Rotary Encoder Interfacing with PIC Mirocontroller

i am currently working with some power supply design and i can say using conventional pots(potentiometer)  and rotary  switch  to adjust the voltage and other stuff is quite old school. so i have decided to go for a bit high tech , actually bit digital.

so here is the solution

first of all i would like to tell you , these type of rotary encoder is totally digital component so you can’t directly replace these  with you conventional pots. so lets start what are Incremental Rotary Encoder , Incremental rotary encoders by the looks of it just like a general purpose pot looks like but output is quite different they  provide a pair of digital signals that allow a microcontroller to determine the direction of a shaft’s rotation. They can be used to monitor motors and mechanisms, or to provide a control-knob user interface.