Progress in the Use of EDI
in the Australian Federal Government
As Revealed by Longitudinal Research

Roger Clarke
Department of Commerce
Australian National University

Version of 8 April 1994

Published in the EDI World Institute Bulletin

© Australian National University, 1989-94


Are government agencies as aware as corporations that EDI can make significant contributions to the achievement of organisational objectives? If they are aware, are they actively applying the technology to their needs? These were key questions which motivated a five-year research project conducted in Australia.

The Australian federal government comprises about 150 agencies, which differ greatly in terms of the kinds of functions they perform, their size and their degree of dispersion. There are a dozen large, multi-function agencies with very high transaction volumes, a score of other large and medium-sized agencies, and over one hundred small, single-function agencies. In addition, the sector comprises a dozen large government business enterprises and several small government enterprises.

Questionnaires were mailed to selected officers in about 150 agencies in late 1989, 1991 and 1993. The effective response rates from the surveys varied between 47% and 56%, which is very high considering the length of the document, and the depth of the information sought. Moreover, the quality of responses was high.

Mail surveys can produce relatively representative information, but at a fairly superficial level. This is especially so in cases like this, where respondents differ greatly in terms of their size and their experience with the technology. To provide deeper understanding of the issues, each cycle also involved structured interviews with a small sample of respondents, and several detailed case studies. This article provides a necessarily very brief summary of a few of the outcomes.


Steady progress has been made during the five years. In 1989, only 4 of the 74 respondent agencies identified themselves as users of EDI systems in the conventional sense of the term. But few respondents had any doubts that usage would grow dramatically in the following few years, in terms of both the volumes processed by existing schemes, and the number of applications.

Two years later, 28 of the 94 respondent agencies stated that they were currently operating an EDI system. About half of these systems, however, would not have been classified as EDI if a narrow interpretation of the term were applied; for example, only 15 agencies nominated a recognised network services provider. There was therefore a significant increase in EDI's penetration between 1989 and 1991.

EDI is frequently thought of in relation to the procurement cycle (including quotation, purchasing, delivery, invoicing and settlement). In the government sector, however, it is especially important to keep in view the more general definition of EDI: the electronic transmission of structured business transactions. In addition to purchasing, selling and paying, government agencies exchange many structured documents with other agencies, at federal and state levels, and with corporations and even individuals. The greatest volume of EDI transactions in Australian federal agencies is currently in the areas of taxation returns and customs-related documentation; and short-term growth areas are in company registration documents and health insurance claims.

In 1993, 17 of the 95 respondent agencies declared their participation in EDI schemes, on average two schemes per respondent. Three kinds of schemes were distinguished, and the table below lists respondents under each class. Several agencies are included, identified by an asterisk, which were not respondents to the survey, but were known to be using EDI.

EDI Usage in Late 1993

The 1993 survey showed that there has been disappointingly little progress during the last two years, with only a small number of genuinely new schemes having been launched and only a few new participants won over to existing schemes. It would be an exaggeration to say that the penetration of EDI has stalled, because there are signs of progress; but the take-up rate is inadequate given the size of the benefits available. Steps are being taken by various agencies to address this unsatisfactory situation.

There is a lesson to be learned about the diffusion of EDI from the survey's findings concerning electronic mail. Email is a technology which has been available for 10-15 years, yet by late 1993 only 73% of respondent agencies had installed it, and over 20% of those only during the last two years. Moreover only 40% of respondent agencies had email connection to other organisations, and fully half of those had commenced only during the last two years. EDI is an altogether more complex challenge than email, but at the same time one which offers much greater potential benefits, and therefore justifies much more vigorous encouragement by executives.

Among EDI-using agencies, the most significant reasons given for using EDI have consistently been the organisation's own productivity and effectiveness. Benefits for the organisation's clients also looms large, however. Government policy appears to be becoming a stronger factor, particularly in relation to EDI schemes with other Commonwealth agencies. Pressure from suppliers and clients has increased as well. Most agencies appear to appreciate that efficiency gains from EDI are not automatic nor necessarily even possible in the short term, but that non-financial gains can be made, and that some of the gains are likely to accrue outside the agency.

In 1993, seven agencies stated that they used EDIFACT standard messages, five nominated ASC X12 (all in the purchasing area), five nominated other standards (particularly in air transport), and eight stated that they used industry or proprietary standards. The adoption of the Government Open Systems Interconnection Profile (GOSIP) has led to a tendency towards EDIFACT, although X12 will clearly continue to be used in some areas of purchasing.

Five different EDI network services providers (NSPs) were nominated by respondents, with Telecom Australia's VAN operation holding the largest share (about half of the respondents, but a much lower share of volume). There were many cases in which the agency's business partners do not use the same NSP, highlighting the critical importance of not only inter-connectivity, but also inter-operability.

Among user agencies, the major constraints nominated as preventing faster volume-growth were:

Among non-users, the dominant reasons for non-use were: In all three surveys, significant numbers of agencies declared their intentions to implement EDI schemes (and, indeed, a reasonable proportion of the intentions, particularly from 1989, have borne fruit). In the 1993 survey, it is noteworthy, however, that a significant proportion of the purchasing schemes are scheduled 'within 2 years' from the date of response, whereas those classified as 'inter-agency' and 'other' are evenly spread between 'within 1 year' and 'within 2 years'. This appears to reflect the ongoing shortage of suppliers who are EDI-capable, and the continuing inadequacies in inter-operability between EDI NSPs.

A number of important measures appear to be needed to overcome the inhibiting factors. These are:

Meanwhile, the focus is moving beyond EDI alone, to encompass complete electronic business support systems for the particular needs of specific industry segments and sectors. This is most easily described in the purchasing area, where the focus is increasingly on electronic trading as a whole, including wide-area access to directories of suppliers and supplier catalogues, tendering for custom goods and services, and on-line spot-markets for commoditised goods and services, as well as EDI and email support for purchasing, logistics, settlement and reporting.


This research was conducted as part of the Australian National University's Research Programme in Supra-Organisational Systems, and enjoyed considerable support from the federal government's purchasing policy arm, Purchasing Australia, and from the primary vehicle for coordination among government agencies, the Information Exchange Steering Committee.

The Programme's activities are largely self-funding, and copies of the full survey reports are accordingly not distributed gratis, but offered for sale. Copies of short articles are available on request from the author.

Survey Reports

Clarke R.A., Pedler M., Swatman P.M.C. & Campbell P.C. (1990) 'Commonwealth Government Practices and Intentions Relating to EFTS, EFT/POS and EDI: Survey Report' 100pp., Department of Commerce, Australian National University September 1990
Clarke R.A., Campbell P.C. & Maguire D. (1992) 'Survey of Purchasing-Related EDI in Government' Report for the Information Exchange Steering Committee, and the Departments of Finance and Administrative Services, Canberra (May 1992)
Clarke R.A., Campbell P.J. & Telfer S.G. (1992) 'EDI: The Practices and Intentions of Agencies of the Commonwealth Government: 2nd Survey Report, 1991/92' 140pp., Department of Commerce, Australian National University September 1992
Clarke R.A. & Jeffery K. (1994) 'EDI: The Practices and Intentions of Agencies of the Commonwealth Government: 3rd Survey Report, 1993/94' 100pp., Department of Commerce, Australian National University Forthcoming, June 1994

Short Articles

Clarke R.A. (1993) 'EDI in Australian Government Agencies: A Research Report' Proc. 3rd World Congress of EDI Users, Gold Coast, Australia, March 1993
Clarke R.A. (1994) 'Progress in the Implementation of EDI in Australian Government Agencies' Proc. 4th World Congress of EDI Users, Brighton, UK. Forthcoming, June 1994


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Last Amended: 14 October 1995

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