How Small Businesses Can Use Affordable Web EDI

The first B2B e-commerce used EDI (electronic data interchange) to pass accounting information between suppliers and vendors. In the old days, EDI information was passed along expensive private networks called VANs (Value Added Networks). Today we see EDI migrating to the Web, with projections that by 2003, more than three-quarters of EDI will use Web networks rather than private networks.

What EDI accomplished was to provide a standard that companies can agree upon to exchange data for standard forms. A particular company will have its own accounting system. EDI translators parse information to and from the company accounting system to the EDI standard, and then on to the partnering company. These are some of the most commonly used standard forms (ANSI X12 standard):

• Invoice (810)
• Purchase Order (850)
• Purchase Order Acknowledgment (855)
• Functional Acknowledgement (997)

A large manufacturer might send a purchase order to a supplier, which replies with a purchase order acknowledgment. Then the supplier sends an invoice to the manufacturer for the goods purchased. Passing data electronically saves a great deal of money vs. transcribing data from mailed or faxed forms.

From VANs to the Web

Companies are finding that transmitting EDI forms via the Internet is substantially less expensive than using private VANs. Since messages can be secured, they can also be sent privately from company to company. One of the newer arrivals is the EDI Service Bureau that provides EDI capability to smaller suppliers that have not been EDI-enabled by larger trading partners. Here are three of these:

QRS EC Service Bureau http://www.qrs.com/Products/ServiceBureaus.html

Sterling Commerce Webforms http://www.sterlingcommerce.com/prod/ploc/comm/wfrm/

GE TradeWeb http://www.getradeweb.com/

GE TradeWeb

GE TradeWeb is one of the largest EDI networks, with 100,000 trading partners around the world. They also have small business pricing, such as monthly fees of $65, or annual fees of $650, or per EDI message fees of $6. At these prices, smaller players can do business using the EDI communications standards required by larger companies. GE TradeWeb also acts as a sort of marketplace that lets smaller vendors know of the needs of other trading partners in the network. Explore the benefits of some of these lower cost Web networks. It may open doors to some new business opportunities for your company.

XML Is Coming

While EDI standardized the fields in commonly used forms, XML provides interconnectivity by standardizing the tags that identify particular kinds of data. For example, <FIELDNAME>Portion of data to be transmitted</FIELDNAME>. An XML scan of a webpage can suck up each of the tagged fields on that page and import them as specific data fields into another company's program. Expect a new crop of programs to enable company-to-company data exchange via XML very soon.