manual, paper and electronic processes, that require significant format shifting or re-keying of data should consider exchanging these document electronically with trading partners.

Key Benefits

Benefits fall into two main categories.  Firstly,

Processing Efficiencies:

• Reduces the need for re-keying data
• Reduces direct costs associated with manual processes
• Reduces mistakes associated with re-keying

Secondly, Establishing Closer Business Relationships:

• Ensures supply chain partners receive documents in the format they want.
• Reduces the costs associated with trading with you, which improves margins, profitability and the attractiveness of trading more with you.
• Makes it easier to scale up trade with you if incremental transactions are processed electronically
• Builds closer relationships if businesses have made joint investment in compatible technology in order to exchange documents electronically.

Issues to consider

Businesses need to discuss with partners which formats and processes are mutually beneficial before adopting new e-commerce systems.  

Information exchange (document exchange) may require a total review of how information is created and passed through your existing systems and processes. It may require new technology or to install middleware that allows one system to talk to another and output documents in a common format.

The process may require the use of modern day tools such as EDI (electronic data interchange) or XML (extensible mark-up language), internal database translators handling conversion on the fly or outsourced internet technology which doesn’t require any specialised software to be installed. It may in fact be as simple as contracting the services of a document translation company which can handle your documents at an external server and pass them onto your partners in the format required.

Once buyers, sellers, and others in the supply chain are agreed on the formats necessary and how to translate and exchange those document securely and accurately, everyone will become more confident and comfortable in the new electronic world.

It’s going to take some time before the majority of business and indeed technology companies adopt global standards that seamlessly protect columns, frames, and other important formatting regardless of who is sending or receiving. Translation services, hosted document translation brokers and specialised conversion software are likely to be with us for a few years yet.

Once you’ve managed to get your basic documents flying smoothly between your business partners, you might like to consider the next level of challenges if you’re hoping to internationalise your business.