E-Business SuiteThis is an article is all about EDI, deal mostly with basics and some information with underline Oracle E business Product within the suite. This article start with a typical business case and describe how this is evolves and how important is in ERP, the article helps you understand the high-level overview of the EDI process.
Why EDI Evolved?
Let us consider a simple business scenario. A Customer from PO department who wants to purchase an item creates a purchase order and then faxes it to the suppliers. At the moment vendor receives the purchase order and manually keys in a sales order. The vendor’s system generates a confirmation date that is sent back to the customer via fax or mail. The vendor then ships the goods via a carrier. The carrier delivers the products to the customer. When the goods are shipped, the vendor invoices the customer. The customer makes the payment by check, and the vendor deposits the check in the bank. Finally, funds are transferred from the customer’s account to the vendor’s account.
Figure: Typical business documents exchanged by business partners
Now It clears how much of information needs to be transferred and tracked to run the business, which in reality it is called trading partner. This simple scenario requires the exchange of various documents between several business partners at different times.
All this electronic data was exchanged using floppy disks and other secondary devices. So, ANSI committee was formed to define the standards. Hence the electronic exchange of business documents in a standard format gave birth to what is known as EDI, today the business world had accepted as one of most important entity.
What is EDI?
EDI (Electronic Data Interchange) is the electronic exchange of business documents between the computer systems of business partners, with a standard format over a communication network. It can also be called as paperless exchange.
EDI, electronic funds transfer (EFT), electronic mail and fax are increasingly being used to schedule operations, streamline order fulfilment, and optimise cash flow.
The business documents that are been exchanged between business partners need to be in a standard format. ANSI X12 (American National Standards Institute) or EDIFACT (Electronic Data Interchange For administration, Commerce, and Transport) are two standards, which supply a common language for formatting the information content that is been exchanged.
There are five major Components in the EDI Process:
In EDI, the senders and receiver are called trading partners (Customers and Vendors) and the ANSI X12 or EDIFACT standards supply a common language for formatting the information content of common messages.
Oracle’s e-Commerce Gateway (EDI Gateway):
A standards-based integration product for Oracle Applications, which allows for companies to integrate Oracle Applications with applications residing inside or outside of the enterprise; communicating via Intranet, Extranet, or Internet.
Oracle’s e-Commerce Gateway is independent of all EDI standards and can be integrated with any upstream or downstream process via an ASCII file. Thus, any EDI translator or third party application, that best suits a company’s business requirements, can be selected.
The major advantage of using Oracle e-Commerce Gateway are listed below:
1. Reduction in labor hours dedicated to data entry
2. Increased data accuracy
3. Quicker communication of key information to and from customers/suppliers resulting in reduced business cycle times and more efficient planning
4. Promotes commonality of business documents and processes
Know the Terminology used in EDI
- Transaction Set - Business document transmitted between companies (e.g. Purchase Order).
- Data Segment - Units of data used to communicate specific information within a message (e.g. the header).
- Data Element - Specific unit of data within a data segment.
- Trading Partner - Entity such as a customer, supplier, or sister organization with whom electronic commerce is executed.
- EDI Standards - Agreed to formats for exchanging electronic data (typically developed by representatives of industry verticals).
- Translator - Software application that translates data into or out of a specific format or standard for processing by an ERP system.
- Define Trading Partner Relationships
- Define Code Conversions
- Customize Flat File Formats
- Use Standard Report Submission
- Initiate Extract Process
- Initiate Import Process
- View Extract/Import Process Status
A note on File
- ASC X12 is the EDI standard for North America and Canada.
- EDIFACT is the EDI standard for Europe and Asia.
- v10.6 - supports 4 transactions
- v10.7 - supports 4 transactions
- v11.0 - supports 14 transactions
- v11i - supports 18 transactions
- v11i10.2 - supports 23 transactions
- R12 - data not available