How Important is Data Quality for Evaluating the Impact of EDI on Global Supply Chains?

In practice a growing number of companies report negative impacts of using EDI, which are attributed to the impact of poor data quality. This result is in contrast with current EDI theory, which shows that EDI leads to less data entry errors and hence to a positive role of data quality in EDI. Based on the current literature on data quality and communication, this paper develops a theory on the role of data quality in an EDI enabled business process. The theory hypothesizes that EDI has a positive effect on the reliability and relevance of the EDI information. However, EDI has a negative impact on the context of the EDI information. This means that EDI requires a higher degree of context alignment between the sender and receiver of the EDI messages. If this higher degree of context data quality is not established, EDI will lead to a negative impact on process performance, because the poor data quality in the context leads to more errors or more prevention in the ordering process.