What is EDI ? - General Questions

EDI stands for Electronic Data Interchange. It is the general term for the standardized exchange of business documents such as orders, invoices, status messages, etc. from computer system to computer system. By using standards in the exchange of the information, the data can be read into internal systems quickly and automatically, reducing errors. B2B, XML, API are all building systems of EDI.
It is important to distinguish between EDI and data communication. EDI concerns the standardization of business information, while data communication is about the actual exchange of information from computer to computer.

In addition to the flow of goods within the supply chain, the flow of information and key documents is equally important. Almost every document used in the information flow within the supply chain can be exchanged via EDI. The most frequently exchanged messages include orders, invoices, status messages, dispatch advices, transport orders and status messages.

Companies can save time and costs by no longer having to retype data, thus avoiding errors. An optimal EDI connection will help improve customer service. Suppliers who use EDI have a stronger competitive position compared to peers who have not yet adopted EDI. Finally, the use of paper can be greatly reduced or even eliminated.

EDI can be used in all industries. We see that in some industries the use of EDI has been given an extra boost by standardization organizations, for example GS1 in retail and IATA in the air industry. Sometimes companies will also require their suppliers to engage in EDI. In addition, there are quite a few government agencies such as customs and port authorities that require declarations to be sent electronically via EDI.

Industries where there is a high EDI adoption rate include retail, eCommerce, manufacturing and distribution, logistics, etc.

An EDI service provider is a service provider that sells the software and tools to exchange EDI, but also offers additional EDI services such as mapping or translation services to get messages into the right formats; or archiving of the messages. In addition, the EDI service provider also provides the platform or network on used to exchange EDI messages and will monitor the smooth exchange of messages 24/7.

A good EDI service provider is more than just a technology provider. They will also provide support in the actual connection or integration of trading partners and trading relationships. The EDI provider should be seen as a reliable partner for bringing a community together and ensuring the smooth flow of data sharing processes within the community.

Organizations that embark on the journey towards digital transformation, opt for digital technologies to establish new or optimize existing business processes. Their aim is to comply with evolving business and market demands.

From trading partners going in for paperless procedures to advanced enterprises strategically leveraging Electronic Data Interchange, EDI lets businesses efficiently share electronic data. EDI is fast and reliable. It eliminates manual work, errors and double effort, freeing up employees’ time for more value-added tasks that benefit other areas of the business.

By streamlining commercial, B2B and logistics messaging, organizations gain insights into all aspects of their business and transactions. With the real-time data available to them, they not only increase their operational efficiency and save costs, but they also achieve the agility to respond instantly to changing supply chain requirements and customer expectations. As such, EDI seamlessly fits in with today’s 24/7 always-on economy. Additionally, Electronic Data Interchange provides a common business language that enables organizations to easily enter new markets and territories, onboarding new trading partners anywhere in the world.