August 6th, 2020
A digital document is a readable document that is paperless in its original form. An example of this is an invoice that is received as a PDF via email. As either the sender or the receiver, you can easily interpret the data included in the document (e.g., line items). This makes it fairly easy to then enter this information into your organization’s ERP or other system simply by looking at it.
Digital documents are very similar to paper documents. Although a digital document can only be viewed on an electronic device, it pretty much looks the same as it would on a piece of paper. Because of this, even when a company receives a digital document, it’s common for it to be printed.
Putting the digital document on paper is often how documents are transferred internally. For instance, moving an invoice from operations to accounting. This often results in a room full of filing cabinets, which isn’t ideal for records management.
What Is an Electronic Document?
Unlike a digital document, an electronic document is pure data. This makes it difficult for the untrained eye to interpret. That’s primarily because a document in an electronic form is meant to be understood by a computer. In other words, electronic data is meant to be transferred from one system to another without human intervention.
With an electronic document, all data is automatically available in the appropriate systems (internal and external) as soon as it has been sent or received. There’s no need to waste time and resources on printing. All of that being said, true electronic document exchange can only be realized when you have an EDI solution.
If your company doesn’t have an EDI solution or some sort of electronic document management system, you’re almost certainly exchanging digital documents as opposed to electronic files. In that case, you’re no stranger to passing paper documents around the office and monotonously typing digital document data into one or more business applications so that everything can be processed accordingly.
The Link Between Digital and Electronic
Despite major differences, it’s no surprise that many of us use the terms digital and electronic interchangeably when referring to document exchange. Industry jargon is partially to blame.
For example, TIE Kinetix is committed to helping businesses achieve 100% supply chain digitalization. Considering the many advantages of electronic documents when compared with digital documents, a dedication to digitalization doesn’t make much sense. After all, we sell EDI solutions which ultimately enable electronic document exchange.
As great as it would be to say that we help companies to reach a fully electronic supply chain, we can’t say that for one major reason. The reason being, every business has a different level of digital maturity. Supply chains are becoming increasingly complex. Any single business typically relies on a large number of trading partners of all sizes and varying technical capabilities.
Put simply, not everyone has an EDI solution. It’s not realistic to assume that everyone is willing to invest in one.
Achieving 100% Supply Chain Digitalization
To overcome this hurdle and ensure that digitally advanced companies aren’t hindered by smaller trading partners, there has to be a solution for everyone. Recently, this has become even more necessary as many retailers and distributors require their trading partners to send invoices and other business documents electronically.
As mentioned above, it’s not realistic to expect all trading partners to invest in an EDI solution. However, that doesn’t mean that electronic document exchange is out of the question. A digital document can easily be converted into an electronic document. That’s why, for over 30 years, TIE Kinetix has helped businesses to achieve 100% supply chain digitalization.
Electronic Format vs. Digital Format
In a digital supply chain, it’s a blurred line when it comes to electronic format vs. digital format. That’s because while one company might want to receive all of their documents in an electronic format (i.e., in accordance with the EDIFACT standard), any number of their trading partners might not be capable of sending or receiving EDIFACT documents. There’s a high chance that these trading partners prefer to rely on PDFs or manual entry into a web-based portal.
For technically advanced companies—those that already have an EDI solution and are looking to further optimize supply chain operations—a digital supply chain is the logical next step. That’s because in order for any one company to send and receive all documents in an electronic format, they have to consider the trading partners that still rely on digital and paper documents. Meaning, they need to offer these trading partners a solution that’s easy to adopt.
Under-the-Radar Document Management
The solutions for small and mid-size trading partners that are required to send their documents in an electronic format are just that—easy to adopt. As previously mentioned, a digital document can easily be converted into an electronic document. These trading partners can keep sending PDF invoices if they want to. With the right solution, you won’t know the difference. The PDFs will automatically be converted to the appropriate electronic document format via a secure application, and you’ll have immediate access to the data from your ERP, accounting system, or elsewhere.
Alternatively, small and mid-size trading partners can manually enter invoice data into a web-based portal. Once again, you won’t know the difference. It’ll be as if you’re receiving all of your documents in an electronic format from the get-go. In reality, you’ll only be reaping the benefits of a digital supply chain.