1. Routing business data: EDI can be used in routine business documents like Purchase Orders and Invoices while It cannot be used in non-routine business documents like complicated contracts or information meant for humans to read and analyze .
· Advantage of EDI system :
Ø Saving a company money by providing an alternative to, or replacing information flows that need a great deal of human interaction and materials such as paper documents, meetings, faxes.
Ø Allows a company to take advantage of the benefits of storing and manipulating data electronically without the cost of manual entry.
Ø Reduced errors, such as shipping and billing errors, because EDI eliminates the need to rekey documents on the destination side.
o EDI has a lot of characteristics make it very useful, such as:
Speed – data can directly transfer out of one computer system and into another without any delay.
Accuracy – Errors are reduced by using EDI that because data is not being re-keyed.
Simplicity – EDI standards specify how data will be formatted and where it can be found.
Security – Much less likely to lose information transmitted through EDI than information sent via mail. EDI can be accessed only by authorized users, and then there are audit trails and archives of data. EDI data cannot be easily changed by unauthorized users. It is also not subject to viruses
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