EDI is quite different from sending electronic mail messages or sharing files through a network, a modem, or a bulletin board. The straight transfer of computer files requires that the computer applications of both the sender and receiver (referred to as "trading partners") agree upon the format of the document. The sender must use an application that creates a file format identical to your computer application.

When you use EDI, it's not necessary for you and your trading partner to have identical document processing systems. When your trading partner sends a document, the EDI translation software converts the proprietary format into an agreed upon standard. When you receive the document, your EDI translation software automatically changes the standard format into the proprietary format of your document processing software.

COST SAVINGS
EDI is a tremendous cost- and time-saving system. Since the transfer of information from computer to computer is automatic, there is no need to re-key information. With no data entry, the chance for error drops to near zero.

RJR Nabisco estimates that processing a paper purchase order costs the company $70. Processing an EDI purchase order reduces the cost to a mere 93 cents!  Here are some more money-savings statistics:

“Doing business with EDI can significantly reduce your operating costs. For example, a paper document processed through the traditional business model costs approximately $5.00 per page. Processing the document through EDI can reduce the cost to 13 cents.”
-Business First, April 1, 1996

REQUIREMENTS
Our business systems (i.e. Dimension21®, IntelliOrder®) have everything but the modem included. We provide a special VAN called the CDR to make your EDI communications as easy as possible.

• EDI translation management software - for optimum performance the translation software should be on the same platform as your business application.
• Mapper - levels of mapper implementation or integration vary greatly from translator to translator.
• Communications software - can be a module to the translator, a programming tool that enables you to write communications protocols, or a separate application.
• Modem - the higher the baud rate, the faster the communications will be.
• VAN - a network that you connect to. One network can act as a gateway to another. (Some trading partners offer a direct connection to their EDI computer.)

PRICES
Prices vary from free (for very simple one-function products) to several thousands of dollars for full-function applications. The final price you pay also depends upon the expected volume of electronic documents. Generally speaking, PC products cost less, but handle only a few documents and trading partners. Midrange EDI packages can be a little more expensive, but handle a much larger volume of EDI. If you anticipate multiple documents or trading partners, a midrange EDI system is a much better choice. You may pay more for a program with an integrated mapper, but you'll avoid purchasing overlays and maps in the future.

As part of EDI service cost you can expect the following ongoing charges:

• Maintenance fees. Most companies charge an annual maintenance fee usually a percentage of the translator's list price. This fee should include software updates, standards updates, technical support, and customer service.
• VAN charges. The VANs bill you for transmitting data, similar to making a long distance phone call. Some also bill you for connect time. A fast modem helps to lower transmission costs.
• Mailbox costs. Most VANs charge a monthly fee for maintaining a mailbox on their network. Some base billing on the document (25 cents per document transmitted); others charge based upon the number of characters in each document.

IMPLEMENTATION
Some applications are easier to learn and use than others. The more time you spend in training, the more time it takes to get into production mode. If your time frame is tight, look for a translator that doesn't require training before implementation.