Overview

In many ways, electronic communication between two computer systems is similar to human communication. In both cases, the content exchanged between the two parties must adhere to specific sets of rules and structures. In case of English and other languages the grammar defines how to use verbs, nouns, articles, and so forth. In the case of electronic communication rules are defined by various standards bodies such as X12, UN/EDIFACT, HIPAA, and others for various vertical industries.

The benefits of engaging in electronic data communication are clear and well-proven. The cost savings realized by automating manual tasks and reducing errors by avoiding re-keying are just some of the initial benefits for organizations. As two parties further engage in the electronic exchange of data, opportunities to improve business processes, such as reducing inventory through just-in-time processes or accelerating the revenue cycles through electronic funds transfer can have a significant positive impact for both parties.

To achieve these benefits, there are challenges along the way which must be overcome. One of the main reasons for failure stems from the fact that in human communication, we are able to make appropriate guesses and assumptions in areas where information is missing or incorrect, for example, where the grammar is not strictly followed. With electronic data communication, most computer systems are not able to perform this function, which humans are able to do, naturally. This simple fact leads to many challenges and sometimes outright project failure when attempting to move from manual to Electronic Data Interchange, or EDI.

Challenges Faced in Electronic Data Interchange

• When parties are getting ready to engage with EDI, each party must configure their computer systems. This initial configuration will be done by multiple business and technical IT team members in each organization. Therefore all team members must understand what they need to do in a very precise and easy-to-understand manner.
• Any changes during implementation must be shared on a continual basis with the team in a timely and consistent manner.
• Testing individual components can go a long way to ensure the success of the project. However, testing specific steps in the process is often not possible or is a complicated manual and expensive task.
• Successful implementation also requires testing data representing various business cases or scenarios, and creating these test data files is a time-consuming and manual process.
• Over time, business requirements will change and new versions of standards will be released. Whether changing the system to meet new business needs or keeping up with new standards migration is a required step in the process, adding unforeseen costs to the project.
• Businesses growth prompts adoption of additional standards. As with languages, doing business overseas requires working in different languages such as Spanish or French. Similarly EDI requires supporting multiple standard types. Learning new standards from scratch means a costly education and learning curve for staff members.
• While B2B solutions such as those offered by IBM, Microsoft, Oracle, Sun and TIBCO provide good solutions for production exchange of data, they do not provide solutions for solving one of the key problems stated above — that business and technical analysts from all parties must agree upon one specification. In other words, getting to production is costly, especially when thousands of trading partners must be ramped up.