The amount of paperwork required to smoothly operate a business organization is astounding. Over the years, the number of purchase orders, invoices, account statements has increased, as have the expenditures of time and money to create, implement and manage these processes. In some businesses, entire departments are dedicated to handling the flow of organizational and business paperwork. EDI, however, provides businesses with a practical alternative to excessive paperwork and time required for data entry and reconciliation.
Electronic data interchange (EDI) is the direct computer-to-computer transfer of business information between companies, vendors, suppliers, client companies, and other organizations.
For decades companies have been using computers, instead of mail, to send business documents. These efforts employed proprietary or unique formats. The absence of a standard format led to the condition where computers could no longer "talk" to one another. For example, Supplier X could recognize an electronic purchase order from Retailer A but not from Retailer B.
In 1979, the American National Standards Institute (ANSI) formed the Accredited Standards Committee (ASC) X12 to rectify this situation. This committee was to standardize the format of electronic documents to allow for easy exchange of information between computers. This humble beginning has led to the establishment of standards for over 400 business documents.
In the late 1980's there was a drive to standardize file formats in the rest of the world. This drive resulted in the UN/EDIFACT standard being adopted. For most transactions outside of North America, the UN/EDIFACT standards are used.
Companies who use EDI to communicate to their Trading Partners have long complained about the cost of using Public Value Added Networks (VANs) to communicate EDI data. They feel that VANs are costly and their do not provide the “bang for the bucks”. With this in mind, large EDI users have eyed the Internet as the vehicle to reduce their EDI communications charges. Initially, there was a reluctance to use the Internet as a communications vehicle for sending critical business information due to concerns about reliability and security of data sent over the Internet. With this in mind, the Uniform Code Council (UCC) initiated a program called EDI over the Internet (EDIINT) which goal was to standardize the method to communicate EDI data over the Internet in 1996.
The meetings were facilitated by the UCC and included a number of software vendors and large users of EDI. The intent was to hammer out the communication protocols and the security standards for communicating EDI data over the Internet. The first standard, which emerged in 2000, was the AS1 standard which set out the rules to communicate EDI documents over the Internet using EMAIL (actually SMTP). The second standard, which was completed in 2001, was the AS2 standard which supported communication of EDI data using HTTP
As with EDI, there are two distinct markets for EDI over the Internet. The EDI enabled Hub Market (a retailer such as Wal-Mart is a good example) and the Spoke Market (suppliers of retailers). The Hub market is the most significant market as it drives the adoption of the spokes. The following companies have implemented EDI over the Internet strategies:
Retailers such as Linens and Things have already eliminated their cost of using Value Added Networks by insisting that suppliers who do not trade with them via the Internet pay for VAN charges for sending and receiving EDI documents.
For spokes, the enticement to communicate via the Internet and eliminate VAN charges will be very powerful. It is anticipated that all of the major hubs will use some form of EDI on the Internet within the next two years. Without the ability to send and receive EDI documents using the EDI over the Internet standard, suppliers will be prevented from selling goods to these retailers.
SoftCare recognized the need to provide its customers and future customers a premiere solution for EDI over the Internet. After a detailed review of the certified EDI/INT vendors, SoftCare chose to partner with CLEO Communications. CLEO Communications has a proven track record in working with industry-leading organizations to help improve their business partner communication, reduce operational costs and increase revenues. Cleo's products have been proven in over 100,000 worldwide installations. Three of the top ten U.S. retail chains run their daily operations with the help of Cleo's remote-to-host connectivity products
SoftCare has partnered with CLEO to imbed their CLEO Lexicom technology with SoftCare’s OpenEC®TradeLink EDI Management system to provide the next evolution of the EDI Translator. TradeLink is a full-featured EDI management system to translate and exchange business documents with your trading partners and it supports communications via any public Value Added Network (VAN), private Network or the Internet.
SoftCare and CLEO have also partnered in the co-development of CLEO’s VersaLex Exchange product. The focus of this product is to provide mid-market companies looking to use the experience of retailers such as Wal*Mart to implement their own EDI over the Internet based EDI solutions. VersaLex Exchange is targeted at the mid-market (10 to 2,000 trading partner communities). At present, this market is being under-serviced as existing EDI over the Internet Hub solutions are extremely complex “ERP lite” solutions for Fortune 500 companies. On the other side of the market low end “spoke” solutions lack trading partner community management features, which prevent larger users of EDI to effectively manage communications of critical business documents over the Internet. For the mid-market, VersaLex Exchange a robust, easy to use trading partner community management solution with the power to effectively manage and audit the movement of critical business documents over the Internet.
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