EDI stands for Electronic Data Interchange. Electronic data interchange is an electronic way of transferring business document in an organization internally, between its various department. Externally with the suppliers, customers, and subsidiaries. In electronic data interchange, paper document are replaced with electronic document such as word document, spreadsheet etc. The transfer of structural documents by agreed message standard, from one computer system to another computer system by electronic means is EDI .
There are four elements each of them are essential to form electronic data interchange system :-
1. Structured data :- electronic data interchange transactions are composed of code value and short pieces of text each element with strictly defined purpose.
2. Agreed message standard :- the electronic data interchange transactions should have a standard format. The standard is not just agreed by trading partner but it is a general standard agreed at a national or international level.
3. From one computer system to another computer system :- the electronic data interchange message is sent in between two computer applications. There is no requirement for the people to read the message or re-key it into the computer system.
4. By electronic means:- usually this is done by the data communication but the physical transfer for magnetic tape or proper this would be within the definition of electronic data interchange.
Thus there are two important thing in electronic data interchange :-
1) Electronic data interchange replaces paper based document with electronic ones.
2) The data in a document is transmitted in a standardized format so that both the reader and the receiver can accurately read the document.
Thus the electronic data interchange is paperless technology of e-commerce.
When an organization adopts electronic data interchange, security control become important factor. Because when transaction take place between two trading partners confidentiality is necessary and important .
A full electronic data interchange security system should include the three levels of security .
1. Network level security:- this level of security ensure that the users not registered in the electronic data interchange network are not able to gain access to its facilities.
2. Application level security:- ln any given electronic data interchange application of the software, there might be some data you are not allowed to see, some you can see but not alter.
3. Message level security:- Here the data should be secured against non-Bonafide messages, duplication, loss or replay of message, deletion of message.