When computers exchange business information electronically, they must do so in a format that both the receiving and sending station will recognize. For that reason EDI requires the use of standards--an agreed upon set of customs that tells users how their electronic data should be structured. ANSI X12 is the set of standards used in the United States for EDI. The ANSI ASC X12 committee defines these standards and publishes the latest release and standards version. A transaction set is the electronic equivalent of a paper business document like a purchase order, sales catalog, invoice, etc.

Since an EDI transaction is really just the electronic transmission of a business document, transaction sets that are prepared in accordance with an ANSI X12 standard, must be defined for every major business document. The ANSI X12 standard defines over two hundred transaction sets. Each transaction set is assigned a name and number for reference in the ANSI ACS X12 EDI environment. It is also given version release reference number. For example a purchase order sent by the DoD to a trading partner would be an ANSI X12 standard version 3010 transaction set # 850. Each of these designations is important to note. While standards allow much compatibility between users, the correct version release and transaction sets must be used to ensure connectivity.

Transaction sets support many different business areas: communications and controls, product data, finance, Government, materials management, transportation, purchasing, distribution and warehousing. To view a complete list of all ANSI X12 transaction sets visit: www.acq.osd.mil/ec/newhandbook/appendixa/appendixa.htm

DoD does not utilize all the existing transaction sets to do business with its trading partners. The following fourteen ANSI X12 transaction sets supporting procurement are being phased in:

840 Request For Quotation
997 Functional Acknowledgment
843 Response To Request For Quotation
832 Price/Sales Catalog
850 Purchase Order
855 Purchase Order Acknowledgment
824 Application Advice
860 Purchase Order Change
836 Contract Award Summary
865 Purchase Order Change Acknowledgment
838 Trading Partner Profile
869 Order Status Inquiry
864 Text Message
870 Order Status Report

If a transaction set is the electronic equivalent of a paper document, a functional group is a set of related documents. For example transaction set #135--student loan application, #139--student loan guarantee result, and #144--student loan transfer and status report would all fall under the same functional group. But the methodical grouping of transaction sets does not end there. Like any language, the language of ANSI X12 standards has many different levels. Functional groups are the phrases or sentences. Transaction sets are the "words." These words are constructed of even more detailed subsets known as data segments and data elements. You will notice a hierarchical relationship developing.

Each transaction set contains data segments and data elements. Data elements are the smallest set of data contained in a transaction set. It could include basic information like price, size or product code. Just as a functional group contains logically related transaction sets, a data segment consists of logically related data elements. By definition, a data segment must begin with a segment identifier followed by one or more data elements and ending with a segment terminator.