Electronic Data Interchange and Interorganizational Systems - Thesis Proposal Example

?Running Head: Electronic Data Interchange Electronic Data Interchange and Interorganizational Systems Instructor Name Date of Submission Electronic Data Interchange and Interorganizational Systems Introduction Electronic Data Interchange (or EDI) can be regarded as computer-to computer exchange of formatted messages which embody documents excluding monetary instruments. EDI works by the means of sequential messaging primarily between two organisations or parties. The transmission is based on a simple originator-recipient model. The data can be transferred from the originator to the recipient by telecommunications or transported physically on electronic storage devices (Kimberley, 1991). This technology is intricately related to the past, present and future of the growth of interorganizational systems (IOS). For example, the computer-to-computer exchange of data between buyers and suppliers using standard format has been increasing sharply with the aid of EDI technology. But on the basis of meta analysis of results from empirical literature, some researchers suggest that the research implications in this sphere of business technology are somewhat conflicting and inconclusive. According to them, there are numerous barriers in implementing EDI (Gangeswari, Hamid and Bakar, 2010; Narayanan, Marucheck and Handfield, 2009). The proposed research will be focused on enumerating and analysing the benefits of using EDI. The research will also examine the contradicting results, arguments against EDI and real world cases in this field. Research Question Can EDI improve information attributes such as accuracy and timeliness and thus lead to higher performance of trading partners? Objectives 1. Construction of a literature based framework that would evaluate the benefits of using EDI. EDI adoption factors entailed in the theoretical review will be specifically stressed. 2. States of information attributes before and after the implementation of EDI technology will be examined on the basis of case studies involving organisations which use EDI and their subsidiaries. 3. By using sample survey methods, feedback from organisation stakeholders will be gathered and analysed to evaluate the efficiency of EDI in ensuring higher performance of trading partners. Quality action index will also be used. Literature Review The prospects of improvement of information attributes regarding business involving interorganizational environment have to be explored in the light of the EDI technology. EDI technology can be considered as a part of the information and communication technology which has evolved along with the improvement of computers, software applications and networking methods. Today, EDI has become a prime business technology. However, the course of the evolution of this technology has been complicated. “Organisations like ECR, EAN within Europe, and VICS, UCC within USA, have worked over the last 25 years to create the EANCOM standard within the consumer and retail industry. They based their efforts on the United Nations initiative to come to a worldwide standardisation of data interchange: the UN/EDIFACT standard.” (Leeman, 2010). Hence, EDI has a history of synchronising diverse standards and techniques. Moreover “for nearly two decades, electronic data interchange (EDI) has been widely viewed as a technology pivotal to supply chain management that has also provided benefits to firms on multiple levels” (Narayanan, Marucheck and Handfield, 2009). Also, it should be mentioned here that “EDI was the first form of electronic commerce to be widely used in business – some 20 years before anyone used the term ‘electronic commerce’ to describe anything!” (Schneider, 2008). Hence, literature on business technology reveals that EDI has been a reliable, dynamic and progressive technology for nearly the past two decades. EDI has several utilities in the present day business world. Therefore, it is important to assess its potential to deliver higher performance of the trading partners. Successful implementation of EDI can bring about substantial positive changes in the functionary of supply chain management systems (Leeman, 2010; Narayanan, Marucheck and Handfield, 2009). EDI has also been instrumental in implementing modern ecommerce involving business-to-business (B2B) transactions, point of sale (POS) processes, billing, quotations, etc. (Schneider, 2008). However, Yao, Dresner and Palmer (2009) have pointed out that internet-based electronic market “outperforms the EDI channel when buyer and transaction characteristics favour the use of EDI.” They further suggest that the modern organisations must replace EDI with newer technologies. Also, Boone and Kurtz (2010) have described EDI as one of the oldest applications of technology to business transactions. Yet, evidence based analysis shows that EDI is one of the major reasons Wal-Mart is able to operate with efficiency that has made it the market leader in retailing; EDI provides systems like quick response and prompt invoicing in this field (Boone and Kurtz, 2010). Moreover, deployment of EDI technology has been vital for the success of international trade, as it requires bulk of data exchanges between multiple parties across diverse geographical environments and distances, and this remains a very important deployment factor even today (Gangeswari, Hamid and Bakar, 2010). EDI technology stands as a time tested tool for maintaining and improving the critical business processes entailed in retailing, supply chain management, ecommerce, etc. at both the local and global levels. Most recent examples of successful EDI implementations involve the modernisation and synchronisation programs in healthcare and pharmaceutical sectors too (Integr8 NHS Project Update, 2008; SoftCare EC Solutions Inc, 2007). Due to certain barriers in the course of the deployment process, EDI is time and again stagnant with a single set of transactions without further integration (Gangeswari, Hamid and Bakar, 2010). However, Kimberley (1991) points out that EDI technology allows an organisation to avail advantage of the very benefits of manipulating and storing data without the time and cost necessary for manual entry and client server architecture. Apart from information attributes like accuracy and timeliness, security is also a critical consideration in contemporary business. Alternative technologies like Internet-based electronic market may be infiltrated by hackers, but EDI technology security standards appear to be stricter. “Historically, electronic messages produced by systems following the guidelines as outlined in the IETF EDIINT Working Group specifications AS1, AS2 and AS3 did not have a way to provide a standardized transport neutral mechanism for compressing large payloads. However, with the development of EFC 3274, ‘Compressed Data Content Type for Cryptographic Message Syntax (CMS)’, we now have a transport neutral mechanism for compressing large payloads.” (Harding, 2010). Compressed data structure enhances transmission speeds, hence ensure timeliness. CMS technology on the other hand provides encryption and hence robust security. In sum, EDI is designed to automate interorganizational communications, ensure fewer error and lower cost per transaction over manual processing methods; electronic exchange of information in fact reduces flaws and increases process efficiency (Cheng and Choi, 2010). According to Edi-guide.com, EDI provides operational, tactical and strategic advantages to the trading partners by increasing productivity, security, speed of trading cycle and scope of quality control. Finally, corporate trading relationship can be considered as a major element of modern business since globalisation has drastically extended its scope and extent. Contextually, with the help of EDI, “business units, departments, and regional offices are co-ordinated together. This strengthens inter company relationship, making the entry of new competitors more difficult and gaining more new business opportunity.” (Edi-guide.com, 2010) Research Techniques This research is intended to investigate the potential of EDI technology in the context of delivering higher performance of trading partners especially in terms of the information attributes like accuracy, timeliness, etc. Hence, EDI has to be understood and analysed from management research perspective. The growth of interorganizational systems (IOS) is rapid and pervasive in the modern business environment which has expanded the scope of qualitative research in this field. Interviews: Although EDI is primarily based on data transmission without human intervention, the results of implementing this technology have to be enumerated and comprehended by obtaining the opinions of the individuals involved in EDI-enabled businesses and organisations. Conducting interviews can achieve this end, where the interview questionnaire will act as the sample survey instrumentation. The survey population would comprise the stakeholders in the organisation like suppliers, employees, intermediaries, customers and communities. Interview sessions with such people entailing questions regarding the operational, tactical and strategic aspects of using EDI can give valuable information. By asking objective questions (e.g., multiple choice questions), ample data can be obtained which can be analysed using statistical programs with the help of computers. Case Studies: Case studies are the best way to evaluate the conditions of an organisation before and after EDI implementation. The case of Wal-Mart can be scrutinised, which adopted EDI in the 1990s and still refuses to do business with manufacturers and distributors who do not use compatible EDI standards (Boone and Kurtz, 2010). Besides, London Drugs represents another interesting case. The company has realised that its Scan Based Trading program aimed to support a direct store delivery system needs updated and more integrated EDI implementation (SoftCare EC Solutions Inc, 2007). The case of Kings College Hospital NHS1 Foundation Trust is also very important. The hospital is taking part in the ambitious NHS IT program which requires large scale database integration project involving technologies like EDI (White, 2010; Integr8 NHS Project Update, 2008). Utilising empirical literature in the context of further case study, the research of Cox and Ghoneim (1998) on strategic use of EDI in HMSO2 provides ample insight of another London based case example. The case study proves that EDI implementation with corporate strategy exploit available technology innovatively. Modelling: Qualitative study of the findings in the course of literature review, interviews and case studies can be based on further research modelling comprising two phases: 1. Simplification of Observations 2. Interpretation of Results During simplification, the material is examined from the theoretical view point of the research project and relationships between the various observations are determined. Interpretation would involve answering the research question and the other queries that come up in the due course of the research itself. Data Collection Procedure Data collection procedure will consist of survey instrumentation in the form of a detailed and analytical questionnaire. The data will be primarily collected through an extended survey program consisting of interviews with the stakeholders in the selected organisations that use EDI. Review of empirical data gathered from Internet and journal articles will play a supportive role. The ASDA supermarket chain (which is owned by Wal-Mart) can be a good source of customer, supplier, distributor and employee feedback on EDI. Valuable data can be available from the Kings College Hospital regarding EDI implementation in healthcare. Visiting HSMO and practically examining its contemporary situation in the light of the developments of the 1990s can help in refining and expanding the survey and collect more data. Internet based research on the organisations like London Drugs, Software EC Solutions Inc, etc. can also yield considerable amount of secondary data. The main difficulty in collecting data is the issue of access. The organisations selected for the study are less likely to allow access for research purpose without reference from a reputed authority. Moreover, Wal-Mart is a US based company while London Drugs is based in Canada. Hence, Internet research will focus on them. However, ASDA supermarket, Kings College Hospital and HMSO can be very resourceful sites of data based in London. More London/UK based organisations can be pointed out and visited in the course of the study. Analytical Technique Primary data will be collected from a survey population consisting of the stakeholders in the selected organisations. The technique of sample survey will be implemented which is expected to maximise precision even with limited resources. Emphasis will be put on collecting objective data that can be collected mainly through multiple choice questions. Computer applications can further be used to analyse the data gathered. Word processing programs can help in qualitative study of the verbal (spoken or written) information which can help in analysis by marking with codes the recurring items present in the text and subsequent classification. Textual results with ample illustration can be reported by the analytical technique of word processing which will involve preliminary analysis. Moreover, electronic manipulation of the gathered data (mainly the objective results) can be a very effective analytical technique based on inferential statistics. After collected data is made operational in terms of measurability, analytical technique of computer software enabled statistical investigation can help in drawing dependable conclusions. Software applications like Statistical Analysis Software, SPSS from IBM, etc. can be utilised for the purpose. EDI implementation: After data collection, an EDI application will be implemented. By analysing the collected data, the possible areas of errors and flaws and problems faced by the organisation stakeholders can be identified. Subsequently, practical development of and EDI application will address these issues especially in terms of information attributes like accuracy and timeliness. In creating the EDI application, framework EDI HIPAA can be utilised which can check for any expression that can be entered into the SEF file (EDIdEv – EDI Development, n.d.) The focus will be on transmission flow involving communication with internal and external contacts, generation of EDI process reports, handling EDI errors to ensure timeliness, creation of non standard data files and testing of inbound/outbound transmissions (Abell, 2002). In implementing the framework EDI HIPAA, separate SEF files specific to the trading partners should be created and tested to ensure better performance. The testing and validation process can be accomplished with the help of a dependable tool like ASP.NET, VB 6, C#, etc. (EDIdEv – EDI Development, n.d.) Reference List Abell, R.B. 2002. An EDI Testing Strategy. Available: http://www.ehcca.com/presentations/HIPAA4/1_07.pdf. Last accessed 12 June, 2011. Boone, L.E. and Kurtz, D.L. 2010. Contemporary Business. Hobokon: John Wiley and Sons. Cheng, T.C.E. and Choi, T.M. 2010. Innovative Quick Response Programs in Logistics and Supply Chain Management. New York: Springer. Cox, B. and Ghoneim, S. 1998. ‘Strategic use of EDI in the public sector: The HMSO case study.’ The Journal of Strategic Information Systems, Vol. 7, No. 1, pp. 37-51. EDIdEv – EDI Development. N.d. HIPAA EDI Solution Software Tools. Available: http://www.edidev.com/edidev_hipaa_support.htm. Last accessed 12 June, 2011. Edi-guide.com. 2010. Advantages of EDI. Available: http://www.edi-guide.com/edi-benefits.htm. Last accessed 7 June, 2011. Gangeswari, K., Hamid, A. and Bakar, A. 2010. ‘Integration of electronic data interchange: A review.’ Jurnal Kemanusiaan, Vol. 15, No. 1, pp. 63-69. Harding, T. 2010. RFC 5402 – Compressed Data within an Internet Electronic Data Interchange (EDI) Message. Available: https://tools.letf.org/html/rfc5402. Last accessed 7 June, 2011. Integr8 NHS Project Update. 2008. Kings College Hospital Foundation Trust Integr8 NHS Case Study. Available: http://www.nhsleadership.org.uk/images/library/files/Kings_College_Case_Study.pdf. Lat accessed 10 June, 2011. Kimberley, P. 1991. Electronic Data Interchange. London: McGraw-Hill. Schneider, G. 2008. Electronic Commerce. Scarborough: Cengage Learning. Leeman, J.J.A. 2010. Supply Chain Management. Norderstedt: Books on Demand. Narayanan, S., Marucheck, A.S. and Handfield, R.B. 2009. ‘Electronic data interchange: Research review and future directions.’ Decision Sciences, Vol. 40, No. 1, pp. 121-163. SoftCare EC Solutions Inc. 2007. EDI Customer Case Study – London Drugs. Available: http://www.edi-solution-info.com/Case%20Studies/LondonDrugs/CaseStudy-LondonDrugs.htm. Last accessed 8 June, 2011. White, T. (2010). The Doctor’s Handbook Part 2: Understanding the NHS (4th Ed.) Oxon: Radcliffe Publishing Ltd. Yao, Y., Dresner, M. and Palmer, J. 2009. ‘Private network EDI vs Internet electronic markets: A direct comparison of fulfilment performance.’ Management Science, Vol. 55, No. 5, pp. 843-852. Read More