1. Copyrighted material John Tullis 01/29 /00 EDI Overview John Tullis DePaul Instructor john.d.tullis@us.arthurandersen.com

2. Copyrighted material John Tullis 04/15/00 EDI At the end of this presentation you will: Know the definition of EDI Understand the history & development of EDI Understand standards bodies & how standards are developed Understand a basic EDI information flow Understand EDI industry initiatives & groups

3. Copyrighted material John Tullis Electronic Data Interchange (EDI) The idea behind EDI is to standardize the format of commonly used business documents (such as purchase orders or invoices) so that they can be sent in electronic form from one business computer application to another business computer application.

4. Copyrighted material John Tullis The Problem POPO POPO U.S. Mail - 4 to 6 days Overnight - costly Telephone - error prone Paper, FAX, phone - re- keying

5. Copyrighted material John Tullis EDI Solution Standardized Format Rapid Errorless No re-keying Less Expensive

6. Copyrighted material John Tullis EDI Standards - Definition Electronic Data Interchange (EDI) is the system to system exchange of unambiguous business information in a standard format.

7. Copyrighted material John Tullis EDI Standards - History 1960’s - Private company specific Sears Kmart 1970’s - Public industry specific TDCC (transportation) UCS (grocery) WINS (warehouse) 1979 - American National Standards Institute (ANSI) chartered the Accredited Standards Committee (ASC X12) to develop uniform standards for electronic interchange of business transactions.

8. Copyrighted material John Tullis EDI Standards - History 1980’s - Cross industry implementation of EDI using ANSI ASC X12 standards. 1990’s - International implementation of EDI using UN/EDIFACT 2000’s - Next generation of business messaging? Web forms based EDI? EDIINT - EDI using the internet for transport? OO-EDI - international effort from CEFACT? XML?

9. Copyrighted material John Tullis EDI Standards - X12 Development Process ANSI ASC X12 (American National Standards Institute Accredited Standards Committee X12) Voluntary organization Meets 3 times per year - February, June, October Develops standards in committees Uses consensus process in standards development There are currently 328 transaction sets (10/99)

10. Copyrighted material John Tullis EDI Standards - X12 Versions & Releases Standards (major releases) Voted on by full ANSI membership (e.g. 2000, 3000, 4000…) Rarely (if ever) implemented Draft Standards for Trial Use (sub-releases) Voted on by full X12 membership (e.g. 2030, 3050, 4020…) Are implemented Issue three DTSU’s per year

11. Copyrighted material John Tullis Standards Bodies ASC X12 develops, maintains, interprets, publishes and promotes the proper use of American National and UN/EDIFACT International Electronic Data Interchange Standards. www.X12.org The Data Interchange Standards Association (DISA) is a not-for-profit organization that supports the development and use of electronic data interchange standards in electronic commerce. DISA serves as the secretariat for ASC X12. www.disa.org

12. Copyrighted material John Tullis Standards Bodies As the international focal point for trade facilitation standards and recommendations, UN/ECE develops instruments to reduce and automate procedures and paperwork. The Centre for Facilitation of Procedures and Practices for Administration, Commerce and Transport (CEFACT) develops and maintains the only international standard for electronic data interchange (UN/EDIFACT). This standard is used to exchange structured information between computers and is critical to the implementation of management techniques such as " just-in-time " manufacturing. www.unece.org/cefact

13. Copyrighted material John Tullis Standards Bodies XML.ORG is a self-supporting community resource designed to provide a credible source of accurate, timely information about the application of XML in industrial and commercial settings. Hosted by OASIS, the world's leading independent organization for the standardization of XML applications in electronic commerce, XML.org serves as a reference for XML vocabularies, DTDs, schemas, and namespaces. www.xml.org

14. Copyrighted material John Tullis EDI Procurement Process Purchasing Order Entry InventoryShipping Accounts Payable Accounts Receivable Advanced Ship Notice (856) RFQ Response (843) Purchase Order (850) Request for Quote (840) Payment/Remittance (820) Invoice (810) CustomerSupplier

15. Copyrighted material John Tullis EDI - Initiatives JIT -Just in Time Pioneered by the auto industry ERS -Evaluated Receipts Settlement Eliminates 810 - Invoice VMI -Vendor Managed Inventory Vendor is given shelf space & is expected to maximize their profits Pioneered by the retail industry

16. Copyrighted material John Tullis Industry Groups Retail - VICS Warehouse - WINS Grocery - UCS Petroleum - PIDX - www.pidx.org Utility - UIG - www.uig.org Auto - AIAG - www.aiag.org Chemical - CIDX - www.cidx.org Banking - NACHA (www.nacha.org) - BAI (www.bai.org) Computers - COMPTIA - www.comptia.org UCC - www.uc-council.org www.ecomworld.com/html/weblinks/weblinks.htm JUPUG - Joint Utility Petroleum Users Group

17. Copyrighted material John Tullis Industry Groups Health - HEDIC (www.hedic.org) AFEHCT(www.afehct.org ) WEDI (www.wedi.org) HIPAA (aspe.os.dhhs.gov/admnsimp) Insurance - ACCORD

18. Copyrighted material John Tullis Proprietary Standards Air Transport -Spec 2000 standard Keyword, delimited file Mappings to X12 and EDIFACT www.ata.org Banking - ACH standard Keyword, delimited file CCD - Cash Concentration & Disbursement CCD+ - CCD with one addenda record CTX - Corporate Trade Exchange has 99,999 addenda www.nacha.org www. bai.org Banking - SWIFT

19. Copyrighted material John Tullis Electronic Data Interchange (EDI) This section covered: The definition of EDI The history & development of EDI Standards bodies & how standards are developed A basic EDI information flow EDI industry initiatives & groups

20. Copyrighted material John Tullis Electronic Data Interchange (EDI) At the end of this next section you will: Understand a general EDI architecture & its components Learn basic EDI vocabulary

21. Copyrighted material John Tullis EDI Architecture Since each application has its own internal format & standard, EDI standards were developed to define a common format for each business document. Thus, a translator is needed to convert from internal formats to the standard format. Application System EDI Translator EDI Standards

22. Copyrighted material John Tullis EDI Architecture Application System EDI Translator Communications Interface EDI Data Appl Data Application System EDI Translator Communications Interface Appl Data EDI Data Value Added Network

23. Copyrighted material John Tullis EDI - Terms Trading Partner - The sending and/or receiving party involved in the exchange of EDI transmissions Translator - converts files from one format to another Communications Interface - takes a file, wraps it in a communications envelope, and sends it to a VAN or vice versa Value Added Network (VAN) - provides store & forward mailboxing services http://pages.prodigy.com/edibooks/edigloss.html

24. Copyrighted material John Tullis EDI Communications Communications management becomes more complicated with each additional trading partner so VAN’s are used. Company ACompany B Company A Company B Company C Company D Dial-up  

25. Copyrighted material John Tullis Value Added Network Value Added Networks Company A Company B Company CCompany D The VAN takes care of the communication conversions between trading partners.

26. Copyrighted material John Tullis VAN Interconnections VAN connections allow Companies A, B, and D to reach Company C on another VAN. Can’t interconnect through to a 3rd VAN. Value Added Network Company A Company B Company CCompany D Value Added Network

27. Copyrighted material John Tullis EDI - Value Added Networks (VANs) VAN (Value Added Network) allows the exchange of data between trading partners by providing mailbox (store & forward) services. Provide routing services for each trading partner Independent third party Provide non-repudiation on message delivery Security 24 x 7 reliability Redundancy Added Services Header conversions EDI to fax conversion Archiving Re-transmissions Carbon copies Check for missing batches Compliance checking for adherence to standards

28. Copyrighted material John Tullis VAN Pricing In general, the sender pays to send a transmission and the receiver pays to receive a transmission. Some VANs allow charges to be split between the trading partners. e.g. 100% to one, 75%-25%... Each VAN has their own pricing scheme making comparison difficult. They also offer volume discounts. In general, pricing is based on some combination of: Envelope charge Number of segments within the envelope Kilo-character charge Rule of thumb - Each transaction is less than the cost of a stamp.

29. Copyrighted material John Tullis EDI Over the Internet EDIINT - EDI Over the Internet - www.ediint.org Viewed as a cost saver Companies need to carefully evaluate savings based on a risk assessment. For example: Adding & maintaining security Providing backups Providing retransmissions Building non-repudiation into the process (ensure that “they got it”) Monitoring & follow-up to ensure that transmissions are received Reliability/redundancy

30. Copyrighted material John Tullis EDI Architecture EDI Data Appl Data Application System EDI Translator Communications Interface Value Added Network Purchasing Order Entry SAP BAAN, etc. IBM’s DataInterchange GEIS’ Application Integrator Harbinger (TI, Supply Tech, Premenos) Sterling’s Gentran TSI’s Mercator IBM’s Information Exchange GEIS Sterling’s Connect Products IBM’s Advantis GEIS Sterling Kleinschmidt, AT&T, MCI, Sprint, etc. EDI/TP Management EDIFECS Foresight

31. Copyrighted material John Tullis EDI - Components Segment is a collection of related information called data elements Data element is the smallest unit of information N1*ST*Pete Painfree N/L Segment Element Delimiter Element Segment Delimiter

32. Copyrighted material John Tullis EDI Structure ISA GS ST …transaction set (e.g. PO) SE ST …transaction set (e.g. PO) SE GE GS …ST… PO Change…SE GE IEA Interchange Envelope Functional Group Envelopes Transactions Trans

33. Copyrighted material John Tullis EDI Structure ISA GS ST …transaction set (e.g. PO) SE ST …transaction set (e.g. PO) SE GE GS …ST… PO Change…SE GE IEA Interchange Envelope ISA Control Number ISA Control Number & # of Functional Groups

34. Copyrighted material John Tullis EDI - Envelopes - ISA/IEA Element Delimiter Segment Delimiter ISA*00* *12* 5555555555*12* 4444444444* 991109*1008*U*00402*123456789*1*T*~ N/L Sub-element Separator ISA Receiver IDISA Sender ID ISA Control # IEA*1*123456789 N/L

35. Copyrighted material John Tullis EDI Structure ISA GS ST …transaction set (e.g. PO) SE ST …transaction set (e.g. PO) SE GE GS …ST… PO Change…SE GE IEA Functional Group Envelopes Group Control Number Group Control Number & # of Transaction Sets

36. Copyrighted material John Tullis EDI - Envelopes - GS/GE GS*PO*5554443333*4443332222*19991109*0845* 456789012*X*0004020 N/L GS Receiver IDGS Sender ID GS Control # Group ID Standards Version GE*1*456789012 N/L # Trans Sets

37. Copyrighted material John Tullis EDI Structure ISA GS ST …transaction set (e.g. PO) SE ST …transaction set (e.g. PO) SE GE GS …ST… PO Change…SE GE IEA Transactions Trans Transaction Set Control # # of Segments & Transaction Set Control #

38. Copyrighted material John Tullis EDI - Envelopes - ST/SE ST*850*890123456 N/L ST Control # Transaction Set SE*21*890123456 N/L Segment Count

39. Copyrighted material John Tullis EDI Structure ISA GS ST …transaction set (e.g. PO) SE ST …transaction set (e.g. PO) SE GE GS …ST… PO Change…SE GE IEA Interchange Envelope Functional Group Envelopes Transactions Trans

40. Copyrighted material John Tullis Electronic Data Interchange (EDI) This section covered: General EDI architecture & components A basic EDI vocabulary

41. Copyrighted material John Tullis EDI - Transaction Sets Transaction Set Represents a business process such as purchase orders, invoices, transcripts... Composed of Segments Consists of header, detail, and summary areas

42. Copyrighted material John Tullis Invoice Create an EDI Purchase Order (850) based on the following paper invoice. Assignment!!!

43. Copyrighted material John Tullis Purchase Order

44. Copyrighted material John Tullis BEG*00*NE*34561**19991109**RD*IEL N/L Purchase Order

45. Copyrighted material John Tullis N1*BY*H&P Emporium N/L N3*2000 Translator Drive N/L N4*Dallas*TX*75201 N/L PER*AE*Heidi Happy*TE*5555555555 N/L BEG*00*NE*34561**19991109**RD*IEL N/L Purchase Order

46. Copyrighted material John Tullis N1*ST*Pete Painfree N/L N2*H&P Warehouse N/L N3*5410 Secret Passage N/L N4*Plano*TX*75299 N/L N1*BY*H&P Emporium N/L N3*2000 Translator Drive N/L N4*Dallas*TX*75201 N/L PER*AE*Heidi Happy*TE*5555555555 N/L BEG*00*NE*34561**19991109**RD*IEL N/L

47. Copyrighted material John Tullis N1*ST*Pete Painfree N/L N2*H&P Warehouse N/L N3*5410 Secret Passage N/L N4*Plano*TX*75299 N/L PO1*001*512*EA*1.00**VP*1010100 N/L PID*F*Regular Strength Aspirin N/L PO1*002*45*CA*50.00**VP*1010110 N/L PID * F*Extra Strength Aspirin N/L N1*BY*H&P Emporium N/L N3*2000 Translator Drive N/L N4*Dallas*TX*75201 N/L PER*AE*Heidi Happy*TE*5555555555 N/L BEG*00*NE*34561**19991109**RD*IEL N/L

48. Copyrighted material John Tullis N1*ST*Pete Painfree N/L N2*H&P Warehouse N/L N3*5410 Secret Passage N/L N4*Plano*TX*75299 N/L PO1*001*512*EA*1.00**VP*1010100 N/L PID*F*Regular Strength Aspirin N/L PO1*002*45*CA*50.00**VP*1010110 N/L PID * F*Extra Strength Aspirin N/L CTT*2*2787.00 N/L AMT*TZ*25.00 N/L AMT*5*2787.00 N/L N1*BY*H&P Emporium N/L N3*2000 Translator Drive N/L N4*Dallas*TX*75201 N/L PER*AE*Heidi Happy*TE*5555555555 N/L BEG*00*NE*34561**19991109**RD*IEL N/L

49. Copyrighted material John Tullis EDI - Purchase Order (850) ISA*00* *12* 5555555555*12* 4444444444*991109*1008*U*00402*123456789*1*T*~ N/L GS*PO*5554443333*4443332222*19991109*0845*456789012*X*0004020 N/L ST*850*890123456 N/L BEG*00*NE*34561**19991109**RD*IEL N/L N1*SE*Alfred Able N/L N2*Acme Aspirin Company N/L N3*101 XML Parser Trail N/L N4*Kauai*HI*99293 N/L N1*BY*H&P Emporium N/L N3*2000 Translator Drive N/L N4*Dallas*TX*75201 N/L PER*AE*Heidi Happy*TE*5555555555 N/L N1*Pete Painfree N/L N2*H&P Warehouse N/L N3*5410 Secret Passage N/L N4*Plano*TX*75299 N/L PO1*001*512*EA*1.00**VP*1010100 N/L PID*F*Regular Strength Aspirin N/L PO1*002*45*CA*50.00**VP*1010110 N/L PID*F*Extra Strength Aspirin N/L CTT*2 N/L AMT*TZ*25.00 N/L AMT*5*2787.00 N/L SE*21*890123456 N/L GE*1*456789012 N/L IEA*1*123456789 N/L

50. Copyrighted material John Tullis Invoice Create an EDI Invoice (810) based on the following paper invoice. Assignment!!!

51. Copyrighted material John Tullis

52. Copyrighted material John Tullis ISA* GS* ST* BIG* N1* N2* N3* N4* N1* N3* N4* PER* N1* N2* N3* N4* IT1* PID* PO1* PID* TDS* TXI* AMT* CTT* SE* GE* IEA* Invoice

53. Copyrighted material John Tullis N1*SE*Acme Aspirin Company N/L N3*101 XML Parser Trail N/L N4*Kauai*HI*99293 N/L BIG*19991115*14367899*19991109*34561 N/L N1*ST*Pete Painfree N/L N2*H&P Warehouse N/L N3*5410 Secret Passage N/L N4*Plano*TX*75299 N/L IT1*2*45*CA*50.00**VP*1010110 N/L PID*F****Extra Strength Aspirin N/L IT1*1*512*EA*1.00**VP*1010100 N/L PID*F****Regular Strength Aspirin N/L TDS*2767.00 N/L AMT*TZ*25.00 N/L CTT*2 N/L

54. Copyrighted material John Tullis ISA*00* *00*12*4444444444*12*5555555555*991115*2345*U*00400*678901234 N/L GS*IN*4443332222*5554443333*19991115*2330*901234567*X*004010 N/L ST*810*712345678 N/L BIG*19991115*14367899*19991109*34561*00 N/L N1*ST*Pete Painfree N/L N2*H&P Warehouse N/L N3*5410 Secret Passage N/L N4*Plano*TX*75299 N/L N1*SE*Acme Aspirin Company N/L N3*101 XML Parser Trail N/L N4*Kauai*HI*99293 N/L N1*BY*H&P Emporium N/L N3*2000 Translator Drive N/L N4*Dallas*TX*75201 N/L PER*AE*Heidi Happy*TE*5555555555 N/L IT1*2*45*CA*50.00**VP*1010110 N/L PID*F****Extra Strength Aspirin N/L IT1*1*512*EA*1.00**VP*1010100 N/L PID*F****Regular Strength Aspirin N/L TDS*2767.00 N/L AMT*TZ*25.00 N/L CTT*2 N/L SE*21*712345678 N/L GE*1*901234567 N/L IEA*1*678901234 N/L Invoice

55. Copyrighted material John Tullis Remember - Electronic Data Interchange (EDI) is the system to system exchange of unambiguous business information in a standard format. What has happened recently where data was misinterpreted? EDI - Unambiguous Information

56. Copyrighted material John Tullis EDI - Unambiguous Information Data was exchanged in proprietary file formats. One group sent data in English measures & the other used metric measures. NASA’s Mars Climate Orbiter Believed To Be Lost September 23, 1999 NASA/JPL/Caltech

57. Copyrighted material John Tullis EDI - Legal Issues Trading Partner Agreement (TPA) - defines the terms and conditions for exchanging business documents electronically Generally based on the model trading partner agreement from the American Bar Association (www.abanet.org) Sometimes part of a larger business agreement Contains documents for exchange, timing of exchanges, networks used Not required by some trading partners

58. Copyrighted material John Tullis EDI - Audit & Control Functional Acknowledgment (997) is the EDI equivalent to the post office’s “return receipt requested” form. Should be a required response to all transaction sets Automatically generated by the translator “Good” 997 indicates that the transaction is syntactically correct, nothing more Provides proof-of-delivery (non-repudiation) Must be tracked. Follow up missing 997’s with trading partner Non-repudiation Functional acknowledgment (997) Application acknowledgment (824, 855) VAN reports Mailbag/TA3 (for interconnects)

59. Copyrighted material John Tullis EDI - Trading Partner Management Trading Partner Information Must keep contact name (both business & technical) for all transaction sets Need to keep a call tracking history Need to keep track of trading partner change requests Version control/migration Some industries use the convention that only the current and 2 prior versions are maintained Takes about 18 months for a Hub to migrate off a version Suppliers versions are dictated by their customer’s capabilities Implementation guides Most industries have created an implementation guide to define what segments and qualifiers are acceptable. This provides a normalization of the data.

60. Copyrighted material John Tullis EDI - Security Most EDI sent through a VAN is not additionally secured. The subject matter expert determines the need for security. X12 supports both encryption & authentication Security segments are inserted between the ISA/IEA and GS/GE envelopes. Financial transactions are secured by encryption. This is generally dictated by the bank.

61. Copyrighted material John Tullis EDI Structure ISA GS ST …transaction set (e.g. PO) SE ST …transaction set (e.g. PO) SE GE GS …ST… PO Change…SE GE IEA Interchange Envelope Functional Group Envelopes Transactions Trans Security Segments

62. Copyrighted material John Tullis Barriers to EDI Implementations Too difficult to implement Too expensive, especially for the small to medium enterprise (SME) Cost of translator & network Lack of programming expertise Applications aren’t integrated Takes too long to make changes to the standards Standards have become too generic and require industry implementation guides Business rules are not retained with the standard

63. Copyrighted material John Tullis XML-EDI  Takes the existing ASC X12 EDI standards and develops XML DTD’s  Naming guidelines, etc have been developed What’s Next? - XML

64. Copyrighted material John Tullis EDI - XML Initiatives X12 Communications & Control Committee has published a tutorial detailing how to render an X12 document into XML. ASC X12 syntax: N4*Dallas*TX*75201 N/L Corresponding XML syntax: Dallas TX 75201

65. Copyrighted material John Tullis EDI - XML Initiatives UN/CEFACT Announced on 09/20/99 a joint work effort with OASIS to develop a technical framework to enable XML to be used in a consistent manner for exchanging all electronic business data. 18 month project Results to be posted to XML.org and uncefact.org Co-chaired by Klaus-Dieter Naujok/Harbinger & Bob Sutor/IBM www.unece.org select XML Initiative

66. Copyrighted material John Tullis EDI & XML EDI ain’t broke….it isn’t dead….it isn’t going away in the near term…. Corporations have large investments in EDI and EDI serves the 20% of the trading partners that comprise 80% of the business. It’s the other 80% of the trading partners - the small to medium enterprises - where XML has potential. Thus, XML opportunities will be found masking as EDI problems/opportunities.