Electronic Commerce

What is Electronic Commerce?

Electronic commerce is the communication of business information (purchase orders, invoices, electronic fund transfers, quotations, bar coding, etc.) through various technological media formats. In its basic form, electronic commerce replaces paper with the transfer of computer readable data. Upon receipt of the data, the receiver is able to print the information or may incorporate the data into computerized business applications. In its most advanced form, electronic commerce implies that the data stream is created by sender’s computer system and processed by the receiver’s computer system without human intervention.

What are the Benefits of Electronic Commerce?

The successful application of electronic commerce eliminates costs associated with mail preparation and handling by all parties. In addition, mail delays are eliminated and redundant data entry and potential errors are reduced. Electronic commerce also shortens the cycle time, improves customer service, reduces inventory levels and enhances overall operating efficiency.

How Did Electronic Commerce Get Started?

The first and most prevalent form of electronic commerce is EDI (electronic data interchange). In 1979 the American National Standards Institute (ANSI) chartered a new committee know as the Accredited Standards Committee (ASC) X12 to develop uniform standards for the electronic interchange of business documents. The work of ASC X12 is conducted through subcommittees and task groups whose major function is the development of new EDI standards and the maintenance of existing standards. Membership in X12 is open to all organizations and individuals with a significant interest in the standards. (TheĀ Data Interchange Standards Association, which supports the use of EDI standards for electronic commerce, is the secretariat for X12). The rail industry has adopted the ASC X12 standards for electronic data interchange and has created its own guidelines which are a fully compliant subset of these standards.