Electronic Data Interchange in Cyber Security

What is Electronic Data Interchange in E-Commerce?

EDI stands for electronic data interchange refers to the computer exchange of structural business information in a standard electronic format. Using EDI, the various trading partners can establish links between their computers to exchange information electronically.

EDI may also be defined as the transfer of structured data between the computers on manually agreed formats known as EDI formats. The organization is converted into EI formats by software or program and it is received by the recipient computer system for direct usage.

The below diagram shows, a company, and its various partner companies like vendors, banks, retailers, distributors, suppliers & Warehouses (store).

Eletronic Data Interchange is necessary in business?

• Using EDI, the various trading partners can establish links between their computers exchange information electronically.
• It elimates the data entry errors to a huge extent.
• The data can be directly used without manual intervention . Hence, it is very helpful in business.

Advantages of EDI:

The main advantage of EDI is over the traditional methods of electronic communication using fax, email, etc are as follows:

• The information or data sent by one company’s computer may be directly used by the recipient’s computer without normal intervation.
• Since standard formats are used for information or dat aexchanges between the computer system, of both organization, it elimates the data entry errors to a considerable events.
• It improves the business cycle of both organization by providing a link for electronic communication between them .
• EDI may be used for communication between more than two campanies.
• Instant delivery of information or data on the prescribed digital formats can be make using EDI.

Disadvantages of EDI:

• As the time of intial set-up of EDI requires more time as well as cost is required.