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E-Commerce and E-Business

third party network provider which is a communications intermediary with other trading partners
which is called VAN.

6. Inexpensive Microcomputer: Inexpensive microcomputers are required to bring all potential users
into the market. It permits even small firms to implement EDI. Since microcomputers are now
easily available, it has become easy for all the firms to deal with each other using EDI maps.

7. EDI Experienced Personnel: EDI experienced personnel are required to implement each of the EDI
system components and to maintain the specific data for a company’s EDI trading partners.
4.2.3 Benefits of EDI

Replacement of your paper documents with electronic documents has several obvious benefits. Let us
take an example of purchase order to understand it more clearly.

While placing the business order, instead of using paper based purchase order you
can do it instantly by using EDI system.

Following are the advantages of EDI:

1. Reduced Time Delay: There are principally two reasons for the delay while doing business
manually. The first reason is that paper documents may take days to transport from one location
to another and the second reason is manual processing delays, which are caused by typing,
retrieving files, and comparing data. Manual work can be avoided by using EDI.
2. Reduced Labor Costs: In traditional systems, manual processing is required for typing the data,
storing the document, retrieving the data, matching the information, reconciling the data,
stamping, signing, and so on. The labor costs for document processing occupies a significant
proportion of their overall company’s overhead. Labor based processes are more expensive than
non-labor-intensive operations which involve computers and telecommunications.
3. Error Free: The non-EDI systems are usually prone to errors as the data is typed multiple times
and the documents are easily accessible to people when transported, stored, and retrieved. There
is no need for re-entering the data in the EDI system. Thus, it reduces the risk of human error.

4. Removes Uncertainty: In non-EDI processing systems, time delays and uncertainties lead to
storage of large amount of documents and paper works. Inventories are often higher than
necessary. In a manufacturing firm, it is virtually impossible to do a just-in-time inventory system
with the time delays inherent in non-EDI processing systems.
5. Reduced Inventories: In non EDI processing systems, uncertainties and time delays lead to
accumulation of large amount of documents and paper work. EDI can help organizations directly
or indirectly to improve their inventory control. It helps in reducing the inventory costs through
shorter order processing and delivery cycles and by lower inventory levels.

Inventories are usually high in manufacturing industry. It may be practically
impossible to accomplish a Just-In-Time (JIT) inventory system with the time delays
being natural in non-EDI processing systems.
6. Information Access: EDI allows users to access a vast amount of detailed transaction data. Since
EDI data is already stored in computer-retrievable form, it is subjected to automated processing
and analysis.

Do a research on the Internet and discuss the influence of EDI on Indian market.

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