What is EDI?
EDI, also known as Electronic Data Interchange, is computer-to-computer communications and transmission of business information in a standard, structured format.
EDI replaces old business processes such as email, mail or fax by creating an automated flow of business information between two separate entities.
EDI Streamlines Business Transactions
The order processing life cycle is shortened significantly by creating a link between systems of different entities. As seen below order processing with EDI minimizes data entry, reduces time and labor and eliminates re-keying errors.
Order Processing without EDI
Without EDI the manual order processing life cycle involves multiple steps such as entering in data, mailing, postage, faxing, email and re-entering data. The likelihood of errors, chargebacks and lost data and are significantly increased.
Order Processing with EDI
EDI virtually eliminates manual data entry allowing resources to be reallocated and increases productivity. EDI streamlines business processes for all parties involved.
The business document format looks like a standard purchase order for the end-user as seen in the example but this is actually EDI format ANSI X12. EDI allows for the automated flow of business information between organizations. The general process of EDI:
- Information will flow into and out of corresponding business systems.
- A common "language" among different computer systems and data format are translated.
- The translator will convert the data to another data format between trading partners that is understood by different systems used by organizations.