EDI Basics: Your Questions Answered!

EDI Basics: Your Questions Answered!

Thursday, March 17, 2016Kelly Nelson

What is EDI or Electronic Data Interchange?

Electronic Data Interchange, or EDI, has been in use for decades - as early as the late 1960s. While there are many ways to perform EDI, there are preferred ways to implement EDI in a company. Your EDI solution should be driven by your company's business needs, not a specific technology.

In its most basic form, EDI is a computer to computer exchange, between two companies, of standard business documents in electronic format. There are two key elements in basic EDI. First, electronic documents replace paper based ones. Second, the exchange of documents takes place in a standardised format. Using these two basic concepts, any business can enter the world of EDI and begin taking advantage of the speed and economy of electronic commerce.

Why have I been asked to do EDI?

Electronic data interchange is one of the most efficient methods for transferring documents and data businesses.  An organization will often begin using EDI at the request of one of their customers or supplier (or as referred to in the EDI world, a trading partner). Usually it is because your trading partner has chosen to use EDI as their primary method of exchanging pertinent business information.

Who typically uses EDI?

EDI is used in all major industries, such as healthcare, retail, manufacturing, finance etc.

Is implementing EDI difficult?

The complexity in implementing EDI depends on the type of software solution that your company chooses to employ. It can be as simple as filling in forms on a web interface hosted by your customer. This is often called web forms EDI.  Integrated EDI is more complex, and requires the implementation of EDI Software known as Translator to enable document integration with an ERP or accounting system.

Which type of EDI solution is best for my business?

Using web forms EDI leaves a lot more room for error in the sense that there is still a manual portion of the process. With an EDI Software solution, however, documents can be exchanged directly between your EDI Software and your trading partners. This result in a much more timely and accurate flow of business data.

Is EDI a dying technology?

Although the principles of EDI have been around for over 30 years, we can assure you it is still active and very applicable to today’s growing businesses. It is a mature technology, but is always adapting the new technology standards in today’s world (i.e. the Internet).
 
Did we miss an important question? Ask us in the comments below, and don’t hesitate to contact us regarding your EDI requirements, we have a team that’s always around to answer your questions!