Electronic Data Interchange
The Internet Age
Electronic Data Interchange or EDI refers to the transmission of data between organisations via electronic means. Although this includes e-mail, EDI also applies to much more than that. In its essence, EDI defines a set of standards that allow businesses to communicate information quickly and easily for mutual benefit.
It is common for EDI to be used among trading partners to streamline invoicing, purchasing, order processing and other activities that often require a lot of manual, paper-based processing. In most cases, exchanging paper documents between businesses is very inefficient: it requires data re-keying by the receiving party introducing data-entry errors. It also inflates administrative overheads, causes delayed business transactions and may result in failed business partnerships.
The Benefits of EDI
The benefits of EDI and other similar technologies can be evaluated by the reductions in cost, errors and wasted time. Essentially, EDI is designed to:
- Remove document re-keying: EDI allows you to receive documents electronically, using well-defined formats - no data entry is required and the information can be acted upon instantly.
- Eliminate paper: EDI can eliminate or significantly reduce your ongoing paper costs. More importantly, by storing files electronically you can minimise the risk of lost documents, such as invoices and purchase orders.
- Reduce administrative overheads: EDI results in a speedy, accurate and efficient exchange of information, eliminating the need to reprocess information and saving your business time and money.
- Gain access to up-to-date, error-free information: EDI can facilitate the exchange of timely information about your trading partner’s business, including latest pricing and products available, improving the quality of your business decisions.
- Reduce lead times and stock-holding periods: By exchanging purchase orders electronically, you can improve stock management allowing you to sell and dispatch your inventory more efficiently. EDI can also reduce your on-going stock-holding costs through improved inventory turnover.
- Improve accounts management: EDI enables vast amounts of invoices to be sent or received automatically. This allows your business to improve accounts receivable and payable by tracking late and outstanding payments.
- Increase the quality of the trading relationship: Speedy and accurate information sharing can improve the quality of your business partnerships - eliminate lost invoices, inaccurate data and increase your business responsiveness.
- Gain a competitive edge: EDI can help your organisation become leaner, more efficient and effective at generating sales. EDI provides an important step in optimising and streamlining parts of your business that are important to customers and trading partners.
Electronic Data Interchange and You
A common example of EDI is when a computer based system is implemented to replace a paper-based ordering system. EDI can greatly improve manual processes, enabling a single entry point for data, both saving time and reducing errors.
With EDI there is no need to re-key information at destination points: these technologies allow a company to benefit from sorting and manipulating data electronically without the cost of manual entry. In addition because the data is captured in electronic form, the data can be easily manipulated, reissued and speedily transferred between destinations.
The benefits of EDI are paramount, but it is surprising that the uptake of these technologies is relatively slow. Your business needs to consider and EDI solution, if:
- You want to reduce your administrative overheads, including data entry, invoicing and order processing
- You want to create a paperless office giving you access to timely, accurate, electronic data
- You want to stop relying on couriers and postal services to deliver important documents on time
- You want to create a structured information channel between yourself, your customers and trading partners
- You want to improve your inventory turnover by decreasing lead times and stock-holding periods
- You want to improve the quality of accounts management, disbursement and collection
- You want to foster strong, reliable relationships with your customers and trading partners
Canary EDI Solutions
Canary has extensive experience in developing EDI systems. We are experts in designing and implementing helpful solutions to replace time-consuming processes of paper-based systems.
Our products reduce the cycle time between information creation at point of origin and information arrival at point of destination, allowing you and your trading partners to incorporate up-to-date, accurate information into your decision making. Combined with reduced administrative overheads, a Canary EDI solution will certainly become a valuable productivity tool at your organisation.
Contact us to see what we can do for your business with our EDI products