Idhasoft eBook Streamlining EDI Design With SAP Final OCT2012

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


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.



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



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.



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



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.



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)



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)



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.



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

Documents

Idhasoft eBook Streamlining EDI Design With SAP Final OCT2012