re available in tax preparation software, which can be downloaded off the Internet or purchased by retail. The forms are filled out directly on a PC then transmitted to another computer, which acts as a midpoint to the IRS. The IRS receives your forms and can issue a refund without ever having to reprocess the data. By using this method you save yourself and the IRS time and money (Campbell, 28).How EDI WorksTable came from Information Technology for Management by Turban, McLean and Wetherbe page 244.Information, such as purchase orders for medical supplies, flows from the hospital's information system into an EDI station, which consist of a PC, an EDI translator and a modem. From there, the information moves to a VAN (Value Added Network). The Van transfers the formatted information to the vendor, where the vendor side EDI translator converts it to a desired format (Turban, 244). An EDI translator does the conversion of data into standard format. An example of such formatting is shown below.Table came from Information Technology for Management by Turban, McLean and Wetherbe page 243."An average hospital generates about 15,000 purchase orders each year at a processing cost of about $70 per order. The health Industry Business Communication Council estimates that EDI can reduce this cost to $4 per order, potential yearly savings of $840,000 per hospital. The required investment ranges between $8,000 and $15,000. This includes the purchase of a PC with an EDI translator, a modem, and a link to the mainframe-based information system. The hospital can have two or three ordering points. These are connected to a value-added network (VAN), which connects the hospitals to its suppliers. (See figure on previous page) The system can also connect to other hospitals, or to centralized joint purchasing agencies." (Turban, 244).Benefits of EDIThere are numerous benefits associated with the adoption of EDI. Probably the most important and ...
