Electronic Data Interchange (EDI) is the movement of business documents in a structured, machine-retrievable data format. This permits data, particularly documents, to be transferred without rekeying from a business application in one location to a business application in another. Sometimes EDI is used within a single organization; increasingly, EDI is used among several organizations. When EDI is used, paper documents are eliminated from business transactions, enabling transactions to take place faster and with greater accuracy than in the past. Transaction time is decreased because documents do not have to be mailed (or faxed), and there is no need to rekey information into the receiver's computer system. As a result of this, EDI is becoming increasingly popular as a way for businesses to achieve greater productivity and enhance their relationships with customers and vendors alike. This research examines EDI and considers its implementation, and examines the experience of one company, Black & Decker, with EDI.
EDI developed as businesses began implementing computers on a wide scale. Initially, companies realized that files could be transferred from one department to another via mainframes; as workstations and personal computers became more popular, the "sneaker net" emerged as workers would trade files on floppy disks. This primitive network gave way to current networked systems in which computers can easily share files and information stored on one system with files and information stored on another. EDI takes that one step further and uses communications protocols to send information, usually documents such as purchase orders or invoices, from one system to another. This can be done locally, or on a global basis (Jenkins, 1994, p. 11).
EDI is the exchange of information in a standardized format from one computer to another. The standardization is critical since the ability of the receiving computer to translate the...