(1) I thought electronic data interchange (EDI) was an old technology, why am I still
hearing about it? EDI refers to the electronic exchange of business information between two
companies using a specific and structured format. The concept has been around since the 1970s
and has traditionally been used to automate buyer-seller transactions such as invoices and
purchase orders. But as more processes within a company become automated, EDI has expended
to areas such as inventory management and product distribution.
(2) How does it work?
EDI relies on standards, or common methods of defining classes of business data, which
allow computers to recognize what data belongs to what department in a company. In the early
days of EDI, many companies built in-house EDI standards, but as interest grew, industries
started to agree on common standards, administered by standards organizations. These standards,
which allow computers in different organizations to share information over privately built, closed
networks known as value-added networks, led to the use of EDI for corporate purchasing.
(3) What are the benefitsF
Consider a very simple non-EDI-based purchase. A buyer decides he needs 365 hammers.
He creates a purchase order, prints it out and pops it in the mail. When the supplier gets the order,
she types it into her company's computer system. The inventory guy pulls the order and ships out
the hammers. Next, the supplier prints out and mails an invoice. It's not hard to imagine that this
process could take several days. EDI has the potential to cut massive amounts of time out of the
process. Sending documents, such as purchase orders or invoices, electronically takes minutes,
not days, and shipments can often go out the day the order comes in. Moreover, the electronic
format does not need to be rekeyed upon arrival, which also eliminates the possibility of typos.
And EDI reduces costs by cutting down on data input, routing and delivery.
(4) What does all of this have to do with the INTERNET
Building an EDI system has traditionally required a substantial investment in some
heavy-duty computers and networking equipment for both parties. Sometimes a large buyer, such
as Wal-mart, will require that all its suppliers be EDI-compliant. That puts a burden on smaller
suppliers, forcing them to choose between a heavy technical investment and a loss of business.
And EDI isn't instantaneous. Because it uses information that frequently resides in mainframes,
the quality of information on an EDI network depends on how frequently the data is refreshed
from the mainframe.
And that's the promise of the Web, which offers much lower connectivity costs. That, added
to the lower costs of PCs and simpler software, makes EDI over the Web a compelling
proposition. Moreover, XML, an open standard for sharing data on the Web, is starting to appear
as a method of coding EDI standards, which could provide technical clarity across industries.
(1) That does e-business really mean
The most basic definition of e-business is simply this: using the Internet to connect with
customers, partners, and suppliers. But the term also implies the transformation of existing business
processes to make them more efficient. To engage in e-business, companies need to be able to unlock
data in their back-end computer systems, so they can share information and conduct electronic
transactions with customers, partners, and suppliers via the Internet. And for some companies,
engaging in e-business means adopting new web-enabled business models-auctioning off surplus
goods, selling products directly to consumers, or joining in online purchasing cooperatives with their
competitors. Without a doubt, embarkingon an e-business effort requires as much thinking about
business strategy as it does about technology.
(2) How is e-business different from e-commerceF
In some instances, the terms are used interchangeably, but to purists, e-commerce refers
only to online transactions. The term e-business encompasses online transactions, but it also
refers to online exchanges of information, such as a manufacturer letting its suppliers monitor
production schedules via an extranet (a secure web site that can be accessed only by authorized
parties), or a financial institution letting its customers review their banking, credit card, and
mortgageaccounts via a single web interface. In this respect, e-business overlaps with the
business-technology disciplines of customer relationship management (CRM) and supply chain
(3) Just how much electronic commerce is being conducted via the Net
Despite all the hype, Internet-based e-commerce currently amounts to only a small fraction of
the U.s. GDP. But experts predict e-commerce volumes will grow exponentially over the next few
years, particularly in business-to-business e-commerce
that is, transactions between businesses
and their suppliers, partners, and business customers. Cambridge, Mass.-based market researcher
Forrester Research Inc. predicts business-to-business e-commerce in the U.S. will grow from
$406.2 billion in 2000 to $207 trillion in 2004. By contrast, Forrester predicts that
business-to-consumer e-commerce in the U.S. will grow from $38.8 billion in 2000 to $184.5
billion in 2004.
(4) Who should be in charge of a company's e-business effort?
In some companies, early web efforts were led by marketing or IT departments as special
projects. But that is starting to change, as e-business becomes a higher priority for the business as
a whole. A recent survey of large global corporations by Pricewaterhouse Coopers and The
Conference Board found that nearly 50 percent of them have full-time units devoted to e-business.
A survey of dotcoms and traditional companies by International Data Corp. (a Darwin sister
company) found that roughly 50 percent of e-business efforts are headed by CEOs.
(5) Have all companies jumped on the e-business bandwagon?
Not yet. Pricewaterhouse Coopers and The Conference Board found that 70 percent of the
global companies they surveyed derive less than 5 percent of their revenues from e-business.
Several factors have kept some companies surveyed from rolling out e-business initiatives,
including the following: potentially high and uncertain implementation costs; lack of demonstrated
ROI within their industry; concern about tax, legal, and privacy issues related to e-business; and
scant use of the internet among their customers.
What is ERP?
(1) I'm tired of pretending I know what ERP is
An enterprise resource planning software, or ERP, doesn't live up to its acronym. Forget
and forget about resource, a throwaway term. But remember the
enterprise part. This is ERP's true ambition. It attempts to integrate all departments and functions
across a company to create a single software program that runs off one database.
That's tall order. Each of those departments, like finance or human resource, typically has its
own computer system, each optimized for the particular department. Typically, when a customer
places an order, the order begins a mostly paper-based journey from in-basket to in-basket around
the company, often being keyed and rekeyed into different computer systems along the way. All
that lounging around in in-baskets causes delays and lost orders, and all the keying into different
computer systems invites errors. Meanwhile, no one truly knows the order status.
(2) So what can ERP do
ERP automates the tasks necessary to perform a business process
such as order fulfillment,
which involves taking and order from a customer, shipping it and billing for it. With ERP, when
a customer service representative takes an order, he or she has all the necessary information
customer's credit rating and order history, the company's inventory levels and the shipping dock's
trucking schedule. Everyone else in the company can view the same information and has access
to the single database that holds the order. When one department finishes with the order, it is
automatically routed via the ERP system to the nest department. To find out where the order is at
any point, one need only log in to the system. With luck, the order process moves like a bolt of
lightning through the organization.
(3) Sounds too good to be true. What's the catch
To do ERP right, your company needs to change the way it does business. And that kind of
change doesn't come without pain. It's critical to figure out if your way of doing business will fit
within a standard ERP package before signing the check. The move to ERP is a project of
breathtaking scope, and the price tags on the front end are enough to make even the most placed
CFO a little twitchy. In addition to budgeting for software costs, financial executives should plan
to write checks to cover consulting, process rework, integration testing and a long list of other
expenses before the benefits of ERP appear. Underestimating the price of teaching users their
new job processes can lead to a rude shock, and so can failure to consider data warehouse
integration requirements and the cost of extra software to duplicate the old report formats.
Oversights in financial planning can send the costs of an ERP project spiraling out of control.
The impact will be far greater than any other systems project you have undertaken.
1, inventory ['invəntri]
2, embark [em'bɑ:k, im-]
3, mortgage ['mɔ:gidʒ]
4, scant [skænt]
5, lounge [laundʒ]
6, twitchy ['twitʃi]