Electronic Data Interchange: What It Is And What It Is For
Find out what Electronic data interchange is and why it guarantees simplicity and efficiency in data exchange with your network of trading partners. Electronic Data Interchange is the most consolidated technology in the B2B sector, especially in markets such as large-scale distribution or production chains, because it favors the dematerialization and exchange of documents typical of relations between business operators (price lists, purchase orders, invoices, etc. .). The Electronic data interchange service is essential for both large and small companies.
Moreover, an exhaustive definition of electronic commerce, commonly known as eCommerce, is not limited to the classification of online buying and selling of goods and services but extends to all those electronic transactions that take place between the parties involved, whether they are between companies and final consumers (Business-to-Consumer) or commercial transactions between companies (Business-to-Business). For this reason, Electronic data interchange plays a fundamental role: it allows the replacement of traditional paper methods, speeding up and making the order-payment cycle more secure.
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What Is Electronic Data Interchange Technology For?
The great advantage of the Electronic data interchange is undoubtedly the ability to normalize electronic documents so that they can be exchanged electronically and automatically between the various commercial partners, thanks to the use of a common language, following the industry standards (EDIFACT in GDO, ODETTE in the Automotive, etc.) to allow dialogue with the various Information Systems and integration with the ERP. “The electronic transfer, between computer systems, of commercial and administrative data, through a standard agreed between the parties involved to structure messages”* allows to:
- eliminate human errors;
- automate the registration, verification and reconciliation between delivery notes and invoices;
- reduce management costs;
- facilitate the retrieval of tax documents because they are already prepared for electronic storage;
- foster business growth and securely connect partners/suppliers/customers worldwide.
The Advantages Of Electronic Data Interchange In Outsourcing
In recent years, many of those companies have started migrating to outsourced EDI models, realizing that “control” over hardware turns out to be more of a cost than a benefit and that infrastructure maintenance responsibility – in addition to resources necessary for data storage and protection, continuous updates and customizations on track management – lead to an imbalance in the cost-benefit ratio. As with so many other services, businesses today have realized that the benefits of EDI are maximized when outsourced.
The Electronic Data Interchange For Small And Large Companies
Even today, the most widely thought is that Electronic data interchange projects are exclusively limited to large companies. Thanks to the outsourcing model, the implementation of this technology, which is cheap and easy to manage, is now within reach of any company. This contributes to the continuous and constant diffusion of EDI. All companies looking for a system for digitizing the exchange of electronic documents with customers and suppliers can find in the outsourced EDI model an efficient and consolidated system that allows:
- translations, mapping and exchange of EDI documents with all business partners;
- managing the onboarding or migration process of new business partners;
- electronic flow monitoring;
- maintenance and constant updating of the network;
- a single, perfectly quantifiable cost item for the service.
Furthermore, it is no longer required to research, purchase, install and configure EDI hardware and software. Consequently, there needs to be more investment in IT staff training or hiring specialized resources.
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