E-MARKETING

UNIT-IV

E-Marketing: Business to Business (B2B), Business to customer (B2C) ecommerce; Online Sales force, On line Service and Support; EDI: Functions & components.

E-Marketing
What is E-Marketing?

E-marketing refers to the use of the Internet and digital media capabilities to help sell your products or services. These digital technologies are a valuable addition to traditional marketing approaches regardless of the size and type of your business. E-marketing is also referred to as Internet marketing (i-marketing), online marketing or web-marketing.

As with conventional marketing, e-marketing is creating a strategy that helps businesses deliver the right messages and product/services to the right audience. It consists of all activities and processes with the purpose of finding, attracting, winning and retaining customers. What has changed is its wider scope and options compared to conventional marketing methods.

E-marketing is deemed to be broad in scope, because it not only refers to marketing and promotions over the Internet, but also includes marketing done via e-mail and wireless media. E-marketing also embraces the management of digital customer data and electronic customer relationship management (ECRM) and several other business management functions.

E-marketing joins creative and technical aspects of the Internet, including: design, development, advertising and sales. It includes the use of a website in combination with online promotional techniques such as search engine marketing (SEM), social medial marketing, interactive online ads, online directories, e-mail marketing, affiliate marketing, viral marketing and so on.

The digital technologies used as delivery and communication mediums within the scope of e-marketing include:

Internet media such as websites and e-mail

Digital media such as wireless, mobile, cable and satellite.

Types of e-marketing

1. Article marketing

2. Affiliate marketing

3. Video marketing

4. Email marketing

5. Blogging

6. Content marketing

Article marketing

Article Marketing is a form of marketing in which articles are strategically placed on the Internet to promote a specific website. The idea is to generate interest in your site, build trust as an expert in your niche, and create backlinks to your site that will improve its search engine rankings.

Affiliate marketing

Affiliate marketing is the process of making money online every time a customer purchases a product based on your recommendation. This is an online sales tactic that allows you – 'the affiliate' – to earn a commission and helps the product owner increase sales

Video marketing

An image is worth a thousand words. For a video, multiply that by another thousand. That is the basis of video marketing, a powerful form of marketing that effectively engages your audience as a part of your marketing campaigns.

Video marketing means using videos for promoting and telling people about your product or service. It helps increase engagement on your digital and social channels, educates your audience, and allows you to reach them with a new medium.

 

Email marketing

Email marketing is a powerful marketing channel, a form of direct marketing as well as digital marketing, that uses email to promote your business’s products or services. It can help make your customers aware of your latest items or offers by integrating it into your marketing automation efforts. It can also play a pivotal role in your marketing strategy with lead generation, brand awareness, building relationships or keeping customers engaged between purchases through different types of marketing emails.

Blogging

Blog marketing is the process of reaching your home business' target market through the use of a blog. Initially, business owners had a blog separate from their websites, but today, you can easily integrate the two to make it easier for you to manage, as well as easier for visitors to access. Many business owners use a blogging platform, such as WordPress, for both their website and blog.

Further, as blogging has grown in ease and popularity, many people have created businesses from blogging all on its own, as opposed to having a business first and then blogging. For example, some food blogs are businesses in and of themselves.

Content Marketing

Content Marketing is a strategic approach to marketing a business or brand by creating and publishing and communicating valuable and relevant content to attract and retain a defined target segment. Content marketing is an ongoing process integrated into the long term marketing strategy which includes educational articles, e-books, videos, newsletters, entertainment, webinars, podcasts etc. The content is not about the products o the services the company sells but the high quality and relevant information and experience the customers get.

24/7 Marketing

Internet marketing reduces cost and runs around the clock. That means that your marketing campaigns run for 24 hours a day, 7 days a week. Compared to traditional marketing, internet marketing does not have any limitations in terms of opening or closing hours. At the same time, you would not have to worry about overtime pay for your staff.

All these and other methods help a company or brand in e-marketing and reaching customer through the internet.

Global Marketing

The ability to market your products and services across countries is one of the biggest advantages of global marketing for business. Within several months of following aggressive SEO (Search engine optimization (SEO) is the process of increasing the quality and quantity of website traffic by increasing the visibility of a website or a web page to users of a web search engine) techniques, you can expect a huge number of hits your website, secure millions of viewers and reach audiences from across the world.

Advantages of E-marketing

1. Much better return on investment from than that of traditional marketing as it helps increasing sales revenue.

2. E-marketing means reduced marketing campaign cost as the marketing is done through the internet

3.  Fast result of the campaign as it helps to target the right customers.

4.  Easy monitoring through the web tracking capabilities help makes e-marketing highly efficient

5. Using e-marketing, viral content can be made, which helps in viral marketing.

6. Extremely low risk.

7. Reduction in costs through automation and use of electronic media.

8. Faster response to both marketers and the end user.

9. Increased ability to measure and collect data.

10. Opens the possibility to a market of one through personalization.

11. Increased interactivity.

12. Convenience and Quick Service

The incredible convenience of marketing online is one of the biggest advantages of internet marketing. The internet has extremely easy accessibility with consumers using the internet and reaching markets anywhere in the world. Because of this, purchasing goods from across borders now reduces the cost of transportation.

Low Cost for Operations and a Wider Reach

One of the significant advantages of online marketing for businesses is its low operating cost. You can advertise at a cheaper rate with internet marketing than with traditional methods of advertisement such as ads in newspapers, on television and on the radio. Plus, these advertisements have a wider reach, owing to the increased use of devices by most consumers..

Measure and Track Results

An aspect of internet marketing that is rarely available with traditional marketing is the ability to measure and track results. With online marketing, your business can utilize various tools, such as Google Analytics, Hoot suite, Doppler and Crazy Egg, for tracking results of your advertising campaigns. Using these tools, not only can you measure and track the effectiveness of your online marketing campaigns, but also illustrate its progress in detailed graphics.

Ability to Multitask

One of the core benefits of digital marketing is its ability to handle millions of customers at the same time. This is also the reason why it is important for you to optimize your website design to make it device-friendly. It must be built to ensure that is accessible through any device, be it a notebook, smart phone, or a laptop. As long as a website’s infrastructure is efficient, numerous transactions can take place seamlessly and simultaneously.

This means that even with a large number of transactions taking place, your website is capable of providing satisfactory service to every customer who makes a purchase online.

Business to Business (B2B)

What Is Business-to-Business (B2B)?

Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business refers to business that is conducted between companies, rather than between a company and individual consumer. Business-to-business stands in contrast to business-to-consumer (B2C) and business-to-government (B2G) transactions.

A website following the B2B business model sells its products to an intermediate buyer who then sells the products to the final customer. As an example, a wholesaler places an order from a company's website and after receiving the consignment, it sells the end product to the final customer who comes to buy the product at the wholesaler's retail outlet.

B2B identifies both the seller as well as the buyer as business entities. B2B covers a large number of applications, which enables business to form relationships with their distributors, re-sellers, suppliers, etc.

Important Points

Business-to-business (B2B) is a transaction or business conducted between one business and another, such as a wholesaler and retailer.

B2B transactions tend to happen in the supply chain, where one company will purchase raw materials from another to be used in the manufacturing process.

B2B transactions are also commonplace for auto industry companies, as well as property management, housekeeping, and industrial cleanup companies.

Meanwhile, business-to-consumer transactions (B2C) are those made between a company and individual consumers.

How Business to Business (B2B) works

Business-to-business transactions are common in a typical supply chain, as companies purchase components and products such as other raw materials for use in the manufacturing processes. Finished products can then be sold to individuals via business-to-consumer transactions.

In the context of communication, business-to-business refers to methods by which employees from different companies can connect with one another, such as through social media. This type of communication between the employees of two or more companies is called B2B communication.

Example of B2B

Samsung, for example, is one of Apple's largest suppliers in the production of the iPhone. Apple also holds B2B relationships with firms like Intel, Panasonic and semiconductor producer Micron Technology.

B2B transactions are also the backbone of the automobile industry. Many vehicle components are manufactured independently, and auto manufacturers purchase these parts to assemble automobiles. Tires, batteries, electronics, hoses and door locks, for example, are usually manufactured by various companies and sold directly to automobile manufacturers.

Service providers also engage in B2B transactions. Companies specializing in property management, housekeeping, and industrial cleanup, for example, often sell these services exclusively to other businesses, rather than individual consumers.

Some more examples

Electronics

Shipping and Warehousing

Motor Vehicles

Petrochemicals

Paper

Office products

Food

Agriculture

What Is Business-to-Consumer (B2C)?

The term business-to-consumer (B2C) refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.

B2C became immensely popular during the dotcom boom of the late 1990s when it was mainly used to refer to online retailers who sold products and services to consumers through the internet.

As a business model, business-to-consumer differs significantly from the business-to-business (B2B) model, which refers to commerce between two or more businesses.

Business to customer (B2C) ecommerce

In B2C model, a business website is a place where all the transactions take place directly between a business organization and a consumer.

In the B2C model, a consumer goes to the website, selects a catalog, orders the catalog, and an email is sent to the business organization. After receiving the order, goods are dispatched to the customer. Features of the B2C model −

Heavy advertising required to attract customers.

High investments in terms of hardware/software.

Support or good customer care service.

Consumer Shopping Procedure

Following are the steps used in B2C e-commerce − A consumer −determines the requirement.

searches available items on the website meeting the requirement.

Compares similar items for price, delivery date or any other terms.

Place an order.

Pay the bill.

Receives the delivered item and review/inspect them.

Consult the vendor to get after service support or returns the product if not satisfied with the delivered product.

Disintermediation and Re-intermediation

In traditional commerce, there are intermediating agents like wholesalers, distributors, and retailers between the manufacturer and the consumer. In B2C websites, a manufacturer can sell its products directly to potential consumers. This process of removal of business layers responsible for intermediary functions is called disintermediation.

Important points

Business-to-consumer refers to the process of businesses selling products and services directly to consumers, with no middle person.

B2C typically refers to online retailers who sell products and services to consumers through the internet.

Online B2C became a threat to traditional retailers, who profited from adding a markup to the price.

However, companies like Amazon, eBay, and Priceline have thrived, ultimately becoming industry disruptors.

How B2C works

Business-to-consumer (B2C) is among the most popular and widely known sales models. Michael Aldrich first utilized the idea of B2C in 1979, who used television as the primary medium to reach out to consumers.1

B2C traditionally referred to mall shopping, eating out at restaurants, pay-per-view movies, and infomercials. However, the rise of the internet created a whole new B2C business channel in the form of e-commerce or selling goods and services over the internet.

Online verses traditional

Traditionally, many manufacturers sold their products to retailers with physical locations. Retailers made profits on the markup they added to the price paid to the manufacturer. But that changed once the internet came. New businesses arose that promised to sell directly to the consumer, thus cutting out the middle person—the retailer—and lowering prices. During the bust of the dotcom boom in the 1990s, businesses fought to secure a web presence. Many retailers were forced to shut their doors and went out of business.

Online Sales force

What is Salesforce and What Does It Do in 2018?

Salesforce is an online solution for customer relationship management, or CRM. It gives all your departments — including marketing, sales, commerce, and service — a shared view of your customers with one integrated CRM platform.

Salesforce is a cloud computing service as a software (SaaS) company that specializes in customer relationship management (CRM). Salesforce's services allow businesses to use cloud technology (Cloud computing is the delivery of different services through the Internet.

These resources include tools and applications like

Data storage, servers, databases, networking, and software. ... As long as an electronic device has access to the web, it has access to the data and the software programs to run it.) to better connect with customers, partners and potential customers. The software has become the number one for customer success and helps businesses track customer activity, market to customers and many more services. 

Salesforce impressed investors recently by crushing third quarter estimates, reporting a third quarter revenue of $3.39 billion - up 26% for the year. 

The software company has become very popular in recent years. The Street's founder Jim Cramer even dubs the service as a 'Cloud King' and has been very bullish on the stock - seemingly with good reason.

Founded in 1999 by a former Oracle (ORCL - Get Report) executive Marc Benioff, Dave Moellenhoff, Frank Dominguez and Parker Harris, Salesforce is one of the first global companies to successfully employ a cloud-based CRM software. Sales force has been able to leverage cloud technology and build a variety of applications for businesses to better connect to their customers and help give them key insights into their services through analytics and apps.

While their applications are vast, according to Salesforce, their CRM primarily focuses on helping companies with customer retention, keeping their customers happy, seeking out and executive customer acquisition, giving companies insights into their customers and much more. 

So, how do companies actually use Sales force? 

What is Sales force Used For? 

As of 2017, Sales force reportedly had 150,000 companies using their software - among which include Amazon (AMZN - Get Report) , Adidas (ADDYY) , ADP (ADP - Get Report) , American Express  (AXP - Get Report) and many, many more. 

Companies use Salesforce to understand their customers, connect with them on a variety of levels and help grow their customer base. 

The cloud-based software allows companies to track (in real time) analytics, customer success and support, customer complaints and a variety of other CRM functions with the ease of cloud storage and access wherever the users are. 

According to the Salesforce website, companies that use the software see average increases in a variety of areas, including an average 27% increase in sales revenues, 32% increase in lead conversion, 34% increase in customer satisfaction and a 56% faster deployment. 

Because of its diverse selection of clouds and applications, Salesforce is also used by companies to assist with marketing, tracking sales and spending and analyzing performance. A variety of different clouds allow users to analyze various data, maintain communication forums with customers, implement sales strategies and more.

In essence, Salesforce is the one-stop-shop for businesses to manage, maintain, communicate with and grow their customer base and revenue streams. 

How Does Sales force Work practically? 

The company is a service as software (SaaS) - which means it uses a cloud-computing, software distribution model that hosts applications and makes them available online. 

Sales force hosts numerous different cloud platforms that allow companies to interact with different data and service their customers in various capacities. 

As of 2018, Sales force has multiple different cloud platforms - a service cloud, marketing cloud, health cloud, app cloud, community cloud, analytics cloud, IoT cloud, Chatter cloud, commerce cloud, Heroku engagement cloud and more. 

According to the company, Sales force's sales cloud gives companies the ability to track contacts, opportunities and manage a team to increase sales. The service cloud allows companies to connect with customers and deliver premium customer service through showing customer activity and resolving issues. With their marketing cloud, Sales force helps companies track customer journeys while providing multichannel marketing campaigns, while their community cloud allows companies to directly interact with their customers and allows their customers to interact with each other. 

Additionally, Sales force has been implementing artificial intelligence (AI) into their Einstein platform, which helps simplify the analytics workflow and produce more accurate forecasting, among other benefits. Still, Sales force's entire model supports customer relationship management (CRM).

But, what is CRM? 

Customer Relationship Management (CRM)

Customer Relationship Management (CRM) is "a technology for managing all your company's relationships and interactions with customers and potential customers. The goal is simple: Improve business relationships. A CRM system helps companies stay connected to customers, streamline processes, and improve profitability," according to Sales force. 

On a basic level, CRM helps companies understand customer needs and data and facilitates deeper customer development and retention. 

Cloud-Based Software

Salesforce was the first to successfully implement a cloud-based CRM software. As a cloud-based service, Salesforce capitalizes on the benefit of data storage and accessibility from anywhere to draw a customer base. 

Using a cloud-based software allows companies to track live data, community discussions and manage analytics from anywhere - and with constantly updating speed and accuracy. 

Salesforce Business Practices

Sales force created the 1-1-1 Model of Integrated Philanthropy, where companies contribute 1% equity, 1% of their product and 1% of employee hours back to the community. The service developed Salesforce.org to give to nonprofits and educational institutions, supporting them with technology, volunteering and grants, according to their site.

Companies currently using this 1% pledge model include DocuSign (DOCU - Get Report) , Survey Monkey (SVMK) , Conga and more. 

In addition to their philanthropy, Sales force offers guidelines for best customer service practices on their site, including hiring the right people, managing customer expectations, focusing on first impressions, consistently collecting data, personalizing the experience, being where the customers are and maintaining focus. 

Sales force Mergers and Partnerships

Sales force's list of acquisitions seems to grow by the minute.

Most recently, the software company acquired MuleSoft for $6.5 billion, announced in March. 

Alongside the acquisition of MuleSoft, Sales force has recently integrated MuleSoft's "Any point" platform (which is a app-connecting dashboard) into their cloud products, and also recently launched its new 'Integration Cloud,' which The Street reported is a "toolbox aimed at integrating business processes" and streamlining processes.

MuleSoft's CEO Greg Schott was very optimistic about the merger earlier this year.

On line Service and Support

What is online customer service?

When a customer is having a problem, they're looking for immediate answers andsupport from the business. That's when they want to contact the business in some way, whether it's a phone call, email, or a form. When your business is online, you can operate 24 hours a day and 7 days a week all around the world

What is service and support?

Customer support is a range of customer services to assist customers in making cost effective and correct use of a product. It includes assistance in planning, installation, training, troubleshooting, maintenance, upgrading, and disposal of a product.

Regarding technology products such as mobile phones, televisions, computers, software products or other electronic or mechanical goods, it is termed technical support.

Customer support is considered as one of the main data channels for customer satisfaction research and a way to increase customer retention.

Channels of communication that companies may offer to customers for support:

Phone support

Customers speak directly to customer support representatives over the phone. For inbound calls, an IVR (Integrated Voice Response) can be programmed to route captured calls in a variety of ways with the potential goal of quickest resolution of a customer’s request/problem.

Phone Support is often used for order taking, pre-sales queries, upselling and cross-selling, troubleshooting etc.

Outbound calls are calls made to customers from the call center to give or take information.

Online chat

With online chat a web visitor seeks assistance, a text chat session is started by clicking on a link on the provider's website. The customer support representative interacts with the web visitor, understands the requirements, resolves the query and closes the interaction. Alternatively, based on the requirements the customer support representative could also trigger a chat session with the web visitor. Chat support assists with language barriers as both parties involved in the chat session may be able to use an online translation service to communicate. It is also considered less intrusive than phone support.[neutrality is disputed] Live chat support is often used for lead generation and fulfillment, campaign management, pre-sales and post-sales enquiries, complaint registration, tech support etc.

Email support

Email is the primary means to offer web-based assistance for your customers when matters do not require an immediate answer. Low-cost, non-intrusive and anywhere-anytime access are some of the advantages of email-based communications. Trouble Ticketing System and CRM Applications help keep track of a series of follow-up correspondence with a particular customer. Services offered via email response management is claims processing, polling/media analysis, subscription services, troubleshooting, complaint registrations etc.

Remote support

Solving problems of a computer at a particular location from a computer at another location is remote support. Companies can save considerable amounts of money on logistics through remote support. IT technicians are empowered with several tools that allow them to gain access to customers’ computers at various parts of the world. They are able to gain access and repair software related problems from remote locations. The need for a technician to visit the customers’ premises is mitigated. With the movement of applications from the desktop to the cloud, newer forms of browser based remote support have developed such as Cobrowsing.

On-site support

On-site support is the opposite of remote support. Certain kinds of assistance cannot be rendered remotely, like, hardware related problems. repairing a TV, replacing a spare part, servicing of air conditioners etc. In some occasions, a service provider might choose to take devices or gadgets back to their warehouse for repair.

Social media

Since the arrival of social media platforms like Facebook & Twitter, service providers have found that many of their customers spend plenty of time on them daily. To make it convenient to customers, many service providers have set up a webcare team as support channel on their social media profiles. Customers are able to ask questions, register complaints, clarify doubts etc. by interacting with the company’s staff through these social media platforms. With millions of users now gaining access to social media, this platform has become as prominent as traditional media like phone, live chat and email.

EDI: Functions & components.

What is EDI? How Does EDI work? What are the Benefits of EDI?

EDI = Electronic Data Interchange.

Definition: Computer to computer exchange of standard business documents such as purchase orders, invoices, inventory levels and shipping notices.

EDI software solutions facilitate the exchange of business documents and data across a variety of platforms and programs. What before would be manual processes that used phone calls, faxes, or paper as communication between companies ordering or selling goods, is now all done through EDI. It joins manufacturers, distributors, and retailers, through their information systems, in a worldwide business-to-business network.

How does EDI work?

All of your company’s information is stored within your ERP system, such as details related to purchasing, inventory levels, invoicing and billing, shipping and so on. EDI solutions like Mapadoc or Edisoft integrate with your Sage ERP system, accessing and using the information needed to create the documents you need to do business with other companies.

Both your suppliers and your clients have specific requirements as to how they do business. Things like ship-to addresses, unique pricing, and so on, that are determined when a deal is made and have to be taken into account when transactions take place. This is the data that gets used by EDI solutions to facilitate trading between businesses.

EDI uses the standard of data (ANSI or EDIFACT) to ensure requests from one party are compatible with the supplier’s information system so that the supplier can fulfill orders placed. It helps companies doing businesses with each other, particularly suppliers that can consistently meet the requirements and terms of their clients, like retailers and distributors.

This is all organized during the implementation of EDI software, when fields are mapped to each other so that the relevant data is used. When a request is received, the data is converted to fit the system of the recipient and crucial information for the transaction is used to generate all incoming and outgoing documents.

How EDI benefits businesses?

Relying on manual processes to ensure conditions of a deal are met is a cumbersome and obviously error-prone process. An EDI solution will replace a lot of manual processes with automated transactions, by setting up a communication network between systems in a supply chain.

The growth of EDI software solutions is a lot like that of other business software systems like ERP. Once a luxury of large enterprises, it’s made its way into the hands of small and medium businesses. It differs, however, in that a large trading partner, retailer, or distributor often imposes EDI as a requirement on members of its supply chain. So, being able to trade with large companies who require partners to have an EDI solution for transactions is the big picture benefit of implementing the software. On a smaller scale, the EDI software also improves efficiency for a growing small and medium enterprise.   

Benefit #1 – time saving and speed improvements 

Some of the benefits of EDI solutions are quite straightforward. The speed in which information flows with EDI systems is a clear example of that. With an EDI solution, incoming orders are created automatically, not needing user input or taking up employee time.

There are no delays due to different time zones, or having to get a person familiar with the term on the phone. No faxes, or paper trails, leading to better cash flow, faster buy-sell cycle time, shorter lead times, and reduced inventories.

Benefit #2 – accuracy and elimination of manual errors

The reliability of the information being exchanged between businesses improves with an EDI solution. Companies see a reduction of errors by eliminating manual and duplicate data entry. With access to the data of ERP systems, EDI solutions serve as not only the medium in which the information travels, but also ensures that information accessed and received is not only accurate but that conditions for the transactions are met.

This leads to improved relationship with trading partners, minimizing costly charge backs, late deliveries, or incorrect product prices.

Benefit #3 – security, and simplicity

The standardization of data within your systems will help your IT staff and employees know where to find it. The automatic generation of sales orders, invoices, shipment reports and so on will also make the work simpler for sales and warehouse staff.

EDI solutions are set up to be only accessible to pre-defined authorized users, equipped with audit trails and archives to track use and ensure security. With electronic confirmations to ensure receipt of documents between parties, it brings transparency to business relationships.

Integrating EDI with your ERP system can bring other benefits, as further business processes can be mapped and automated. A company looking for EDI is a company that is on the right path of growth and may find further benefits investing in business software solutions.

Electronic data interchange EDI

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners.

By moving from a paper-based exchange of business document to one that is electronic, businesses enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners.

Computer-to-Computer

Computer-to-computer EDI replaces postal mail, fax and email. While email is also an electronic approach, the documents exchanged via email must still be handled by people rather than computers. Having people involved slows down the processing of the documents and also introduces errors. Instead, EDI documents can flow straight through to the appropriate application on the receiver’s computer (e.g., the Order Management System) and processing can begin immediately. A typical manual process looks like this, with lots of paper and people involvement:

The EDI process looks like this — no paper, no people involved:

Business documents

These are any of the documents that are typically exchanged between businesses. The most common documents exchanged via EDI are purchase orders, invoices and advance ship notices. But there are many, many others such as bill of lading, customs documents, inventory documents, shipping status documents and payment documents

Standard format

Because EDI documents must be processed by computers rather than humans, a standard format must be used so that the computer will be able to read and understand the documents. A standard format describes what each piece of information is and in what format (e.g., integer, decimal, mmddyy). Without a standard format, each company would send documents using its company-specific format and, much as an English-speaking person probably doesn’t understand Japanese, the receiver’s computer system doesn’t understand the company-specific format of the sender’s format.

There are several EDI standards in use today, including ANSI, EDIFACT, TRADACOMS and ebXML. And, for each standard there are many different versions, e.g., ANSI 5010 or EDIFACT version D12, Release A. When two businesses decide to exchange EDI documents, they must agree on the specific EDI standard and version.

Businesses typically use an EDI translator – either as in-house software or via an EDI service provider to translate the EDI format so the data can be used by their internal applications and thus enable straight through processing of documents.

Business partners

The exchange of EDI documents is typically between two different companies, referred to as business partners or trading partners. For example, Company A may buy goods from Company B. Company A sends orders to Company B. Company A and Company B are business partners.

Components applications advantages

There are four major components of EDI.

1. Standard document format

2. Translator and Mapper

3. Communication software

4. Communication network

Trading Partners

These are business organizations that agree to exchange business information, data and documents via EDI. Small, medium and large organizations that are involved in various types of business activities are part of this group. For partners that dare to trade options that are now being made available are endless.

Translation Software

This software written in some of the most popular platforms regulates most of the operations. Some of its main features include,

It is dual purpose software and it converts files to or from an EDI format called a ‘document’

A document is known as an EDI message and the definition specifies the content and sequence of the data to be included

In the case of outbound business information, data or documents (we will refer to as document), an internal application file format is translated into an EDI format

For inbound documents, the EDI format is translated into an EDI format

For inbound documents, the EDI format is retranslated into an internal application file format

It is not necessary for trading partners to use the same translation software, nor is it necessary for them to have similar hardware platforms

Software and hardware independence is one of the major advantages of EDI

Communications

The transmission and reception of ‘document’ between trading partners using compatible hardware and software, which best suits their requirements.

EDI Functions

What are the functions and components of EDI?

The Components of an EDI System

A device on which to transmit the data.

An application or an outsourcing company that translates the data into a standardized EDI format.

A connection between the sender and the recipient.

Users to send and receive data.

How Does EDI Work?

EDI (electronic data interchange) works in minutes by using either a software system or an outsourced managed service to automatically send business documents and data between trading partners from computer to computer in EDI standard format, without humans.

Many business documents can be exchanged using EDI, but the two most common are purchase orders and invoices. At a minimum, EDI replaces the mail preparation and handling associated with traditional business communication. However, the real power of EDI is that it standardizes the information communicated in business documents, which makes possible a "paperless" exchange.

The traditional invoice illustrates what this can mean. Most companies create invoices using a computer system, print a paper copy of the invoice and mail it to the customer. Upon receipt, the customer frequently marks up the invoice and enters it into its own computer system. The entire process is nothing more than the transfer of information from the seller's computer to the customer's computer. EDI makes it possible to minimize or even eliminate the manual steps involved in this transfer.

The process improvements that EDI offers are significant and can be dramatic.

For example, consider the difference between the traditional paper purchase order and its electronic counterpart:

A Traditional Document Exchange of a Purchase Order	An EDI Document Exchange of a Purchase Order
This process normally takes between three and five days.	This process normally occurs overnight and can take less than an hour.
Buyer makes a buying decision, creates the purchase order and prints it. Buyer mails the purchase order to the supplier. Supplier receives the purchase order and enters it into the order entry system. Buyer calls supplier to determine if purchase order has been received, or supplier mails buyer an acknowledgment of the order.	Buyer makes a buying decision, creates the purchase order but does not print it. EDI software creates an electronic version of the purchase order and transmits it automatically to the supplier. Supplier's order entry system receives the purchase order and updates the system immediately on receipt. Supplier's order entry system creates an acknowledgment an transmits it back to confirm receipt.

Purchase Order and Invoices via ORISS

Transentric's Online Rapid Invoicing and Supply Solution (ORISS) system for non EDI-compliant Suppliers allows those Suppliers to receive Purchase Orders and send Invoices via a Web browser.