EDI Standardization – a global solution for succesfull business operations
EDI Standardization is what set EDI apart from other electronic methods of transferring data. Before getting into details about administration of EDI standards such as ANSI ASC X12 or UN/EDIFACT, it is important to understand why standards are used.
Companies such as Target and Wal-Mart have thousands of vendors. Imagine the inefficiencies and challenges these companies would face if each vendor required a proprietary file. On the vendor side, if a vendor is supplying Wal-Mart and Target and 10 other trading partners, imagine the inefficiencies and challenges the vendors would face if they had to accommodate a separate proprietary custom file for each of their customers. This would be a costly administrative nightmare. EDI standardization serves to make everything uniform. Particularly as business becomes global, there are often different ways of saying the same thing. Take, for example, the American and European date formats. The European date format is DD/MM/YYYY and the American date format is MM/DD/YYYY. If an American company places an order with a European company and requests a critical delivery date of 07/08/2007, it is entirely possible that they might receive their order on August 7th, since in the European format the date was interpreted as 07 August 2007. The standard EDI message format prevents this by enforcing a common definition of the date. In this case both companies would see the date as 20070708–YYYYMMDD–with no room for confusion.
EDI standardization and particulary standards are built on the concept of making electronic business documents uniform, without regard to country or place of origin or industry. Even though a purchase order for a steel manufacturer will be different from a hospital purchase order, the EDI standard ensures the document’s integrity. The EDI standard provides the controls needed to track the exchanged electronic business documents and confirm that all the data that was sent, was in fact, received and processed by the trading partner.
The use of published EDI standards enhances the overall usefulness of the inter-company business transactions. Millions of lines of codes have been written to produce multiple commercial products that translate EDI data according to standards. Hundreds of leaders from different industries have met for more than 30 years to develop and grow EDI standards worldwide.