WHAT IS EDI AND HOW CAN IT WORK FOR YOU?

EDI is a term that is commonly used these days, and it is assumed that everyone knows what it stands for, what it is and what it does. However, there are elements that can be elusive. Here, ADP sets out its own K8 system as a working example and clarifies some of the jargon surrounding electronic data interchange.

Computer-to Computer exchange

In its simplest form, EDI is the computer-to-computer exchange between two companies, of standard business documents in an electronic format. Any business can enter the world of EDI and begin taking advantage of the speed and economy of electronic commerce, or e-commerce.

There are two key elements in basic EDI.

First, electronic documents replace paper ones.

Second, the exchange of documents takes place in a standardised format.

Companies of all sizes are being asked to participate in EDI and other IT initiatives by their customers and larger trading partners. Businesses with limited IT resources can find these requests expensive and demanding. Internet IT EDI solutions solve problems such as staff shortages or technical expertise and enable companies to trade electronically without the need to purchase, install and manage EDI software.

Within K8, standardised messages can be used to electronically transmit and receive messages in two key areas – sales orders and purchase orders.

Sales Cycle

K8 can accept inbound sales orders from customers using EDI in agreed industry standard formats. Outbound order responses and acknowledgments can be sent once the EDI order has been processed in K8, and despatch notes can also be sent to the customer’s EDI enabled system.

K8 can be configured to send invoices and credits to the customer’s EDI-enabled system.

Purchase Cycle

K8 can send purchase orders to a supplier’s EDI enabled system. Purchase order responses from the supplier can be accepted and K8 can use this information to first stage receipt the products or update the purchase order as appropriate. K8 will also accept incoming purchase invoices and credits.

The processing of EDI invoices and credits fully cover terms and settlement discounts and follows the process through to the point of VSI (verify supplier invoices).

Web Catalogue

ADP also offers a standard web portal (or web catalogue). It makes real-time calls into K8 which allows account customers to place orders, view stock, analyse their buying pattern, create template orders, retrieve PDF copy invoices, review order tracking and request price list retrieval.

In addition to all of the above, K8 also has the ability to not only create reports, but to export any reports created within it in various formats. That way, they can then be read or analysed by other software.

K8 can also interface with courier companies such as UPS, TNT and Business Post to assist in tracking consignment orders.

EDI’s Benefits

Reduces overall cost for your business-to-business projects
Achieves competitive differentiation
It can aid in creating higher customer satisfaction through improved responsiveness
It makes use of the latest business-to-business technologies
It can help merchants improve their ‘go to market’ time.
It can also improve visibility and reporting