Options for Electronic Data Interchange
Point to Point private lines,
VPN Internet and VAN data links reliably support EDI transactions.
By: John Shepler
EDI or Electronic Data Interchange is more than
just a shorthand for electronic transmission of business information.
It's an established standard that links companies through a common
protocol. EDI was invented to replace the snowstorm of paper
documents that are mailed or faxed between businesses. It creates
electronic transactions that mimic purchase orders, invoices,
and shipping notices. All in all, there are over 250 standardized
The B2B E-Commerce Standard
EDI is now the norm in industries as diverse as health care,
manufacturing, warehousing and shipping, transportation &
logistics, aerospace, and automotive. In fact, the foundations
for electronic data interchange were put in place over 30 years
ago for the transportation industry. Businesses that engage in
EDI, usually vendors and customers, are called trading partners.
The computer to computer data consists of messages that are comprised
of strings of data elements called data segments that are framed
to created transaction sets. A transaction set or compound document
is the basic unit of transmission for EDI exchanges. It contains
all the information that you'd find in the equivalent paper based
document or form.
What makes EDI efficient is the level of
standardization worldwide. In the United States, the dominant
standard is ANSI ASC X12 from the American national Standards
Institute. World-wide it is the United Nations/Electronic Data
Interchange for Administration Commerce and Transport or UN/EDIFACT.
XML based Web services are emerging as an alternative approach,
but EDI standards are so entrenched that they're likely to remain
the standard for some time.
Trading partners have a number of alternatives for interconnecting
their EDI systems. The current popular methods are point to point
private line service, encrypted dedicated Internet services also
called Extranets, and VANs or Value Added Networks. A VAN is
a specialized service that works something like an electronic
post office to store and forward EDI transactions. VAN providers
typically peer so that companies using different VANs can communicate.
Regardless of which transmission scheme
is employed, reliable digital communications lines are critical
to efficient business processes. The basic business grade circuit
that comes with a service level agreement is the T1 line. Point
to point T1 lines and T1 dedicated Internet connections are almost
universally available. Costs have really come down the past few
years sothat full T1 lines at 1.5 Mbps are practical for even
SMB or small and medium size businesses. Larger corporations
may consider T3 lines or DS3 service on fiber optic carriers.
Both run at 45 Mbps. Dedicated Internet connections may be encrypted
using IPSec (IP Security), PPTP (Point-to-Point Tunneling Protocol)
or L2TP (Layer 2 Tunneling Protocol) protocols to create VPN
or virtual private networks within the Internet.
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