The American Department of Defence wants to be involved in a discussion of electronic communications scheduled this week in Bermuda.

The EDI seminar, sponsored by the Chamber of Commerce on Thursday and Friday at the Princess Hotel, is designed to show retail managers, insurance managers and any business operator how EDI (Electronic Data Interchange) could bring their costs down.

Defence Department officials, active in the type of encryption and decoding central to this technology, have sought permission to participate in the conference.

President of On Lines Custom Computer Services, Mr. Grenville Lines, said, "We don't know exactly why they want to be here for the conference. We're actually at a loss as to why they have so much interest in us. But we do know that some of the things we are trying to get going involves some sensitive stuff and it has required that we apply to the US State Department and the Defence Department to get permission to discuss it, such as encryption software.'' The seminar, Business Opportunities and EDI, comes after Chamber of Commerce president Mr. Bobby Rego urged retailers to look at ways of reducing costs.

The conference, with a focus on management issues, is being touted as a way that costs can be reduced between 10 and 30 percent, and maybe more.

Mr. Lines said retailers are no longer competing with other retailers here, but with retailers in the US. He views the technology as important to small businesses, as well.

Mr. Lines said, "Ordering stocks for inventory with EDI, the system can create the purchase orders for the stocks and send out the orders. It can cut down time and labour and reduce costs in other ways.'' "Trimingham's just ordered all of its new stock without having people writing out by hand and faxing things. It's been done electronically. It saves time clerically. You don't have to pay the long distance charges.

"And overseas there are cost reductions because companies will tell you that if you order through EDI, then they will give you a reduction in price, because the conventional method of ordering will mean more work for their staff and they have to charge you a processing fee.'' Insurance firms are also expected to have some interest in the technology and Mr. Lines said that people in a number of industries will see the benefits.

"For larger companies, they can't just call up and say they want EDI.

Management has to change its way of thinking and they have to re-design the way they are doing business to handle the technology.

"They have to determine how it affects the way they do business, re-engineer their whole business to save money, getting rid of dead weight, so to speak.'' "You cannot do business with a lot of big companies now without using EDI.

You can't deal with Sears or K-Mart or even Lloyds of London, without using EDI.

"If the Bermuda Government was to install EDI in the Customs department, it would save them a lot of money and pre-clear Customs goods. By the time you went down to pick up your goods all the paperwork would be done, it would all be paid for and it would be ready for you to pick up.'' Mr. Lines said that there are also applications for pay-roll and a host of other matters from insurance claims to home shopping.