Electronic Data Interchange (EDI)

Wednesday, March 11, 2009

During my career in IT, apart from Project Management, I had worked on technical/functional side of ERP, Datawarehousing and also on EDI. 'EDI' was quite challenging, primarily because I underwent training and put on a client facing production support project the very next day.

Since I have now moved away from EDI, I made an attempt to recollect what EDI is all about, which might be useful for a layman to know whatEDI mean.

So Whats EDI?.
It stands for Electronic Data Interchange.

Ok....What does it mean?.
Computer to computer exchange of standard format business documents like PO, Customer invoice, Vendor invoice exchanged automatically between systems of legal company (called 'trading partner' in EDI terms).

How does this happen or What are the components involved?
Please refer the below pic representation

What are the Benefits of having EDI?

EDI is the paper less exchange of business documents, such as invoices and purchase orders.
  • EDI documents contain the same information as paper documents, but they are formatted in an EDI Standard format.
  • With EDI translation \ router software you can transmit a document from an application on your computer to an application on another company’s computer with little or 'Nil' manual intervention unless there is a some form of failure at the touch points.
  • You send and receive EDI documents over a communications line like VAN. You can also use a tape, diskette or e-mail to exchange EDI documents with your trading partners.
  • Are there any EDI standards:
    X12 and EDIFACT are the two most commonly used document Standards in the US and Europe today.The ANSI and ISO committees release new versions of X12 and EDIFACT Standards about once a year, thus there are multiple versions of most Standards in use.

    Though EDI is quite old, still many companies in many sectors (manufacturng, retail, banking etc) are still using them for their benefits listed. In the last few years, they has been in increased usable of XML instead of EDI but still a long way to go before EDI geting replaced by XML.

    Further extension from XML is SOA (Service Oriented Architecture) which uses BPEL (Business Process Execution Language).

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