B2B Info Exchange
Electronic data interchange (EDI) is opening the way for significant processing cost savings and better relationships between companies that regularly trade with each other.
Until recently companies have only trusted paper or ‘hard copy’ when processing documents such as invoices or purchase orders. This is beginning to change as the internet has allowed direct computer-to-computer processing and businesses have become more comfortable with the reliability of such systems.
EDI has also been given a boost by the increasing acceptance of XML (EXtensible Markup Language), an open standard for describing data. XML is similar to the web language HTML, however where HTML defines how elements are displayed on a page, XML defines what those elements contain, allowing web pages to function like database records.
Any business which receives a large number of standard documents that require significant format shifting or re-keying of data should consider exchanging these documents electronically.
The key benefits from EDI fall into two main categories:
Processing Efficiencies:
- Reduced re-keying of data the elimination of mistakes associated with re-keying.
- Reduced direct costs associated with manual processes.
Closer Business Relationships:
- Supply chain partners receive documents in the format they want.
- Reduced costs, improved margins and profitability by trading electronically.
- Easier scaling up of trading volumes.
- Joint investments 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.
EDI may require a total review of how information is created and passed through your existing systems and processes. It may also require new infrastructure or software, or contracting the services of a document translation company.
Once you’ve managed to get your basic documents flying smoothly between your existing business partners, the next step could be to harness the power of EDI to extend your business beyond the local market.
