Monday, January 15, 2001		Article

EDI for commercial activities
By Sumesh Raizada

MUCH before commercial transactions became common on the Internet, when e-commerce was perhaps in its infant state, one electronic trade-related term was already in existence in the USA, UK, and some other countries. This was the EDI or Electronic Data Interchange, which referred to business and trade activities that are performed electronically through computers. It may simply be termed as scientific substitute for paper-based trade transactions, in which all business-related documents like purchase orders, invoices, shipping details, receiving advises, and even payments are transferred electronically between interlinked computers. It facilitates the exchange of formatted commercial information between organisations, their customer or those situated at remote and far-off places. It is also much different from e-mail, as information is exchanged in structured and standardised formats between computer applications rather than between persons.

In conventional business transactions, even though computers are utilised for activities, like printing invoices, purchase orders, shipping details, still the documents are dispatched physically through medium like mail or courier. The same information is processed again at the receiving end computers, which involve unnecessary repetition and operating costs. In the EDI, when data is entered into the computer of sender, same data automatically gets transferred to computer application of the receiver, without any re-entry or re-keying. This helps the organisation at the receiving end to plan their operations immediately, thereby saving a lot of inventory and other costs. Since, the EDI eliminates repetition of entering the same data on computers at different locations, the chances of errors, delays, handling and reprocessing time get reduced considerably. Productivity improves as business information moves much faster and accurately at both or multiple locations.

The EDI has applications in almost all commercial activities, including road/air transport, shipping, cash transactions, materials management, exports and imports, administration, and taxation. It has found acceptance in areas, which require repetitive standard actions, where profit margins are low or where time constraints are involved. The EDI is also applied in exports, where market requirement makes it mandatory for the companies to maintain high operational or quality standards. It utilises the services of VAN or Value-added Network for transmission of electronic data. The messages are sent according to agreed set of standards, to maintain uniformity in interpreting and complying with the data. In India, the EDI services are provided through the VSNL, Satyam Infoway and National Informatics Centre (NIC), through their communication network between various national and international nodes. Some major VAN operators’ worldwide are AT&T, IBM and GEIS.

Due to severe competition in domestic market, several large companies are now looking for business avenues outside their country or continent and have increased the potential of the EDI in trade activities. The EDI also helps in reducing the manpower involved in data processing. It has also helped organisations in adapting to faster business cycle.

The EDI has a scope in shipping, publishing, banking, tourism, carrying and forwarding, customs, export & import, excise and taxation, insurance, statistical research, automobiles, textiles, pharmaceuticals and health care. Some leading auto manufacturers have been able to implement just in time (JIT) successfully only because of the EDI. Major seaports have utilised the EDI in their system and have reduced the custom clearing time for the cargo, from days to minutes. Banks and financial institutions are using EFT or Electronic Funds Transfer for quick transfer of payments.

Considering the application and utility of the EDI, there exists a tremendous scope for career in different operational areas. People can work either as marketing professional for selling EDI software and solutions to prospective firms. They can also work as programmer for developing EDI software or can work as EDI coordinator in companies for interacting with the trading partners. The EDI professionals also work with VAN providers in software as well as hardware operation and maintenance. They work as project leader/manager, service engineer, communication engineer, security coordinator, for developing and maintaining communication infrastructure. The EDI coordinators usually work in firms for searching trading partners and to resolve various commercial/legal issues. Experienced EDI professionals can also work as consultants for firms or government bodies for providing and implementing user specific EDI packages. Other related fields where career exits in abundance are Electronic Insurance Claims (ECS) or Electronic Statement Printing (ESP).

The qualification required for working, as EDI professional may be electronic or computer engineering and MCA. Those with MBA, commerce or economics background with proficiency in programming can also find opportunity in working for the EDI applications. However, depending upon the industry or application, one has to become conversant with various EDI standards and software. In India realising its importance, several institutions, including AIMA (All-India Management Association) and IGNOU, are offering learning and advanced courses on the EDI.

National Informatics Centre (NIC) is providing technical and software-related supports to the users for developing and implementing the EDI. Prospective EDI professionals can also gain considerably by attending seminars or workshops that are held regularly by export and government organisations, highlighting the importance of the EDI in respective sectors. The major VAN operators in India also provide training on operating software to their own staff and that of client organizations. These software packages are NICNET provided by NIC and GEDIS provided by VSNL. Satyam Infoway has also introduced EDI package called Gentran, for mapping, tracking, and communication between various operating systems. There are numerous other firms in India and abroad like SoftRix, Guildsoft, which are developing EDI software specific to user requirements. Some of these also operate and manage the clients EDI system on their servers.

EDI involves processes that include generation and formatting of data, its transmission, and finally the interpretation of data at the receiving end. The EDI standards define the technique for structuring data into the formats similar to those, which exists on paper. These standards are common globally and are followed by all trading partners, to avoid any confusions or discrepancies. The EDI software is designed to translate the messages at the sending or receiving end from or into the internal applications software. For communication or transportation of messages, most organisations nowadays utilise the services of VAN operators.

So, a vast career scope exists in different functional areas of the EDI. However, the essential skills, which prospective candidates should possess, are strong knowledge of the prevalent business practices as well as awareness of tax and duty structure. He should be good in communication and be able to translate user requirement into task specific software. Besides, patience is another important quality for an EDI professional. They must have understanding of manufacturing organisations, customer service, billing, payments and shipping procedures. Technically, they should be aware of databases, syntax, and programming languages. They should also be able to design and integrate data, establish trading protocols, and rectify technical problems. Those performing all these tasks are sometimes also referred as the EDI analyst or project manager.

Now with the advancement in communication network, the means of information transfer have increased. This has prompted more industries to join the race for EDI implementation in their respective business, with renewed vigour. How much the EDI is important can be gauged from the fact that Government has established EDI council of India, which is chaired by Secretary, Ministry of Commerce. It consists of representatives from government departments and industries. The task includes laying down the policy for creating awareness among potential EDI users; attending legal and HRD related issues, etc.

The earnings are enormous for the EDI professionals, who can command and salary package once they gain experience. However, income varies depending upon their area of expertise and industry in which they are employed. The career prospects for the EDI professionals will soar tremendously in the coming times considering its importance in trade and commerce. Soon they shall be found working on EDI project for development, implementation and management, in all business activities.