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Internet Based EDI

When considered as a channel for EDI, the Internet appears to be the most feasible alternative for putting online B2B trading within reach of virtually any organization, large or small. 

Internet-based EDI is generally used to describe EDI systems that can be accessed and used via a Web browser. These systems are based on what is known as the "Software as a Service" principle where the user will pay a monthly fee in exchange for access to the Internet-based EDI system. 

Internet-based EDI began to increase in popularity. It is easy to use, easy to adopt EDI system that was affordable.  

Reasons of Using Internet-Based EDI
There are several reasons for firms to create EDI ability over the Internet: 
1) Accessibility: The Internet is a publicly accessible network with few geographical constraints. Its largest attribute, large-scale connectivity (without the need for any special company networking architecture), is a seedbed for growth of a vast range of business applications.
 
2) Global Reach: The global nature of the Internet offers the potential to reach the widest possible number of trading partners of any viable alternative currently available.
 
3) Low Cost: Using the Internet can cut communication costs by over 50 to 70 percent lower than that of VANS.
 
4)Use of Web Technology: Using the Internet to exchange EDI transactions is çonsistent with the growing interest of business in delivering an ever- increasing variety of products and services electronically, particularly through the Web. Internet-based EDI can complement or replace many current EDI applications.
 
5) Ease of Use: Internet tools such as browsers and search engines are very user friendly, and most users today know how to use them.
 
6) Added Functionalities: Internet-based EDI has several functionalities not provided by traditional EDI, which include collaboration, workflow, and search engines.

Types of Internet-Based EDI 
The Internet can support EDI in a variety of ways:  
1) Internet e-mail can be used to transport EDI messages in place of a VAN. To this end, standards for encapsulating the messages within Secure Internet Mail Extension (S/MIME) were established.
 
2) A company can create an extranet that enables its trading partners to enter information in a Web form whose fields correspond to the fields in an EDI message or document.
 
3) Companies can utilize the services of a Web-based EDI hosting service in much the same way that companies rely on third parties to host their commerce sites. Netscape Enterprise is an example of the type of Web-based EDI software that enables a company to provide its own EDI services over • the Internet. For example, Harbinger Express is company that provides third- party hosting services.
 
Prospects of Internet-Based EDI 
Companies that used traditional EDI have responded positively to Internet-based EDI. Internet simply serves as an alternative transport mechanism to a more expensive lease line. The combination of the Web, XML, and Java makes EDI worthwhile even for small, infrequent transactions. Whereas EDI is not interactive, the Web and Java were designed specifically for interactivity as well ease of use. 

Example of Internet-Based EDI 
1) Compucom Systems was averaging 5,000 transactions per month with traditional EDI; within a short time after the transition to Internet-based EDI, the company was averaging 35,000 transactions per month. The system helped the company to grow rapidly.

2) Tradelink of Hong Kong was successful in recruiting only several hundred of the potential 70,000 companies that used the traditional EDI system to communicate transactions. In 2001, the Internet-based system had thousands of companies registered and hundreds were being added monthly. with government agencies regarding export/import
 
3) Atkins Carlyle Corp., which buys from 6,000 suppliers and has 12,000 customers in Australia, is a wholesaler of industrial, electrical, and automotive parts. The large suppliers were using three different EDI platforms. By moving to an Internet-based EDI called Intercommerce, the company is able to conduct collaboration with many more business partners, reducing the transaction cost by about Rs80 per message.  

4) Procter & Gamble (PG) replaced a traditional EDI system with 4,000 business partners to an Internet-based system with tens of thousands of suppliers.
 
Many companies no longer refer to their collaborative systems as EDI, and the term may even disappear. However the properties of EDI are embedded in new e- commerce initiatives such as collaborative commerce and electronic exchanges.

Factors of Internet-Based EDI 
Several factors make the internet useful for EDI: 
1) Flat-Pricing: Flat-pricing that is not dependent on the amount of information transferred. The internet flat-rate model is better for the customer as opposed to the standard VAN approach of charges per character.
 
2) Cheap Access: Cheap access with the low cost of connection - often a flat monthly fee for leased line or dial-up access. Business users have access to commercial and non-commercial internet services in some 140 countries providing ubiquitous network coverage.
 
3) Common Mail Standards: Common mail standards and proven networking and interoperable systems; another attraction is that internet mail standards are non-proprietary and handle congestion and message routing exceptionally well. It has been noted that sometimes on a VAN network an e-mail message can take hours or days to reach its destination, while on the internet it usually takes seconds to minutes.
 
4) Security: Public-key encryption techniques are being incorporated in various electronic mail systems. This will enable systems to ensure the privacy of EDI messages and give users a way to verify the sender or recipient.

Comparison Between Traditional versus Internet-Based EDI 

Table 2.3: Comparison between EDI and the Internet-Based EDI
 Traditional EDIInternet-Based EDI 
 Proprietary, dedicated network Open network 
 Highly structured, machine-readable dataE-mail, video, voice, image 
 High cost Low cost
 More secure Less secure
 Must be very high transaction volume. Large or small transaction volume.
 High possibility of clerical error during data processing. Clerical error could significantly be reduced.
 Delivery time is 12 to 24 hours. Minutes in the Internet.
 High data security. Relatively low data security. The internet is perceived as an unsafe medium for sensitive information; however, this area is under intensive research and developments.
 High-there is responsibility over EDI reliability by EDI developers. Relatively low, a serious vulnerability of the internet is its lack of organisation; no one owns it and no one responsible for its reliability.
 Requires high and specific skill.User-friendly. 


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