Electronic data interchange (EDI) is the communication of business using standardized documentation. The information within EDI moves directly from one application to another (intercompany). EDI standards allow for an EDI document to be precise and structured, which eliminates the need for manually intervention to modify data content. This automated capability enables information to be shared rapidly, providing organizations to be lean and efficient with IT operations.
All EDI transactions are defined by industry standard EDI message structure and standards. It is important to operate the EDI processes with good governance processes for inbound and native data the business owns or inherits. Data management is essential for the EDI processes to be accurately executed.
Benefits of EDI
Many organizations depend on EDI, a global, foundational B2B technology. It has gained mainstream adoption throughout businesses worldwide as the preferred means to exchange documents in the B2B transaction process.
As an automation technology, EDI delivers core business benefits:
- Cost and Time Saving: EDI allows for an organization to automate a process, previously manually executed with paper documents or other proprietary methods.
- Increased Productivity: More business documents, transaction sets are processed and exchanged in less time.
- Error Reduction: EDI’s rigid standardization ensures that data and files are correctly formatted and constructed before it enters business processes or applications.
- Improves Reporting: EDI, being an electronic document, can be integrated with a range of IT systems to compliment data collection, visibility, analytics and reporting.