Internet based EDI

• Several factors make the Internet useful for EDI:

1. Flat pricing:- this is not depend on the amount of information

transferred

2. Cheap access:- with low cost connection- often a flat monthly fee for
leased line or dial-up access

3. Common mail standards:- they are nonproprietary and handle

congestion & message routing exceptionally well

4. Security:- public key encryptions techniques are being incorporated

in various electronic mail systems.
 Internet EDI & US department of
defense

• Using internet as a communication medium for transfer of EDI data

transactions has been pioneered by the US government & education
community.

• A big user of internet EDI is the US Department of defense (DOD)

• The DOD’s experience suggests that VANs and Internet mail can
interoperate to provide a seamless environment in which each
partner can select a VAN or the Internet as their communication
gateway
 The SPEEDE project
• The transfer of student transcripts between educational
establishments has traditionally been a source of much frustration
for all the parties involved.

• Florida, Texas & other pioneer states have developed their own file
formats for exchanging transcripts between k-12 schools & colleges

• In 1988 American Association of Collegiate Registrars & Admissions

Offices appointed a task force called SPEEDE (Standardization of
Postsecondary education Electronic Document Exchange) for study
how students transcripts could be exchanged nationally. .

• Another is ExPRESS (Exchanging Permanent Records Electronically for

Students and Schools) by National Center for Educational Statistics to
study transcript transfer for prekindergarten to 12th grade
• The two task forces then collaborated to define a single set, the
Student Educational Record (130), which accommodates K-12
and college transcripts.

• In February 1992, this transaction set which contains the joint

SPEEDE/ExPRESS format was formally adopted as an ANSI ASC
X12 standard.

• The American National Standards Institute (ANSI) chartered the Accredited Standards
Committee (ASC) X12 to develop uniform standards for inter-industry electronic
exchange of business transactions, namely electronic data interchange.
 VAN- free internet EDI
• Using internet for directly exchanging EDI messages without going
through a VAN (Value Added networks).

• Trading partners must agree on the protocols for exchanging message

and then agree on some details with the exchange.
 E-mail based messaging
• The simply & most widely supported means of exchanging messages
is via e-mail

• The trading partners would the exchange the following for this;

1. The email address of EDI messages & another for personal

communication
2. Agreement on the encryption & digital signature protocols,
including acknowledgement
3. Public key for PEM or PGP encryption & digital signature
4. Agreement on the formats of the message eg.- X.12
FTP- based messaging
• To exchange EDI message via FTP , some set-up information
must be included in the trading partner agreement.

• Typically an account would be created for each trading partner

for FTP log-in including password.

• The trading partner agreement include:-

1. FTP login name & password
2. Directory & file naming conventions
3. File encryption protocols & keys
4. Wrappers around EDI data
5. Agreement on message formats
 EDI gateways
• EDI gateways are being built that act as communication hubs
between different sections of the same organization or with outside
trading partners.

• Its necessary when using different standards.

• Common gateway facilities include:

1. EDI message construction & translation
2. Translation between application software packages
3. Translation between in-house standards
4. Queue management for both inbound & outbound documents
5. Security & management features
6. Full delivery audit facilities
Etc…
 Internal information systems
• Business forces driving internal commerce are the economic &
competitive market forces.

• These forces commanding a rethinking of the importance of

networks- computer & communications.

• Peter Ducker stated:- “ Communications & information are totally

different, but information pre-supposes functioning
communications (infrastructure)
 Proprietary systems as differentiators

• Companies are reframing from introducing proprietary architecture &

systems.

• The old paradigm was captured briefly in 1984, when Warren

McFarlan published an influential article in the Harvard Business
Review on the competitive potential of information technology.

• He asked managers to consider;

1. How information systems might benefit their companies?
2. Could technology build barriers to competitive entry?
3. Could it increase switching costs for customers?
4. Could it change the balance of power in supplier relationship?

• He went on argue with companies & the reply was yes. The result
was a focus on proprietary systems.
• The following well known computer systems are representative of
an important chapter in the application of computing to build
competitive advantage and enhance organizational effectiveness;

1. SABRE- American Airlines reservation system

2. COSMOS- Federal Express’s customer service system –(tracks every
movement of every package in the network)
3. American Hospital Supply’s ASAP, order-entry and inventory-control
systems for company’s medical product
4. McKesson – the pharmaceutical wholesaler
5. United Service Automobile Association (USAA) – used in
Automated Insurance Environment
6. Etc.
 A new paradigm: Information Architecture

• The focus of the new paradigm lies in creating a information

architecture that enables cross-functional systems & better
information utilization.

• Cross functional systems: it emphasis on integrating the enterprise

with information flowing from one business area to another .

• Information not data: the focus of competitive differentiation today is

not on building better systems than that of the competitors, but is
based on the use of corporate information
 Work flow automation &
coordination
• A vision of speeding up or automating routine business tasks has
come to be known as work-flow automation

• This vision has its roots in the invention of the assembly line & the
application of Taylor's (American manufacturing manager) Scientific
management Principles.

• The goal of this methodology is to offer more timely, cost-effective

and integrated ways to make decisions.
• The Principles of Scientific Management is a monograph published
by Frederick Winslow Taylor in 1911. This influential monograph, which laid
out the principles of scientific management, is a seminal text of modern
organization and decision theory and has motivated administrators and
students of managerial technique. Taylor was an American manufacturing
manager, mechanical engineer, and then a management consultant in his
later years. He is often called "The Father of Scientific Management." His
approach is also often referred to, as Taylor's Principles, or Taylorism.

• Taylor' scientific management consisted of four principles:

1. First. They develop a science for each element of a man's work, which
replaces the old rule-of-thumb method.
2. Second. They scientifically select and then train, teach, and develop the
workman, whereas in the past he chose his own work and trained
himself as best he could.
3. Third. They heartily cooperate with the men so as to ensure all of the
work being done in accordance with the principles of the science which
has been developed.
4. Fourth. There is an almost equal division of the work and the
responsibility between the management and the workmen. The
management take over all work for which they are better fitted than the
workmen, while in the past almost all of the work and the greater part
of the responsibility were thrown upon the men.
 Work flow coordination
• The key element of a market-driven business is the coordination of
tasks and other resources throughput the company to create value
for customers.

Eg: Lotus Notes:- is an network based , automated alternative to paper

documents.
 Work flow related technology
• Managerial talk paying homage to the team based concept & cross
functional coordination alone is not sufficient unless it can be blocked up
with implementation.

• In other words technology must be the engine for driving initiatives to

streamline & transform business transactions

• For that needs to focus attention on today’s realities & actual market trend,
they include;
1. Middleware is maturing
2. Organizational memory is becoming practical
 Supply chain management
• Supply chain management (SCM) is the management of the flow of
goods.

• It includes the movement and storage of raw materials, work-in-process

inventory and finished goods from point of origin to point of consumption.

• Interconnected or interlinked networks, channels and node businesses are

involved in the provision of products and services required by end customers
in a supply chain.
 Supply chain management (SCM)
• SCM is an integrating process based on the perfect delivery of basic & customized
services.

• It optimizes information & product flows from the receipt of the order, to purchase
of raw material, to delivery & consumption of finished goods.

• Its important in retailing because it helps to manage the demand and supply
functions.
• SCM is in stark contrast to the traditional approach, whereby
executives think in terms of component activities such as forecasting,
purchasing, production planning or warehousing.

• Typically these activates were managed in a fragment manner, and so

it was not uncommon to find them under separate functions that do
not share information.

• SCM is important in retailing because it helps manage the demand

and supply functions.
• SCM characteristics:

1. Ability to source raw material or finished goods from anywhere in world.

2. Centralized, global business & management strategy with flawless local execution.

3. On-line, real-time distributed information processing to the desktop.

4. Ability to manage information not only within company but across industries &
enterprises.

5. Seamless integration of all supply chain process & measurements including third
party suppliers, information system, measurement systems, cost accounting
standards etc.

6. Development & implementation of accounting models such as activity-based

costing

7. Reconfiguration of Supply Chain organization into high-performance teams going

from the shop floor to senior management
• 2 primary models of supply chain is shown below; pull v/s push model
• Primary elements of these models are;

1. Logistics & distribution (integrate logistics): integration of materials

management & physical distribution.

2. Integrated marketing & distribution: will help to integrate customer

directly & react to changes in demand by modifying the supply chain.

3. Agile manufacturing: Agile manufacturing is a term applied to an

organization that has created the processes, tools, and training to enable it
to respond quickly to customer needs and market changes while still
controlling costs and quality.

• Consumers and manufacturers are stressing quality and speed.

 Integrated logistics & manufacturing
• Deals with integration of materials management & physical
distribution.

• Logistics applies to the coordination & handling of all aspects of the

movement of raw materials components, semi finished goods &
finished goods.

• Components of logistics include:

1. handling the movement of raw materials & goods for resale ( for
retailers) ,
2. warehousing,
3. customer brokerage &
4. distribution to a final destination.
 Purchasing & inbound logistics
• Logistics replaced classic supply chain for procuring materials-
planner to buyer to salesman to supplier plant- with a more
streamlined process where by

• the “ in - plant ” planner operating directly from the computer

system sends the purchase orders to the supplier plant, in effect
elimination the middlemen on both sides.
 Integrated marketing & logistics
• Marketing may define the way a company does business

• In this time of exploding choice, cutthroat competition & unpredictable shifts in

demand , integrated marketing could be the key to survival.

• Sales, advertising and marketing are fast emerging as hot subjects for technology
oriented business professionals.
 Efficient customer response (ECR)

• The retail industry is pinning its hope for better margins on efficient
consumer response (ECR).

• Theoretically; ECR is expected to reduce costs by $30 billion , about

10% of the total by reforming the retailing industry’s buying habits &
moving towards continuous product replacement to get inventory
into the store faster
 Agile manufacturing
• Agile manufacturing is a term applied to an organization that has
created the processes, tools, and training to enable it to respond
quickly to customer needs and market changes while still controlling
costs and quality.

• At first it sounds like another way of describing lean/flexible

manufacturing approach ( which eliminates inventory & other forms
of waste)

• It implies breaking out of the mass-production mold & producing

highly customized products- when & where the customers wants
them.
• In future agility require new & innovative manufacturing practices
like;

1. Quick manufacturing & distribution of customer design products

such as automobiles & clothing's etc.

2. Companies rapidly & easily form alliances to produce new products

3. Small & mid sized companies can efficiently bid on projects required
by other companies

4. Software system broker connects users who need temporary access

to sophisticated manufacturing tools

5. Manufactures & suppliers use intelligent procurement systems to

facilitate & speed parts procurement , billing, payment transactions
etc.
• Agile manufacturing enterprise seeks to achieve;

1. Greater product customization

2. Rapid introduction of new or modified products

3. Interactive customer relationships

4. Dynamic reconfiguration of production processes.

Making a Business Case for a Document Library
• In current business world documents play a vital role which deals
with how businesses can better meet their customers need by
improving document management support

• Organizations create and archive millions of memos, contracts,

engineering drawings and other documents

• In an organization documents consume 20-45 percentage of

company’s labor costs and as much as 12-15 percent of revenues.

• All the documents now become increasingly digital, the problem of

managing documents becomes very important.
• The digital documents is a container that melds information- that is
multimedia content- with the context and appearance necessary for
effective communication.

• The digital documents is the means by which a organization’s

members interact with one another and with customers.

• Document management broadly refers to the ability to automate and

streamline document based processes-
1. From authoring to approval,
2. Distribution to viewing,
3. Searching and retrieval and
4. Finally storage
• Document management describes a wide variety of disparate
functions including;
1. Document authoring and scanning,
2. Repository archiving,
3. Document distribution and delivery,
4. Document processing along the work flow,
5. Information search and retrieval and
6. Document browsing and viewing
Digital document management: Issues and concerns
• Document management schemes:

1. Ad hoc documents- such as letter, financial reports, manuals. The

content, context and appearance of ad hoc documents are generally
not well defined and vary widely.

2. Process-specific documents- includes invoices or purchase orders.

Are often form based and appearance undergo virtually no
alteration and content varies only slightly according to well-
articulated rules.

3. Knowledge-oriented documents- encompass technical

documentation, catalogs of product information and design
documents.
 Types of digital documents
• The emerging spectrum of documents types, shown in figure below
range from inflexible (imaging formats) to the most flexible or
customizable (virtual documents).
• In the first part of the document types, content is treated as a
monolithic whole.

• Second part deals with the structure of documents.

• In the third part, content is not assumed to be in one place but

distributed on the network.

• Finally, as the documents become more flexible they need to become

smarter.
1. Document Imaging
• It emulates a microfiche and microfilm.

• An imaging system passes a paper document through a scanner that

renders it digital an then stores the digital data as a bit-mapped
image of the document

• Keywords for each document that help in indexing and retrieval are
entered during scanning.

• The problem with the imaging approach is that the output contains
only images not encoded text.

• The used imaging formats are:- TIFF(tag image file format) and ITU-
TSS (/International Telecommunication Union-telecommunication
standardization sector)
2. Structured documents
• A significant breakthrough in document management occurred when
people realized that the document structure provides a clear
description of document content.

• Document structuring allow to manipulate document content like

fields within database tables.

• To understand consider example of table of contents (TOC);

think TOC as a database schema that provides the overview
structure for a book, namely chapters and sections. A TOC can also
define abstracts, subsections, captions, bulleted or numbered lists,
copyright notices, bibliography and other document elements easily
and reuse them in other contexts. It allow a user to navigate through
an entire document or to narrow the search to specific parts or
elements, which greatly improves query precision and recall.
• Capabilities of structured documents;

1. Document formatting and rendering suits different information

delivery vehicles or media.
Eg: CD’s by companies to distribute manuals

2. The ability to create easily modifiable structures allows more

dynamic documents and user interaction and manipulation such as
the ability to create bookmarks, highlight text and write notes.

3. Given the right structure and interface, electronic documents, can

be easier to search and query than its hardcopy counterpart or
image counter part.
• Some standards;

1. SGML (standard generalized markup language) – an ISO standard

for interchange and formatting description of text documents in
terms of their logical structure.

2. ODA (office document architecture)- and ANSI and ISO standard for
interchange of compound office documents.

3. CDA (compound document architecture)- describes a set of ground

rules- content and formats and services for interchange of
compound documents between applications.

4. RTF (rich text format) – initially developed by Microsoft for

interchange of text between desktop products, later become widely
used by other text-processing applications.
3. Hypertext documents

• It’s the way of making document-based information more mobile.

• Mobility of information is necessary for the following reasons;

1. Information in enterprises is not located at one node or server but

distributes throughout organization

2. Accessing and retrieving large monolithic information is time

consuming.

3. Reuse of document fragments for composing new document is more

effective when information stored on individual systems and servers
across enterprise can be accessed from remote locations
• Relationships between documents can be represented through
hypermedia links that allow the production of complex, richly
connected and cross-referenced bodies of knowledge.
4. Active Documents

• They represent document-oriented computing.

• Provide an interactive interface where al documents, applications and

data related to a particular tasks are assembled, arranged and
interlinked.

• It is done in such a way that the user can focus on the task at hand
and be shielded from nontask-related issues like access, storage, data
formats, locations, computing or delivery mechanism.

• Active documents are powerful because they combine the concept of

composition of information with the distributed nature of
information.
• Active documents allows users to create interfaces that are
dynamically updated from remote data and computation object
objects that may be stored in the document libraries on the network.
 Corporate data warehouses
• Companies are focusing on developing data warehouses to force
existing businesses and generate new growth opportunities

• Today virtually every transactions and business details in the

corporate environment is recorded in databases in the hope that it
will enable more effective decision making throughout the
organization.

• Take an example of a finical s/m;

 In many companies financial consolidation is done manually with sales information
from each outlet keyed into individual computer s/m every night.
 Then send information to corporate office- where posted to a corporate mainframe
which don't have the capability to conduct analysis.
 Then done analysis by a second s/m by downloading the data, thus proving the
process to be labor intensive and slow.
• So, Clearly there is a need of central data warehouses that is
populated with data automatically and provides effective retrieval
and use of information.

• The organizations buying into data warehousing for decision support

exhibit the following characteristics;
1. An information-based approach to decision making

2. Involvement in highly competitive, rapidly changing markets with a

large, diverse customer base for a variety of products

3. Data stored in many systems and represented differently

4. Data stored in complex, technical, difficult-to-decipher formats,

making conversion for analysis difficult.
• Data warehouses are necessary as enterprise data increases in both
volume and complexity, making it important to establish an
information system that transforms scattered legacy data into useful
information.

• The data warehouses performs following functions;

1. Allows existing transaction and legacy systems to continue in

operation
2. Consolidates data from the various transaction systems into a
coherent set.
3. Allows analysis of vital information about current operations for
decision support.
• Once data are store in the warehouse companies can slice it several
different ways, performing detailed, multidimensional what-if
scenario in various aspects.
 Types of data warehouses
• The term data warehouses is currently being used to describe a number of
different facilities each with diverse characteristics.

• Some companies use all of the following components of data warehousing

in combination, others just one:

1. Physical data warehouses- In this collect data to a physical database, and

processing logic using organize, package and preprocess data for end user
access.
2. Logical data warehouses- contains metadata, business rules and
processing logic required to scrub, organize, package and preprocess the
data.
3. Data library- subset of enterprise data warehouse. It performs the role of a
departmental, regional or functional data warehouses.
4. Decision support systems- these are not data warehouses, but just
applications that make use of the data warehouses.
 Building an End-to-End Data Warehouses
• Decision support requires processing, summarizing and aggregate
large databases, including legacy and operational data.

• Hence, building a data warehouse architecture is the first step many

companies are taking

• It involves separate database designed explicitly for data-intensive,

decision support systems.

• In effect the transaction systems environment is clean up and shrunk.

• Three elements are crucial for having a complete data warehouse
that will truly optimize business analysis;

1. Back end:- accessing and organizing data easily from disparate

sources.

2. Preparing data for analysis- querying , searching and governing the

data

3. Front end- providing means for effective analysis of the information

 Assignment 2
Submit on -13/4/2015

1. EDI standardization
2. EDI software implementation
3. EDI envelope for message transport
4. Value added networks (VANs)