It seems like only a short time ago that EDI started to get very popular. However, it has actually ben around for a long time. So how come it has been so successful?
Key Components of EDI
EDI will only work well if it has a number of key components. Having these creates a positive experience for the user and the administrator, ensuring that the entire process of sending and receiving transactions is as smooth as possible. Those components are:
- EDI mapping, which looks at the various elements with an EDI file. It takes the source data and looks at which destination objects correspond to that. This could be any type of file structure, such as columns in an excel file or fields in a text file, to name but a few.
- Translation, which is what enables the system to read one value and automatically correspond that to a different value. For instance, the EDI administrator can determine that whenever they see value Qualified ID 08, for instance, the system automatically sets it as a DUNS number.
- Validation, which is the process within the system that ensures that all the data that has been inputted into the file is accurate, that it is in the right place, that none of the essential or mandatory fields have been left blank, and that any values that correspond to a certain list come from the correct dictionary ID. Essentially, this element makes sure that the file is free from errors and that it follows all the standard and custom set formats.
- Import and export, which allows the user to import data found in another file, such as Excel or any other format that the organization uses, into the EDI system. Export, meanwhile, ensures that the data found in the EDI system can be brought into whatever format the organization uses, be that Excel or other program. This is a very important, if not crucial element of the entire process, because the majority of businesses have their own ERP software packages outside of their EDI, and it is vital that those two can properly integrate, importing and exporting data and ensuring data is therefore consistent across the board.
- Reporting, which is an important feature that enables businesses to look at how certain activities happened in a certain period of time. This allows the administrator, for instance, to review the number of transactions that were completed, what type of transactions, who they were sent to, how many had errors, and so on. EDI software packages always come with a number of standard reports. However, the administrator should also be able to change those reports’ parameters so that they are fit for purpose for their particular organization. This allows for the creation of action plans and strategies, such as how to formulate an appropriate response to errors.
- Documents turnaround, which is the final element in which an EDI document, generally a custom purchase order, is automatically turned into an invoice. This avoids human error, while also making the process more efficient.