EDI

What is EDI?

Electronic data interchange (EDI) is the exchange of electronic business documents in a rigorously structured format from one computer system to another with the intent to transact business in an automated fashion, with little or no human intervention.

The common misperception is that EDI encompasses the entire spectrum of the electronic data interchange paradigm: transmission, document flow, translation software, etc. EDI is actually limited to the scope of the standardized format of the electronic business documents being exchanged. EDI is very useful in standardizing business document exchange and automating processes around those documents, due to the rigorous standards in place, in the supply chain.

Benefits of EDI

EDI provides companies the opportunity to save money in the supply chain by replacing and/or augmenting information flows that typically require a high amount of human intervention traditionally. Even when used in conjunction with paper documents, EDI can greatly reduce the extent of human intervention in the form of manual entry, sorting, distributing, and searching paper documents required to conduct business. Other benefits include reduction in errors due to manual entry and speedier exchange of business documents, reducing cycle times greatly.