When you own a small business you know that your daily job is to work on attaining the highest levels of efficiency and effectiveness at your company. You must compete with yourself, the companies in your current marketplace, and because of the internet, with competition around the world and often that you will never physically see.
With this business reality, companies have to be proactive and address problems before they become insurmountable challenges. This mean implementing strategies and tools that can both anticipate potential issues and put dealing with these issues within the capabilities of the business. Companies today can meet these challenges by invest in business software tools that can be of great assistance to any size business seeking to build a stronger business with a firmer foundation. One great example of a software that can perform this task is Electronic Data Exchange or EDI software.
Small businesses today have at the heart of their businesses a need to have high quality communication between themselves, vendors and customers. The quality of this communication will often determine the speed and efficiency of a transaction and if things get bogged down by low quality communication it will certainly impact a company’s bottom line. EDI sits at the heart of a company’s exchange of business forms and important documents. The process requires that both companies utilize a connected machine-based communications and archiving software system that will generally be housed in a desktop computer.
The typical types of documents exchanged between companies are: status reports, bills of lading, purchase orders, invoices and shipping documents. EDI companies today is a core component of business operations in many industries including home and automobile purchasing, healthcare, shipping and e-commerce.
The EDI process is that important documentation is transferred between two company’s computers that each have ED software installed. The data is converted to specific code that can be moved quicker and more accurately over the internet and then converted back to readable text on the receiving end. This encoding and decoding also offers a high degree of safety for the information send because only the received party can decode the information sent. There are two common forms of translation for Electronic Data Interchange, a machine to readable format that creates a printed report, and the automatic translation of Electronic Data Interchange into Enterprise Resource Planning (ERP) software or an accounting system. Dedicated hardware also adds an additional level of safety for the document sent.
EDI has often been used to replace much of the paper associated with doing business transactions and this is certainly a benefit when employing an EDI system, but its real benefit is to that it reduces or eliminates the error rates associated with manual data input. This human error costs businesses billions of dollars each year and can lead to lost business and opportunities. These processes get automated through EDI and become more effective in improving efficiency at a company. EDI is critical for companies seeking to implement “just in time” strategies in their production and shipping strategies. EDI is proven to be effective and can be implemented by any size company with great results.
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