PRESENTATION OF

E-COMMERCE







PRESENTED BY:-
AKASH -121
SHEFALI JINDAL -122
VIJAY LAXMI- 123
BHARAT SINGLA -124
GARIMA -131




ELECTRONIC DATA INTERCHANGE
Origins of EDI
Meaning of EDI
How does EDI work
Benefits of EDI
Drawbacks of EDI systems
Industry acceptance of EDI
Typical EDI setup sequence
Types of EDI systems
EDI and business cycle
ORIGINS OF EDI
It was started in 1960s when computer systems first
had the capability to transfer data between other
computer systems.
1. Ist EDI message send in 1965 that are automatically
converted into computer data.
2.In 1968,transportation data coordinating committee
(TDCC) was formed to study the problem and improve
it.
3.In 1973,FTP Protocol published
MEANING OF EDI
Electronic data interchange (EDI) is the structured
transmission of data between organizations by
electronic means. It is used to transfer electronic
documents or business data from one computer
system to another computer system, i.e. from one
trading partner to another trading partner without
human intervention.
HOW DOES EDI WORK
1. Prepare the documents to be sent
The 1
st
step is to collect and organize data e.g. instead of
printing a particular type of order.
2. Translate the documents into EDI format
The next step is to feed your electronic data through
translator software to convert your internal data
format into the EDI standard format using segment
and data elements.
3.Connect and transmit EDI documents to your
business partners
For connection and transmission we have to select a way
out of several ways that are :
Connect directly using AS2 (another secure internet
protocol)
Connect to VAN (value added network)
Combination of both VAN & AS2
BENEFITS OF EDI
Reduced cost
Shortened ordering time
Edi payments
No uncertainty
Reduced stock holding
Accurate invoicing
Fast response
REDUCE COST
Reduces stationery cost
Reduces labour cost
Reduces transaction cost

Shortened ordering time
Paper orders have to be printed, enveloped and sent to
the customers through post which includes at least
three days but in EDI orders are sent straight into the
network.
Edi payment

Payment can also be made by edi the edi payment
system can also generate and edi payment advised that
can be electronically matched against the relevant
invoices, avoiding query and delay

No Uncertainty

Once a transaction is sent, the sender does not know
when the transaction will be received nor when it will
be processed.. EDI is free from uncertainty.

REDUCE STOCK HOLDING

The ability to order regularly and quickly reduces the
amount of goods that need to be kept in a store room
or warehouse at the shop or the factory.

Accurate invoicing


Edi invoices can be automatically matched against the
original order and cleared for payment without the
sort of queries that arise when paper invoices are
matched to orders
Fast response

With EDI the customer can be informed straightaway
giving time for an alternative to be ordered or an
alternative supplier to be used
DRAWBACKS OF EDI




LACK OF SECURITY : Systems need continual electronic
protection, from viruses, hacking and potential fraud.















REGULAR TRAINING : Staff must recieve training,
every time the EDI system is updated. This is a
continuous investment.



REGULAR UPDATION : EDI systems need regular
software updates.
In case of a systems failure, manual systems must also
be in place to ensure that business continues.
Deviation of management
Concentration of control of edi causes management to
rely more heavily on computer systems and places
control in the hands of fewer individual, potentially
increasing risk
Industry Acceptance Of EDI
EDI IN INTERNATIONAL TRADE
Financial EDI



Healthcare And insurance




Transportation and EDI


Typical EDI Setup Sequence

Identify the trading partner
select communication method
Select software to facilitate
Criteria of software selection
Set up your trading partner
trading partner mapping
Testing the setup
Start live testing
Identify the trading partner
A trading partner (ie. KMART) will probably contact
you, and indicate you will be required to receive their
orders (850's) via EDI. Then you will begin the system
by implementation guide
Select Communication Method (VAN)
Communications provider, such as Sterling,
AT&T or IBM, are used to receive and send
information through. This is done to eliminate
any direct computer to computer
communications which can present difficulties
and high costs.
Select Software to Facilitate;
(1) Communication - the electronic communications
(most translators include this ability)
(2) Translator - the translation of the EDI document
standards
(3) Integration - the printing or integration of the
EDI transaction into your accounting software
Criteria for Software Selection
Choosing the right solution, translator and integration
software is extremely important.
The most important thing is that Integration of EDI
directly into your accounting software is necessary to
realize any benefits of electronic commerce
Set up your Trading Partner
There is a need to establish tables of information that
helps in cross referencing of information that is sent
from your trading partner and converted to your layout
Trading Partner Mapping
Each trading partner has to be programmed or
mapped into the translation software.. This is due to
a number of factors;
a. Different T/Ps use different versions of the EDI
standard.
b. Each company may be using different EDI
standards.
c. Each company has a unique implementation of
the particular transaction set.

Testing the Setup
Test the software, the communications scripts,
and modem with the VAN and mailbox.
Arrange to have test transactions sent to your
mailbox from the trading partner.
Start Live Testing
Make procedural changes and move to live transaction
processing. Monitor process and make any necessary
adjustments.
TYPES OF EDI SYSTEMS
Partially Integrated EDI System
Fully Integrated EDI System
Partially Integrated EDI Systems
Electronically generates
purchase orders
sales orders
picking lists
back-orders
These documents are shared with trading partners
Fully Integrated EDI Systems
Encompasses the electronic sharing of data
throughout all aspects, including the financial
payment and remittance advice components
EDI AND BUSINESS CYCLE
A typical business cycle may be as follows:
1. A buyer has a need for merchandise and creates a
Request for Quote (RFQ) document.


The seller responds with a Quote providing the price and
other pertinent information as to how the request would
be fulfilled.



3. Upon acceptance of the quote the , buyer sends a
purchase order document to the seller requesting
goods at quoted prices
4. The seller responds acknowledging that the goods
can be delivered at the prices specified and in the
time frame indicated.

5. The seller ships the goods and sends a shipping notice
providing details regarding the carrier, product
identification dates, and other information about the
shipment
6. The seller sends an invoice document, billing the buyer
for the goods. There is also an EDI document that allows
combined shipment and billing notice



7. The buyer notifies his bank that payment is to be made
(payment order) and uses another form of the same
document (remittance advice) to inform the seller that
payment is being made
COMPANIES HAVING EDI SYSTEM
BANK OF AMERICA
BLOOMBERG
COCA-COLA
KFC
LONDON DRUGS
NISSAN
PIZZA HUT
PANASONIC
WALMART
MAYBELLINE
As stated above , we have discussed about EDI viz. its
origin , meaning , its working , benefits , drawbacks ,
industries accepting it , types of its systems , its typical
sequence ,its use in business cycle.