Electronic Data Interchange

Electronic Data Interchange (EDI) is the concept of businesses electronically communicating information that was traditionally communicated on paper, such as purchase orders and invoices. Technical standards for EDI exist to facilitate parties transacting such instruments without having to make special arrangements.

EDI has existed at least since the early 70s, and there are many EDI standards (including X12, EDIFACT, ODETTE, etc.), some of which address the needs of specific industries or regions. It also refers specifically to a family of standards. In 1996, the National Institute of Standards and Technology defined electronic data interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media."

History

EDI has been in use across many industries, including retail, banking, manufacturing, high-tech, and services. It has proven to be the best way for trading partner communities to exchange business documents. This has led to a variety of EDI standards being developed.

Standards

There are various EDI standards in use today, including ANSI, EDIFACT, TRADACOMS and ebXML. And, for each standard there are many different versions, e.g., ANSI 5010 or EDIFACT version D12, Release A. When two businesses decide to exchange EDI documents, they must agree on the specific EDI standard and version.

Benefits

The benefits of EDI are extensive and largely have to do with efficiency and speed. EDI can be viewed as a 'paperless' work environment – it minimizes the handling of paper documents and manual typing, reducing the chance of human error.

See Also

• Electronic Business
• Electronic Commerce
• Health Level 7
• X12 EDIFACT
• ANSI ASC X12

References

Electronic Data Interchange Resources
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