Business Process Redesign Using EDI: the BHP steel experience

Abstract

EDI should not be seen as a competitive weapon - it does not offer a sustainable competitive advantage to its users as did the earlier inter-organisational systems (such as the various airline reservation systems). Instead EDI provides a standardised infrastructure upon which an adopting organisation can reengineer its business processes and thus confers a long-term, strategic and comparative advantage upon such an adopter. The potential for sustained competitive advantage to be derived from EDI arises from its integration with the organisational structure of its implementor, depending upon the implementing organisation's ability to redesign its business processes appropriately. This paper examines the case of (arguably) the most sophisticated EDI-using company in Australia, BHP Steel, demonstrating the advantages obtainable by an organisation using EDI as a foundation for its reengineered organisational structure and business processes and concludes that: • there are real benefits to be obtained from an inter organisational electronic trading strategy founded on EDI as the enabling mechanism - benefits which are considerably more extensive than EDI's comparatively simple technical nature would appear to offer; • organisational gateways utilising an Application Generic approach to system integration and isolating the communications issue by insisting on the use of international data communications standards do offer a realistic and successful solution to the problem of internal and external trade for large and sophisticated organisations; • the majority of these achievements would have been either unlikely or totally impossible without BHP Steel's commitment to organisation-wide Business Process Redesign.