1. Introduction

All large enterprises, and many small- and medium-sized companies have basic business support systems (Human Resources, financial) or Enterprise Resource Planning (ERP) systems that automate business operations, such as billing, accounts payable and receivable, payroll, and purchasing. These systems, while automating back-office or internal operations, are not designed for commerce, that is, transactions between companies. Over the years, EDI has grown to fill this niche in large companies.

Electronic Data Interchange (EDI) is an electronic mean for companies to exchange business documents (purchase orders, invoices, etc.) in a structured and computer-processable format. EDI has been in use in the United States for more than twenty-five years but its scope has mainly been limited to large companies. Gartner Group estimates that less than 1% of US businesses use EDI [4]. The primary barrier is cost; which includes the cost of implementing EDI software and the cost of communication. In general, only large companies can afford to utilize EDI to conduct business transactions with their trading partners because EDI, in most cases, requires a Value-Added Networks (VAN) to support mailboxing, protocol conversion, standard conversion, implementation assistance, auditing, and other value-added services. These services can be costly. Because of the EDI's cost, most medium and small companies still use traditionally non-automated means (mail, fax, telephone, etc.) to communicate with their trading partners. (Exceptions are those that are induced to use EDI by essential trading partners.)

With the popularity of the Internet, conducting EDI over the Internet offers a low-cost alternative that is especially suitable for medium- and small-size companies. In this paper, we propose a Web-based Internet EDI model that enables companies to engage low-cost EDI business transactions over the Internet as well as supports valued-added functions which traditionally provided by VANs. Additionally, the proposed model offers end-to-end integration that automates the flow of data between trading partners' back-office or internal systems.

The remainder of this paper is organized as follows. In Section 2, we outline the benefits of doing EDI. Section 3 discusses major issues and shortcomings related to the traditional EDI. Internet EDI provides an alternative to the traditional EDI as described in Section 4, followed by our proposed model and its major components in Section 5. Conclusions are given in Section 6.