Bermuda companies to use Electronic Data Interchange (EDI) as a business tool.

That message came during a speech to Pembroke Rotary by Mr. Horst Finkbeiner, chairman of the EDI Council of Bermuda, a committee of the Chamber of Commerce.

He said that out of 300 local companies surveyed, one third said EDI was a part of their strategic planning for the upcoming year. A further 150 had it under consideration. But 50 local companies said they were not considering it.

The interested companies represented a cross section of the business community. They included those in the medical field, insurance, reinsurance, wholesalers, retailers, restaurateurs, grocers, shipping and the public sector.

Mr. Finkbeiner said Bermuda was part of a global marketplace, with local retailers competing for the Bermuda dollar against well known US firms.

"Wal-Mart, K-Mart and Toys-R-Us are more than just names,'' he said.

"They all use EDI to reduce their expenses and offer superior customer service. Toys-R-Us increased their invoice volume from 200,000 to 300,000 in one year without extra staff. Wal-Mart eliminated their warehousing requirements. Their point-of-sale and inventory systems keep the shelves stocked by making small daily stock orders.

"EDI is the backbone on which these companies have based their re-engineering efforts. That is the reason why you should care about EDI. Your overseas competitors are using it to compete on price, customer service and efficiency.

"If Bermuda wishes to compete for international business, it must provide the services these companies demand. And the competition is fierce. A quick look around the world shows a surprising number of countries and governments that have established EDI infrastructures or EDI initiatives; United States, Canada, Europe, Chile, Hong Kong, Africa, Singapore, Panama, Australia, Japan and others.

"The Cross-Border Payment Council has over 40 members. The United Nation's EDIFACT Council has representatives from some 45 countries. Bermuda is not on that list. Bermuda should care about EDI.

"The second reason you should care about EDI is what it can do for you.

Wherever you automate your routine business operations, you free up staff to do more productive things -- things like serving the customer and generating sales.

"This gives you a competitive edge. Even if all you do is reduce your overheads a little, you can make a significant impact on your company's profitability.

"At a recent conference I attended, a company with about $2 million in sales used EDI to reduce their cost sales by 0.5 percent and their fixed overheads by one percent. This small improvement resulted in a 33 percent increase in profit margin.'' Mr. Finkbeiner is the assistant manager for electronic banking at the Bank of Butterfield. Having been employed at the bank since 1990, Mr. Finkbeiner is responsible for the Bank's Fieldlink programme, standing orders and financial EDI departments.

Mr. Finkbeiner said: "We've all heard a lot about electronic commerce lately.

We've heard about the information superhighway. We've heard about Internet and we've all read about business re-engineering. We've heard how all this will change the way we do business, how it will change the face of competition forever.

"Some of what we hear is very futuristic and doesn't seem practical or even useful. But some of it is impacting you today. Some of these things have been around for two decades, are in common use and make a significant difference to those companies that use them. One of these is EDI.'' He told Rotarians that nearly everyone of them would be affected by EDI. He said that it was a business tool that is used to change the way people conduct routine business operations.

"It is a way to exchange business documents with your vendors, suppliers and other service providers. Simply put, your computer uses a well-defined, standard file to pass business information to your trade partners' computer.

"Because the information moves directly between computers, it eliminates, or significantly decreases, the amount of manual key entry that must be done. The end result is fewer mistakes, faster response and lower overheads.'' Mr. Horst Finkbeiner