EDI and You

Save time & money with FBBS.FediVAS and EDI

E-lectronic D-ata I-nterchange

If you sell products through GSA or the Federal Supply Service, we want to talk to you about Electronic Data Interchange, or EDI. EDI is a business process that when implemented can save you both time and money.

We know from experience that you will find using EDI to be a much more economical, efficient, and reliable way of doing business. The number of EDI-capable companies is growing fast. By converting to EDI now, you'll first gain a competitive advantage over businesses without EDI and later be competitive when most businesses are using EDI.

What is EDI?
Generally speaking, EDI is the computer-to-computer exchange of common business documents over telephone lines using a standardized electronic format. Through the use of EDI you can replace the very costly, labor and time intensive process of typing and retyping paper forms and mailing them to your business partners.

Current estimates are that 75 to 80 percent of the information coming out of one business partner's computer system is input into the other's system. EDI allows for the rapid, hands off movement of this information between partners, thereby eliminating the need to re-key the information and eliminating the errors associated with the re-keying process.

Because the movement of data between business partners is all electronic, there are no forms to type and nothing to mail. In fact, every exchange between the two partners can be accomplished through EDI except the actual delivery of the goods or service.

How is EDI Possible?
Use of a standard electronic format allows EDI to work. X12 is the designation given this standard by the American National Standards Institute (ANSI). Within X12, common business documents - such as purchase orders, invoices, and ship notices - have been developed as "transaction sets."

Through X12, EDI enables otherwise incompatible computers to communicate. A document produced on the FSS system is translated into X12; the translation includes identifying each piece of data and creating an electronic "envelope" for the electronic transmission. On your system these envelopes are opened and, by using the identifiers, the X12 document is translated for use in your system.

The Role of a VAN
The value added network, or VAN, acts as a postal system for EDI. These third-party service providers furnish clients with electronic mailboxes, storage and forwarding services, tracking capabilities, and translation services. VANs are an integral part of the EDI picture and without them a large scale EDI program is virtually impossible. When using a VAN there is no need to worry about different communications protocols between partners, a partner's system downtime, or system security risks. VANs provide 24-hour access to you and your business partners' mailboxes and can ensure data integrity.

But they aren't free. As a matter of fact they are raising prices monthly.
Which VAN you choose is a business decision that is up to you. While it may be beneficial for you to be on the same VAN as your large trading partners, you don't have to be. VAN interconnects allow different VANs to pass information back and forth. You can determine which VAN best suits your needs for the price.

The Role of a VAS
This value-added-service Provider, or VAS, acts as your total full service outsourcing arm. We make sure that each day you receive any and all transaction sets you desire from FACNET. We will translate your data to and from EDI and you, in a format you can easily read and respond to. We will work with your organization to create the best communications process for getting bids and purchase orders to and from you in as close to real time as possible.

We also offer Full Service GSA/and FSS Schedule Contract Consulting Services which take care of the entire process from the preparation of the Solicitation to Electronic Funds Transfers into your Bank.

What Does EDI Change?
From one view point, EDI is merely a different way of doing the same business you are doing now. From another, EDI can change your entire way of doing business if you utilize it. The benefits you can gain from the elimination of paper go well beyond mail time and clerical savings. Through EDI, you choose how you want to use the information you receive. How would you like that information stored, how would you like to retrieve the data? Do you want parts of a document to go to production and a different part to go to finance? With EDI you make the call. Operating efficiencies that may not be possible in a paper environment are supported by your computers.

EDI does not change any of the contracting requirements you have with FSS. You will still deal with your contracting officer concerning your business with FSS. EDI brings administrative efficiency to the performance of your contract.

FSS is working to use EDI to its fullest extent. As the use of EDI expands in FSS, you will also benefit. For example, you can use EDI to send invoices and can even get your payment through Electronic Funds Transfer (EFT). Through the use of EDI and EFT you will be able to cut up to 3 days of float on your accounts receivable, and saving that kind of money is hard to pass up.

What Are the Costs Associated with EDI?
The most basic elements of an EDI program consist of a PC (personal computer), a modem and communications software, X12 translation software, and an electronic mailbox on a value-added-network (VAN). If you needed to purchase everything listed above, you could begin an EDI program for about $4,500. A recent industry article in VARBusiness estimated EDI startup costs at $50,000.00.

Of course your costs will vary depending on the type of computer you have and how developed you want your EDI program. Translation software runs from a low of about $500 for PCs to $15,000 and more for mainframe software. Of course much of what you spend depends on how you plan to use EDI.

The other cost associated with EDI is the VAN cost. This is dependent on what VAN you choose and what services it provides to you. The VAN cost to send and receive a typical purchase order is about $0.15 to $0.20 per blocks of characters, transactions or both, plus monthly fees and someone on your end to understand and operate it with proficiency.

How Do I Get More Information?
If you would like to save your company time and money, would like to conduct your business more efficiently, and would like to position yourself for the future, please give us a call.