Page 50 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

Unit 4: Electronic Data Interchange to E-Commerce

4.2.4 EDI Transmission

Companies have various ways to send and receive the EDI files through the Internet. The EDI
transmission utilizes various software and systems to allow transmission, where more than one
document can be transmitted at a time. Let us take an example to understand the working of EDI
transmission.

A buyer prepares an order in his acquiring procedure and sends it for approval.
After receiving the approval, the EDI order is translated into an EDI document
format labeled as 950 purchase order. The EDI 950 purchase order is then securely
transmitted to the supplier either via the World Wide Web (WWW) or through
VAN.

The working of buyer's VAN is similar to an electronic post office. The buyer’s VAN
ensures that EDI transactions are sent and received and the supplier's VAN ensures
that the buyer receives the order.

After receiving the order, the supplier's EDI procedure processes the order. Data
security and control are maintained through the transmission procedure using
passwords, user identification, and encryption. Then, both the buyer's and
supplier's EDI applications are edited and checked for accuracy.
All the trading partners have different EDI requirements. Based on the
requirements, the specific kinds of EDI documents are processed. In fact, most of the
enterprise documents that one firm can exchange with another company can be sent
via EDI.
Some of the ways of EDI transmission are described below.
1. Dial Up: In this method, communications generally happen over dedicated lines directly between
trading partners or through VAN. This file transmission method uses a computer's modem to
send tax return, report and/or payment files to the department's EDI service provider. However,
this transmission is very slow and also very expensive, due to the use of several modems and lines
to support multiple trading partners. Taxpayers who do not have Internet access on their
computer generally use this transmission method. Dial-up transmission was mainly used to send
and receive the EDI files before the high-speed Internet became popular.

The Framework EDI component has no dial-up functionalities.

2. Simple Mail Transfer Protocol (SMTP) or E-mail: According to Bruce Chambers, “There is a
significant amount of E-mail activity around an EDI transmission.” E-mail over the Internet
provides less expensive and simple ways of sending and receiving EDI files. However, the
security is less if the files are sent by e-mail over the Internet, and also the size of an account's
mailbox limits the size of EDI files that one can send. In addition, as per EDI definition, human
intervention is not required to transfer a document, whereas, e-mail generally requires a user to
retrieve an attached message.

Large healthcare organizations normally prefer to operate their own e-mail server
than to pay a monthly per-employee fee for e-mail to an Internet service provider. For
small organizations paying an Internet service provider for e-mail is more affordable
than maintaining their own e-mail server.

3. File Transfer Protocol (FTP): FTP has become one of the popular ways of sending and receiving
files. Trading partners can easily create their own FTP server and directly upload their EDI files.
However, with this protocol, files can only be sent or received into directories where these files
wait to get polled for processing. These files can be processed depending on the polling interval.

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