Electronic Data Interchange (EDI) is the process of exchanging information electronically. At its heart, it is simply a business transaction conducted in an electronic manner. It is typically used in the transfer of data between businesses that would otherwise take place via paper documents. A simple example of EDI would be the transmission of a computer file from one business to another containing all of the information necessary for placing an order for goods and services to be purchased. Another example would be the transmission of a file containing invoice information or another containing receipts for shipments.
When humans communicate, they use a series of audible rules to shape sounds that are understood by the person to whom they wish to speak. The person who is listening would be unable to receive any useful information from the communication if they didn’t speak the same language as the person who was speaking. It works the same way with EDI. EDI works because both the sending business and the receiving business follow a set of rules that they both understand and agree upon in advance. There are many sets of these rules for EDI which are referred to as “standards.” Just like computer technology in general, EDI has evolved over a period of many years and over several continents. As a result, there are many different standards that have been developed. These standards have been shaped not only by geography but also by the nature of the businesses who developed and use them.
The first step in diving deeper into EDI involves understanding the organizations that have developed standards for EDI and then understanding the standards which they have developed. The standards that are not widely used or that are being phased out will not be discussed here. Finally, some conclusions will be made regarding the current state of EDI and how it can best be adopted today.
ANSI ASC X12
In the United States, the American National Standards Institute (ANSI) is the oldest and largest organization that has developed standards for a broad range of areas including EDI. ANSI was formed in 1918 and is based in Washington, D.C. In 1979 ANSI formed a committee called the Accredited Standards Committee (ASC) to develop a set of standards for EDI. These standards are called “ANSI ASC X12” standards and are used by over 300,000 companies worldwide for daily business transactions including the most basic types like product ordering and invoicing, but also more complex transactions for multiple industries such as mortgage settlements, residential loan applications, and even student loan claims or student enrollment verification. Even though the ANSI EDI standards were developed by an American organization, they have been adopted to some degree internationally. More information about ANSI ASC X12 is available at: http://www.x12.org/about/faqs.cfm.
A central purpose of the United Nations (UN), beyond attempting to establish international peace, is to foster cooperation in solving international economic problems. Towards that goal, the UN has developed standards for EDI called the United Nations/Electronic Data Interchange for Administration, Commerce, and Transport (UN/EDIFACT) standards. Further development of the EDIFACT standards in Europe have been developed by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). The EDIFACT standards are widely used in Europe and cover a variety of industry applications. UN/EDIFACT is a set of standards. UN/CEFACT is a European organization charged with developing standards including UN/EDIFACT. Portions of the ANSI ACT X12 standards have been incorporated into the UN/EDIFACT standards.
GS1 EANCOM, GS1 UN/CEFACT XML, GS1 XML
Global Standards 1 (GS1) is a not for profit international organization that develops standards for multiple industries mostly related to supply chain operations. GS1 has member organizations in 110 countries and over a million member companies. GS1 is best known for their issuance of barcode numbers for products. The Universal Product Code (UPC) barcode was the first barcode standard developed by GS1 and is widely used today. An interesting fact is that the first product to be encoded with a UPC barcode was Wrigley’s brand chewing gum! GS1 is far more important than a pack of chewing gum these days since their standards for global commerce quite literally form a universal language that, if embraced, would allow all companies worldwide to interact electronically. The global office for GS1 is located in Brussels, Belgium and there are offices in a hundred countries including one in Lawrenceville, New Jersey. GS1 partners with other organizations including ISO, UN/CEFACT, and ITU-T (discussed below). GS1 has three sets of EDI standards all of which complement each other. Some are based on subsets of other international EDI standards. The standards are GS1 EANCOM, GS1 XML, and GS1 UN/CEFACT XML. The GS1 EANCOM subset of the UN/EDIFACT standards is the most widely used subset of UN/EDIFACT. GS1 has gone a long way towards making it easier (if that is possible) to implement the ultra-comprehensive UN/EDIFACT standards. As well the GS1 UN/CEFACT XML standard has somewhat simplified a subset of the UN/CEFACT XML standard. The GS1 XML standards are yet another set of standards that have been issued by GS1 in order to address different user groups that don’t fit into the more traditional EANCOM EDI model. GS1 XML is being used in parallel with the other standards and is in fact fully compliant with UN/CEFACT methodology and by inference the UN/EDIFACT standard.
RosettaNet is a non-profit organization that establishes standards for business to business information (B2B) exchange. RosettaNet is a subsidiary of the United States chapter of GS1 and used to be called the Uniform Code Council, Inc. (UCC). RosettaNet began in the United States but now has over 500 members from all over the world. There are several local user groups including one in Europe that is known as EDIFICE. The RosettaNet standard is based on XML and is widely applicable to nearly all aspects of business processes and business to business communications. It is used widely today within the semiconductor industry as well as for electrical and electronic components as well as consumer electronics. Use of RosettaNet in the growing high tech sector in Asia is expanding but on a slower basis in Europe due to the already widespread adoption of EDIFACT. The RosettaNet Automated Enablement standard (RAE) is based on the Office Open XML document standard. The development of the Office Open XML standard was co-sponsored by Microsoft starting in November 2005 in conjunction with ECMA. ECMA whose full name is European Computer Manufacturers Association International is a private membership-based standards organization formed in 1961 for information and communication systems. Since ECMA expanded worldwide the full name which includes “Europe” is no longer used. Office Open XML is used by Microsoft Office and although Open Office/Star Office/Libre Office can open and save documents in the Office Open XML format, the native format they use is called “Open Document for Office Applications (ODF).” Further confusion is added due to the fact that prior to Office 2007, Microsoft used another standard they called “Microsoft Office XML.” RosettaNet has a huge advantage over other EDI technologies because of Microsoft’s use and support for the Office Open XML standard. RosettaNet provides a very useful and attractive method for implementing EDI since the documents being transferred can be opened and modified in the most common office suite in the planet.
The most well-known international standards body is the International Standards Organization (ISO). ISO was formed in 1947 and is based in Geneva, Switzerland and is composed of members from 164 member countries. The standards produced by ISO include standards related to computer technology but also cover other areas such as product manufacturing. ISO standards are referred by their number usually with “ISO” in front. Some of the most well-known computer related standards that have been issued by ISO are the standards for PDF documents. The ISO 32000-1 standard was the first of several standards that were released to address the worldwide uniformity of PDF documents. Much more information is available about ISO at their web site: http://www.iso.org/. The ISO standards related to EDI have been picked up from the EDIFACT standards and then published. This does not preclude ISO from expanding or redeveloping their EDI standards in the future for such an important standard of international business.
The International Telecommunication Union (ITU) Telecommunication Standardization Sector (ITU-T) is a division of the ITU that is responsible for the development of standards for telecommunications. ITU-T used to be called CCITT (from the French Comité Consultatif International Téléphonique et Télégraphique) up until 1993. ITU-T is an agency of the United Nations (UN) and is based in Geneva, Switzerland. The parent ITU organization is the oldest intergovernmental organization in the world having been formed in 1865. X.400 is a set of ITU-T standards that define electronic message handling – normally called e-mail. X.400 provides a platform for the transmission of EDI messages between trading partners. The specific standards related to the EDI content are called ITU-T Rec F.435 and ITU-T Rec. X.435 (often just called P35). X.400 has failed to surpass the more common Simple Mail Transfer Protocol (SMTP) in the United States but has gained widespread adoption internationally.
Odette International Ltd. Is a nonprofit organization based in London that develops standards for EDI as well as logistics. Odette stands for “Organization for Data Exchange by Tele Transmission in Europe” but the full name is no longer used. Odette is associated with the European automobile industry and is known for having standardized the tags that are used for good deliveries in that industry. Each member company is assigned an Odette organization code which is then used within EDI communications. Odette has been largely superseded by EDIFACT. It should be noted that Odette has been used by many parts of the European automobile industry but not for EDI messages related to drawings (CAD CAM) which instead use a separate Strategic Automotive Product Standards Industry Group (SASIG).
The Health Insurance Portability and Accountability Act (HIPAA) is legislation that was enacted in the United States in 1996. HIPAA provides for the establishment of American standards for electronic healthcare transactions. It also provides a method to identify the healthcare providers, insurers, and employers. HIPAA EDI transactions support many different document types and are based on the ANSI ASC X12 EDI standards.
The Society of Worldwide Interbank Financial Telecommunication (SWIFT) has its headquarters in Brussels, Belgium and was formed in 1973 with the goal of standardizing electronic financial transactions. The SWIFT standards are transacted across an electronic member-based network called SWIFTNet. Several encoding methods are used for the transactions in order to secure them. SWIFTNet is used worldwide by thousands of financial institutions. SWIFT can be thought of as “EDI for banks.”
Verband der Automobilindustrie (VDA) is a German organization that develops standards for the German automobile industry. It is also called The German Association of the Automobile Industry. VDA has jokingly been referred to as “EDI with a German accent” but it was around way before the UN EDIFACT standards which are widely adopted in Europe. Although EDI standards are part of the standards that have been established by VDA, there are also many other important standards including the German Quality Measurement System (QMS) for automobiles. The VDA also hosts the world’s largest auto show in Frankfurt, Germany annually.
Zentraler User Guide des Forums elektronische Rechnung Deutschland (ZUGFeRD) roughly translates to English as “Central User Guide of the Electronic Invoice Forum in Germany.” The Germans have developed a simple way of implementing EDI for invoices. The ZUGFeRD invoice combines a viewable PDF/A invoice that looks like any ordinary invoice but also contains computer digestible XML embedded within it in a standardized format. This makes it possible to more easily implement EDI for invoices even in small and mid-sized companies. Unfortunately, the ZUGFeRD invoice has not yet been widely adopted outside of Europe and the standard only pertains to invoices and not to other business documents. The details on this standard for invoices are available in German at: http://www.ferd-net.de/front_content.php?idcat=255. ZUGFeRD implements a subset of the core cross industry invoice as defined by UN/CEFACT. The ZUGFeRD invoice supports three different subsets of the cross industry invoices which are named as “profiles” - Basic, Comfort, and Extended. Basic carries only the data for a basic invoice with other data fields being included as free text outside of any schema or additional rules. Comfort expands the definition to include enough structured data so that an invoice could be processed in an automated fashion. The Extended invoice profile adds even more structured data and is helpful for invoices which span different types of businesses. Any implementation of ZUGFeRD for purposes of EDI should be based at a minimum on the Comfort profile. The structured invoice information is embedded in the PDF/A invoice by using the rules specified for PDF/A-3 attachments (also called associated files). ZUGFeRD is an example of a use of a subset of a much more complex international EDI standard (UN/EDIFACT). ZUGFeRD would be a lot more useful if it also addressed other types of documents and information exchanges. Its benefit is that the data exchanged is viewable as an ordinary invoice but underneath contains the complexity required for automated invoice processing.
There are numerous competing EDI standards. Within the United States, the ANSI ASC X12 standard is the most widely used. UN/EDIFACT is predominant in Europe. Specialty EDI standards are used for certain types of businesses such as healthcare and automotive, including HL7 and VDA. Others are very specific in terms of industry application such as SWIFT. Subsets of the various international EDI standards often end up being the standards that are actually implemented in industry due to the all-inclusive and complex nature of the whole standards. GS1 as well as the American arm (RosettaNet) has created subsets of EDI standards and are helping to increase the adoption of EDI. ISO standards have been published based on the other worldwide EDI standards. The German ZUGFeRD standard is a simple PDF-based standard that only addresses invoices. Because of it being limited to only invoices, ZUGFeRd is less attractive. The American ANSI ASC X12 standards are attractive but have been at least partially incorporated into the larger set of UN/EDIFACT standards. RosettaNet provides a method for implementing the GS1 EDI standards which are based on other international standards including UN/EDIFACT. The RosettaNet Automated Enablement standard implements the use of Office Open XML for the EDI messages. The full set of RosettaNet standards can incorporate a wide range of document types and information flows just like other EDI technologies. But the addition of the enablement standard helps to provide a practical method for implementing the EDI standards that will be used for the transactions. There are of course industries such as healthcare and finance whose data doesn’t fit into the RosettaNet, ANSI ASC X12, or UN/EDIFACT models. But those models could still be used for many of the business operations in these industries since any company also purchases common goods and services.