Page 1 Copyright 2012 Idhasoft, Inc. www.idhasoft.com/sap Phone: 877- 454-4727
Streamlining EDI Design and Implementation
Leveraging SAP-based Middleware and Cloud Networking
To Reduce Complexity and Costs
Contents
Overview of Electronic Data Interchange (EDI) ............................................................................................ 2
Basic Elements of an EDI System .................................................................................................................. 3
A Disciplined Approach to Defining EDI Requirements & Objectives ........................................................... 5
SAP-Based Modules, Methods & Tools for Implementing EDI ..................................................................... 5
Business-Specific EDI Interfaces & Detailed Data Mapping .......................................................................... 8
Leveraging Standards-Based Networking & Cloud Infrastructures .............................................................. 8
Comprehensive Systems Integration ............................................................................................................ 9
The Bottom Line: ........................................................................................................................................... 9
ABOUT IDHASOFT: .................................................................................................................................. 10
Streamlining EDI Design and Implementation
Page 2 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
Overview of Electronic Data Interchange (EDI)
EDI is generally defined as computer-to-computer interchange of specifically formatted messages that
represent documents within different organizations business systems. EDI offers a standardized method
for exchanging a sequence of messages between two parties, either of whom may serve as originator or
recipient.
EDI is distinguished from other types of electronic communication or data exchange in that the usual
processing of received messages is by computer only. Human intervention in the processing of a
received message is typically intended only for error conditions, for quality review, and for special
situations. For example, emailing or otherwise transmitting human-readable business information is not
considered EDI. Also the transmission of binary or textual data is not actually EDI unless it is specifically
formatted as data elements of an EDI message and is not normally intended for human interpretation as
a routine part of the online data processing.
EDI can be best be defined as the transfer of structured data, by agreed upon message standards, from
one computer system to another without human intervention.
Because EDI has now become such an integral element of supply chain operations for most large and
many midsize companies it has also developed into a fundamental requirement for doing business with
these organizations. In essence, if your company cant speak EDI then you run the risk of being left
out of the loop for participating in valuable and profitable inter-company opportunities.
From an efficiency standpoint, EDI also can significantly streamline the flow of routine transactions
between companies, thereby reducing the cost and time required for order processing, fulfillment,
invoicing, payment, etc., while also eliminating human errors and boosting customer satisfaction.
Implementing EDI can seem like a daunting task at first because of the need for software systems that
can convert raw data from each companys accounting system into EDI-formatted information, but the
payoff can be huge in terms of transaction speed and accuracy, especially when scaled up for handling
large volumes of transactions.
Actually, the initial investment in an EDI-capable system can yield significant ongoing dividends in that it
can be leveraged for implementing EDI hand-shaking transactions with a wide range of companies and,
since EDI data is agnostic with regard to the underlying communications medium, it can be used across
virtually any private networking or cloud-based infrastructures.
The bottom line is that EDI can provide both
enhanced operational efficiency
and improved profitability.
Streamlining EDI Design and Implementation
Page 3 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
Basic Elements of an EDI System
Because every companys internal software systems are uniquely tailored to meet specific requirements,
EDI acts as a universally standardized translation methodology that enables the interchange of data
between companies.
As shown below, the basic elements in the EDI process flow consist of converting the internal data into
an Intermediate Document (IDOC) format that is processed through the originating companys EDI
subsystem and transmitted across the communications link. The receiving companys EDI subsystem
then converts the IDOC into the appropriate formatting for their internal accounting system.
Some major sets of EDI standards include:
The US standard ANSI ASC X12 (X12) is predominant in North America.
UN/EDIFACT is the international standard that is predominant outside of North America.
The ODETTE standard is used primarily within the European automotive industry
Streamlining EDI Design and Implementation
Page 4 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
In order to facilitate the exchange of accurate and detailed information between different business
systems, EDI defines a variety of specific document types to address the range of typical generic
transactions that occur within any business system.
In general, these EDI documents contain the same information that would normally be found in a paper
document used for the same organizational function. For example an EDI 940 ship-from-warehouse
order is used by a manufacturer to tell a warehouse to ship product to a retailer. It would typically
include a ship to address, bill to address, a list of product numbers, UPC codes, quantities, etc.
The following list contains examples of some commonly used EDI
transactions.
180 - Return Merchandise Authorization on Notification
810 - Invoice
812 - Credit / Debit Adjustment
816 - Text Message
820 - Payment Order / Remittance Advice
830 - Planning Schedule
832 - Price / Sales Catalog
834 - Benefit Enrollment and Maintenance
835 - Health Care Claim Payment/Advice
837 - Health Care Claim
850 - Purchase Order
852 - Product Activity Data
855 - Purchase Order Acknowledgement
856 - Ship / Notice Manifest
860 - Purchase Order Change Request
864 - Text Message
867 - Production Transfer and Resale Report
869 - Order Status Inquiry
870 - Order Status Report
940 - Ship from warehouse order
997 - Functional Acknowledgment
Although most people think of EDI only in terms of supply chain management, EDI technology is also
used to exchange inter-company information in a wide range of industries, such as medicine (patient
records and laboratory results), transport (container and modal information), engineering, construction,
and many other fields. In some cases, EDI can even be used to create entirely new business information
flows to support new operations that were not previously existent as paper-based flows.
Streamlining EDI Design and Implementation
Page 5 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
A Disciplined Approach to Defining EDI Requirements & Objectives
The successful integration of EDI within an overall business system requires a structured implementation
process that clearly defines objectives ahead of time and lays out the specific parameters, schedule and
outcomes for the project. Every company is unique and has specific requirements and issues that must
be taken into account.
Idhasofts experience over many such implementations has shown that any successful EDI project
requires a disciplined approach with careful attention to the following areas.
Up-Front Planning
Top-down Design
Detailed EDI Data Mapping
Pre-Live Testing & Training
Step-by-Step Go-Live Process
Roll-out EDI to Trading Partners
On-going Monitoring and Optimization
The following sections provide an overview of the SAP-based capabilities that can be leveraged for
implementing EDI systems, with specific focus on areas where Idhasoft SAP experts have already
tailored these capabilities to address customer requirements.
SAP-Based Modules, Methods & Tools for Implementing EDI
With its comprehensive ERP capabilities and worldwide installed base, SAP software offers a solid
foundation for implementing EDI subsystems to support both out-bound and in-bound EDI transactions.
The primary method for implementing EDI is through the use of Application Link Enabling (ALE)
technology. ALE is a proprietary methodology that is used for creating and running distributed systems
within SAP environments and it also provides a convenient technique for designing SAP-based
subsystems to communicate with external EDI partners.
ALE is comprised of the following three layers and incorporates controlled exchange of data messages,
thereby ensuring data consistency across loosely coupled applications.
Application Services
Distribution Services
Communication Services
Streamlining EDI Design and Implementation
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The fundamental approach of ALE is to provide a distributed and fully integrated R/3 system that is
segmented across the three distinct layers. This enables every application to be fully self-sufficient and
provides an inherent level of built-in autonomy and data redundancy. The ALE architecture thus allows
for applications to be easily distributed and synchronized via message-based communications.
In ALE implementations, the applications in the sending system would create EDI-compliant IDOC
intermediate files and validate all required IDOC data, version levels, filtering and receiver information
within the SAP environment. The IDOCs are then transmitted over any communications medium and
are received, unpacked, filtered, converted and processed by the receiving system.
This ALE-based methodology is also used to create an external EDI-compliant system when a non SAP
system is on the other end of the communications channel. ALE communication occurs from the SAP
side and EDI from the non-SAP side, with the standards-based IDOCs providing a universal mechanism to
deliver the data between the ALE and EDI systems. For the exchange of data between a SAP and Non
SAP system, an EDI subsystem is used to convert and deliver the IDOC data.
Streamlining EDI Design and Implementation
Page 7 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
Message Control (NAST) is primarily used for outbound EDI communications from the SAP application
and Workflow is typically used to manage inbound EDI data.
Another key aspect of any EDI implementation project is to identify and define the roles of various
business and technical staff (agents) within the customer and partner organization. From the list of
possible agents, the implementation team determines the specific permitted agents for both the
Business Layer and the Technical Layer, with their access and data modification permissions clearly
defined.
(Image provided by SAP AG)
(Image provided by SAP AG)
Streamlining EDI Design and Implementation
Page 8 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
Business-Specific EDI Interfaces & Detailed Data Mapping
Over the course of many SAP-based inter-company EDI implementations, Idhasoft consulting designers
have already created a broad range of ALE-to-EDI translations and IDOC formats to support virtually all
of the typical business transactions used in supply chain management as well as other applications.
The key to both rapid development and robust ALE-to-EDI functionality is the ability to provide accurate
data mapping between the internal application and the EDI standards. Having worked with most of the
leading EDI translation systems and with deep experience in both ANSI and EDIFACT implementations,
Idhasoft is able to build upon proven and tested subsystems along with the ability to quickly adapt them
for any set of special requirements.
From the initial Conference Room Pilot (CFR) script,
through design, coding, testing, training and Go-Live
implementation, the entire EDI project is coordinated
between Idhasoft and the in-house customer team
members in order to fulfill both the high-level vision and
the detailed objectives of the project.
Leveraging Standards-Based Networking & Cloud Infrastructures
One of the major advantages with modern EDI implementations is the ability to communicate the data
over virtually any standards-based communications network, including internetworking cloud-based
infrastructures.
By leveraging widely-accepted and well-defined
standards such as HTML, XML, HTTP(S), RFC, R/3, BAPI
and Idoc, inter-company EDI systems no longer need be
confined to private value-added-network (VAN)
structures, thereby both increasing communications
flexibility and driving down costs.
Working with either the proven SAP Supply Chain Suite or
with customer-specific network requirements, Idhasoft
has the hands-on experience to build an efficient any-to-
any cloud-based EDI connectivity solution that helps
eliminate costly point-to-point networks and enables
broad participation with trading partners anywhere in the world. (Image provided by SAP AG)
Streamlining EDI Design and Implementation
Page 9 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
Comprehensive Systems Integration Supply Chain Management is undergoing a process of rapid change and is no longer simply about
reducing costs. More importantly it is about enhancing business value and embracing proven disciplines
to leverage the supply chain for competitive differentiation, financial return and demand driven
operational and innovation excellence.
Idhasoft is a premier provider of SAP-based end-to-end Supply Chain consulting services. Our team of
consultants possesses industry expertise in a full range of both strategic and tactical supply chain
services, which assist our clients in realizing the full potential of their supply chain investments.
The Bottom Line: EDI implementations require a deep understanding of business processes, supply chain requirements,
data-interchange standards and the underlying software technologies for mapping and processing EDI
information. Working with a partner who already knows the territory is vital for ultimate success.
Upfront planning and commitment is critical to achieve the following key benefits:
Cost effective interchange of data without human intervention
Reduced risk of data entry errors and faster processing times
Scalability for large volumes of transactions
Reduced paperwork and faster retrieval of information when needed
Standardized data interchange method for use with a range of supply chain partners
Networking flexibility for communications via private or cloud-based networks
EDI is just not an expense
Its an untapped asset waiting to be realized.
Streamlining EDI Design and Implementation
Page 10 Copyright 2012 Idhasoft, Inc. & www.idhasoft.com/sap Phone: 877- 454-4727 US Data Management, LLC www.usdatamanagement.com Phone: 888-231-0816
ABOUT IDHASOFT: Idhasoft Inc. is a global leader in strategic technical solutions, SAP gold channel partner and 2010 SAP
Business All-in-One Partner of the Year-USA, providing innovative end-to-end business solutions to
companies around the world. Idhasoft founding vision is to serve the SMB marketplace with a unique
blend of business solutions and services. We help our clients drive efficiency, improve profitability and
build a lasting competitive advantage.
Idhasoft capabilities and services include the following:
100% commitment to SAP solutions, services and technologies
SAP Gold All-in-One Solution Provider and Premier Implementation Partner
Partner Center of Excellence Certified master VAR
SAP Certified Industry Specific Solutions
Dedicated SAP Practices- ERP, CRM, SRM, SCM, BI and Net Weaver/Portals
Senior SAP experienced consulting team with both industry and SAP experience
Invited expert each year at ASUG, SAPPHIRE and other SAP conferences
State-of-art Solutions Center with SAP Ramp-up Applications
Idhasoft's pre-configured Industry and Solutions templates
Our consultants work closely with SAP COE and SAP Product Development