Tag: software

Electronic Data Interchange Standards

Electronic Data Interchange Standards

It is a known fact that the electronic data interchange (EDI) has existed for over 30 years, but many companies have not yet taken advantage of its diverse benefits.

The presence or absence of appropriate EDI standards will be instrumental in determining your success or failure in electronic data interchange transactions. ANSI X12 is the most commonly accepted EDI standard in North America. EDIFACT has been adopted in rest of the other locations.

EDI compliance can be fulfilled by either outsourcing or buying the required components that typically include the following:

Communication software

VAN services


Translation and mapping software

Mapping labor

Software upgrades as needed

Ongoing testing with EDI partners

Specific electronic data interchange standards exist for a variety of unique documents that are required for EDI transactions. If you are in doubt, then it would be quite helpful if you can manage to work with an expert EDI outsourcing partner in order to ensure full compliance.

When you are ready to adopt EDI as a tool for operating your business more cost-effectively, here are three of the most viable business process candidates to consider first for EDI implementation:

Shipping and receiving

Invoicing and payment


The most logical choice among these three will depend on your immediate requirements.

The basic concepts of EDI

The basic concepts of EDI

EDI, an acronym for Electronic Data Interchange is about communicating with partners and vendors electronically. When people talk about paperless trading, they are referring to EDI. Placing and receiving the order, financial transactions are examples of EDI.

The actual definition of EDI is the interchange of structured data according to agreed message standards between computer systems, by electronic means. This means that regardless of the type of transaction, be it an order or an invoice, the structure of the data remains the same. This allows for seamless communication between multiple partners. This is maintained between different systems by following set standards.

EDI allows for massive reductions in losses due to human error. Different vendors with different systems will require repeated entry of the same data. This repeated entry of the same data is as high as 70%.

In addition to the operational benefits, EDI also enables some strategic benefits for the organization. The first is the flexibility to shift from one business process to another. For example, it becomes easy to shift to JIT for an organization that has implemented EDI. Second is the ability to quickly respond to changes in the market. Previously, any changes in orders would take days or even weeks. Now, if the order has not been fulfilled, a change can be requested within minutes.

For organizations involved with multiple trading partners, EDI is the only way to go. It presents a fast and secure method of processing transactions that make it well worth the time and cost of implementation.