EDI extracts information from
a business process (e.g. purchase order, invoice etc). The data is usually transmitted over a
Value Added Network (VAN) and delivers it to a
Alternatively data can be transferred directly. Direct transmission occurs
when a company connects directly to the
computer of its trading partner using a dial-up or dedicated line. Once the
trading partner receives the information, the EDI systems will
translate the standardized
EDI data and
processed. EDI deposited information in the appropriate
business application. EDI implementation is a totally automated interaction
between the business applications, human intervention is not required.
Here is an example of how the electronic data
interchange process works. Let's presume that a buyer is sending a purchase order to the supplier.
Buyer prepared purchase order
in his purchasing system
The EDI translator will do compliance checking
and translate the message into an EDI format.
The EDI is then securely transmitted to the supplier by a communications
(e.g. VAN, internet etc). The communication connection will ensure
the EDI transactions are sent and received.
The file is sent either
directly to AS2 recipients, a mailbox, or FTP site.
Order Entry module could be one of the EDI
When the supplier's computer software received the EDI purchase order it will reformat the
data and imported the data into an existing
application's data files (
Once order received, the
EDI software will generates an acknowledgement back
to the buyer.