1 Why are we here today ???

2 Greater than 90 TRILLION sheets of paper are produced by American business annually > 90,000,000,000,000 W O W !

3 EC Strategy Move From Paper Intensive Non - Integrated Automated Integrated Create Data Once - Use It Many Times!

4 The World of Electronic Commerce EC Tech Data EI EBB EDI CE JIT VMI InterNet Barcoding FAX EC

5 MODULE 1 OBJECTIVES l At the completion of this module, you will be able to: – Define EDI – Explain EDI Terminology – Describe the background of EDI – Explain some benefits of EDI

6 ELECTRONIC DATA INTERCHANGE Module 1 Definitions Background Benefits

7 ELECTRONIC DATA INTERCHANGE EDI is the computer-to-computer exchange of routine business documents (data) in a standard format between companies. COMPANY A COMPANY B TRANSACTION DATA

8 VALUE ADDED NETWORK (VAN) Post Office Seller Buyer

9 EDI Trading partners are companies that do business via EDI. TRADING PARTNER

10 EDI Purchase Order (PO) PO Purchaser A transaction set refers to a type of electronic document. TRANSACTION SET

11 PAPER DOCUMENT INTERCHANGE Computer Post Office PO Purchaser Computer Data Entry Invoice

12 ELECTRONIC DATA INTERCHANGE Computer VAN Purchaser Computer Data Entry Invoice PO

13 EC is Cross Functional Implementation Accounting Order Processing Account Executives Infomation Systems Shipping EDI has an impact on all departments

14 Considerations for System Design Determine Requirements Determine Readiness Select Participants EDI System Implementation

15 Support areas Accounting Order Processing Transportation Technical Areas Electronic Commerce Information Systems Liaison Areas Implementation Marketing Sales

16 ?? Questions ?

17 ELECTRONIC DATA INTERCHANGE Module 2 Components

18 MODULE 2 OBJECTIVES l At the completion of this module, you will be able to: – List the four major components of an EDI system – Recall the terms VAN, ANSI X-12,and their meaning – Recall reasons why companies are doing EDI

19 EDI Components Hardware Standards EDI Software Communications

20 EDI PO Purchaser Transaction set refers to a type of electronic document Transaction Set

21 WITH STANDARDIZATION Type a who will bunch of things in her again. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long.

22 Components ELECTRONIC DATA INTERCHANGE STANDARDS ANSI X12 UN/EDIFACT

23 Other Standards Transportation Data Coordinating Committee (TDCC) Uniform Communications Standard (UCS) Warehouse Information Network (WINS) Voluntary Inter-Industry Communication Standard (VICS) EDI for Administration, Commerce, and Trade (EDIFACT)

24 TYPES OF BUSINESS TRANSACTIONS VIA EDI Purchase Orders 44% Invoices 24% Other 15% Shipping Note 14% Credit/Debit 3%

25 A Standard Language Type a who will bunch of things in her again. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long.

26 How EDI Works ! quote The APL Group 664 danbury Ct Wilson, ct RFQ # /07/95 1 WIDGET # dz gizmos ST* NTE ** Ship Complete N1 *SE* The Apl Grp Inc... N3 * 664 DANBURY Converts Internal Data Format to ANSI X12 (outbound) Converts ANSI X12 Standard format to Internal Format (inbound)

27 EDI Components Hardware Standards EDI Software Communications

28 EDI Software X12 Database 1. Document Support 2. Mapping 3. Standards Support 4. Translation Communicati ons

29 EDI Components Hardware Standards EDI Software Communications

30

31 EDI Components Hardware Standards EDI Software Communications

32 Value Added Network (VAN) U.S. Post Office Buyer Seller

33 Point-to-Point: EDI Without a VAN Buyer A B C D Supplier

34 Value Added Network (VAN): A B C D BuyerSupplier

35 Interconnect Strategy GE VAN AT&T VAN

36 ---EDI Process Integrated Systems--- Business Management System Business Management System Accounting Receiving Manufacturing Purchasing EDI Shipping Accounting Sales/Order Processing Order Processing Purchase Order Purchase Order Acknowledgment

37 Data integration Issues Networking Users Part List Partner’s Part List Cross-referencing EDI Software Database Integrated Applications Database New Data Bridge Between Applications

38 EC GROWTH *Source: EDI Forum Number of Registered EDI Users. Average Annual Growth ~ 45% 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 45, ,000 94

39 Percent Customer/supplierrequirement Cost savings Data accuracy/error reduction Quick access to data In 1996, EDI grew substantially due to customer / major supplier requirements or requests. EDI is an element used to streamline business processes. business processes. Why do Companies use EDI? 0% 10% 20% 30% 40% 50% 60%

40 EDI USERS Government Health care Retail Grocery Transportation Policy Insuranc e Manufacturing AutomotivePetroleumElectronicsChemicalBanks Construction Advertising

41 ?? Questions ?

42 Manufacturing Focus EDI EFT Internet (IT) VMI Bar-Code ERS JIT BPR Maximum benefits are obtained when EDI is coupled with BUSINESS PROCESS CHANGE

43 EDI BENEFITS More Accurate Records and Decision-making Information Lower Data Entry Costs Increased Business Opportunities Reduced Inventory

44 EDI BENEFITS Better Cash Management Decreased Mailing CostsGreater Customer Satisfaction Reduction In Order Time

45 Bar-Code

46 EDI and Business Processes EDI EFT Internet (IT) VMI Bar-Code ERS JIT BPR Maximum benefits are obtained when EDI is coupled with BUSINESS PROCESS CHANGE

47 ?? Questions ?

48 ELECTRONIC DATA INTERCHANGE Module 3 EDI Translation

49 Module 3 Objectives l At the completion of this module, you will be able to: – Relate the paper document components to EDI transaction set – Recall the sections of an EDI transaction set

50 ANSI ASC X12 Standard Purchase Order Facilitates electronic interchange of business documents Purchase Order

51 Transaction Set Composition File = Transaction Set Record = Data Segment Field = Data Elements

52 Vendor: Date:Purchase Order # PURCHASE ORDER Ship To: QuantityDescriptionPriceAmount ABC Supplies P.O. Box 180 Baltimore, MD /31/92 Cleveland ECRC 2415 Woodland Avenue Cleveland, OH Legal Pads LP8X11 $8.00/DZ $16.00 Paper Vs. EDI Document ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland, OH 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 Paper Document = EDI Transaction Set

53 Envelopes Address Information Date and Time Stamp Information Receipt Information Routing Audit and Version Control

54 Envelope Elements Identification Information Batch Control Information Addressing Information

55 Trading Partner Enveloping Issues Envelope Identiffers Addressing codes Types of control numbers Control number sequence Version of standards

56 Envelope Structure ISA IEA Interchange

57 Paper Vs. EDI Document Cleveland ECRC [electronic address] ABC Company [electronic address] Envelope = Interchange ISA*05* *01*PASSWORD01*01* SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503*U *00304* *1*T*|^ GS... ST.... SE... GE... IEA*1* ^

58 Paper Vs. EDI Document Folder = Functional Group GS*PO*CECRC01*DISC* *1426* 0001*X*003050^ ST*850*1001. SE*17*1001 GE*1*0001

59 ISA IEA GS GE Envelope Structure ISA*05* *01*PASSWORD01*01 *SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503* U*00304* *1*T*|^ GS... ST.... SE... GE... IEA*1* ^

60 ISA IEA GS GE ST SE ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland *OH* 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 Transaction Set

61 Transaction Set 850 Document = Transaction Set Document Paper Vs. EDI Document ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland, OH 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 Vendor: Date:Purchase Order # PURCHASE ORDER Ship To: QuantityDescriptionPriceAmount ABC Supplies P.O. Box 180 Baltimore, MD /31/92 Cleveland ECRC 2415 Woodland Avenue Cleveland, OH Legal Pads LP8X11 $8.00/DZ $16.00

62 Data Segment Vendor: Date:Purchase Order # PURCHASE ORDER Ship To: QuantityDescriptionPriceAmount 2 Legal Pads LP8X11$8.00/DZ $16.00 PO1*1*2*DZ*8.00**VP*LP8X11^ Line Item = Data Segment

63 Paper Vs. EDI Document N1*VN*ABC Supplies^ 4001 Vendor: Date:Purchase Order # PURCHASE ORDER Ship To: ABC Supplies P.O. Box 180 Baltimore, MD /31/92 Cleveland ECRC 2415 Woodland Avenue Cleveland, OH Data Elements

64 Paper Vs. EDI Document N1*VN*ABC Supplies^ Code = Qualifier Separator = Element Delimiter Data Segment Delimiter

65 Summary ISA IEA GS GE ST SE ISA*05* *01*PASSWORD01*01* SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503*U* 00304* *1*T*|^ GS... ST.... SE... GE... IEA*1* ^ Communications Protocol

66 Module 3 Summary – The paper business document and its components can be compared with the EDI transaction set. – EDI enveloping can be compared functionally to postal envelopes. – EDI Software translates business documents into a standard format for transmission

67 ?? Questions ?

68 Organizational Issues in EC/EDI Implementation Move From Paper Intensive Non - Integrated Automated Integrated Mind Sets Cultural Change Conveying Key Messages Building a Case for Action Bottom Up Support Selecting EC Technologies Linking EC Technologies to Business Results

69 Organizational Issues in EC/EDI Implementation Two Key Messages: – Here is where we are and why we can’t stay here. – This is the company we must become. People must buy-in! Supplier/Customer Mandate Increased Competition Globlization of the Marketplace Reduce Costs

70 Organizational Issues in EC/EDI Implementation Elements of an effective case for action: –Business context –Problem –Marketplace demands –Diagnosis –Cost of no action

71 o Increased competition and a rapidly changing business environment have forced the implementation of technology in businesses of every size. o Implementing Electronic Commerce can position your company to compete with a wide range of competitors. o A small business has the advantage of skipping layers of management when implementing electronic commerce. Execution can happen quickly, risk free, and at a low cost. Organizational Issues in EC/EDI Implementation

72 Organizational Issues in EC/EDI Implementation How to bring people into the change process. “Start with reality. Get all the facts out. Give people the rationale for change, laying it out in the clearest, most dramatic terms. When everybody gets the same facts, they’ll generally come to the same conclusions.” J. Welch, CEO of General Electric “To inaugurate large-scale change, you may have to create the burning platform. You have to give people a reason to do something differently. Scaring people isn’t the answer. You have to appeal to them. The more they understand why you want to change, the easier it is to commit to it.” L. Bossidy, CEO of Allied-Signal Fortune Magazine, Dec 13, 1993

73 Organizational Issues in EC/EDI Implementation The cost of integration in the absence of a cultural change actually are higher. This is true because a new technical system has been introduced within the old culture. –The organization retains redundant processes. –Non concurrent processes slow the cycle. –Hand-offs further slow the process. –Creates an environment for error. –Rework is a characteristic. These findings are especially pertinent today because of the need to lower costs, the requirements to be flexible and the ability to take advantage of the opportunities.

74 1st tier Virtual Enterprise Electronic Communication(EC) Vision for the Future Prime Contractor Vendor 2nd tier Vendor 1st tier Prime Contractor 3,000 Pound Gorilla 1st tier

75 ?? Questions ?