Electronic data interchange (EDI) has been a component of the business world for decades. It is no longer the question of whether or not a business should invest in an EDI company. Instead the question is which company or software to invest in; there are tons to choose from, but some are more reputable than others.
The best providers of EDI won’t just give you a resource for converting your important documents to a standard universal format. They follow specific steps to import and convert document information, minimize errors, and simplify the transmission process in order to ensure smooth business operations. There are 3 main steps involved in successful EDI:
- Preparing the Documents
- Translating the Documents
- Transmitting the Documents
STEP 1: Preparation of the Documents
Before anything else can be done, there has to actually be a document. No point in completing EDI if there is not even data to be electronically interchanged. This means that the first step is data collection and organization. But rather than printing an invoice on a wasteful sheet of paper, EDI allows you to organize your files electronically.
There are a few ways of generating data for EDI; one of the most common is human data entry over the computer. Top EDI companies, however, tend to use an application software with built-in interfaces for EDI filing. This completely eliminates the risk of human error that is bound to happen when manually entering data.
STEP 2: Translation of the Documents
This is a major step of EDI, some say it is the most important of all. The entire point behind EDI is to create a platform for easily exchanging data and documents around the world by providing one standard format. The format is the same for you and your business partners, even if your company is based in the US and theirs is in Singapore.
According to a UK-based EDI source, “the next step is to feed your electronic data through translator software to convert your internal data format into the EDI standard format using the appropriate segments and data elements…This requires specialized mapping expertise in order to define how your internal data is to be mapped (i.e. correlated) to the EDI data.”
Translating the documents can be done using two different methods. The first is with a translation software that is installed on computers throughout the company. The second method is to hire the services of an EDI provider. This is a bit trickier since you have to actually send your documents to the service provider, rather than translating them onsite.
STEP 3: Transmission of the Documents
The third and final step is to actually send the documents to the recipient. There are several ways to connect to your business partners, 3 that are common among the top EDI companies.
- Connect directly using a secure internet protocol
- Connection through an EDI network provider
- A combination of both
Deciding on which one is best depends on how often you plan to make transmissions as well as the system used by your partner. Ideally, you would be using the same EDI service provider to allow things to run as smoothly as possible.
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