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Electronic Data Interchange and Its Advantages

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    Electronic Data Interchange (EDI)

    Electronic Data Interchange (EDI) is growing in popularity with businesses worldwide. With EDI, you can automate processes, minimize errors, decrease response times, reduce costs and more!

    This is a summary about EDI so you can see how your company can benefit from it.

    What is Electronic Data Interchange (EDI)?

    Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents–such as purchase orders, delivery receipts and invoices, in a standard electronic format between business partners. Exchanging documents electronically increases the speed and visibility of the transaction and eliminates the need for faxes and mailing paper documents.

    What Are the Advantages to EDI?

    According to a market report by Dart Consulting, the estimated market size of EDI is projected to reach as high as $2.1 billion by 2020. Some advantages that might explain the sales growth of EDI software are:

    • Minimized Errors – EDI software reduces document errors as much as 30 to 40%* by automating the purchase order process and decreasing the chance for human error.
    • Decreased Response Times – Response times can be cut by 61%* by automating paper-based tasks.
    • Cost Savings – Costs associated with purchasing and stocking paper as well as printing, storing and filing are minimized with EDI.
    • Automated Processes – EDI reduces the time required to process and distribute documents and virtually eliminates the need for mail, fax and email.

    * Source: EDI Basics

    Purchase Orders: Traditional Document Exchange Versus EDI

    Purchase Order Process with Traditional Document Exchange

    The average time to process a purchase order is approximately three to five days, and requires the buyer to mail the purchase order to the supplier and wait for the supplier to receive it and enter it into their system.

    Purchase Orders with EDI

    The EDI purchase order process typically takes less than an hour, and sometimes just minutes! With EDI software, the buyer creates the purchase order and automatically transmits it to the supplier where it is entered immediately into the supplier’s order entry system.

    The SEAL Systems Extension Automates and Simplifies the Purchase Order Process

    The SAP standard is to only send suppliers the purchase order or query. However, SEAL System’s extension makes it possible to automatically send additional documents with purchase orders. You can compile all relevant documents and SAP forms, and automatically add stamps, watermarks and barcodes to your purchase order. This means you no longer need to waste time searching for all the relevant documents that you need to include with a purchase order.

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    Learn More

    SEAL Systems explains how to send purchase orders and additional documents from SAP
    Read our Factsheet “Purchase Orders”