EDI stands for electronic data interchange and is defined as computer-to-computer exchange of business information in a standard and structured format. Organizations are moving to electronic data interchange to streamline and improve operational efficiency of business processes and communications by exchanging data electronically.
Electronic data interchange allows for:
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Businesses adopt EDI to enhance efficiency, improve communication and accuracy of data exchanged, strengthen partnerships, and drive down costs. It eliminates the need to re-key information, reduces error-prone data entry and speeds up the process of exchanging business documents with customers and other trading partners. As seen in the following example, common transactions such as (EDI 850) Purchase Order and (EDI 810) Invoice, helps simplify and streamline the entire transaction process.
EDI optimizes workflow by replacing previous order processes such as mail, fax or email and electronically exchanges documents between two companies with different business systems. A translator will convert the business application data between the sender and receiver, such as trading partners. Trading partners is referred to two separate organizations, for example buyer and supplier or OEM and manufacturer. The order processing life cycle is shortened significantly.
EDI Document preparation: Generate the electronic file to be sent. Document preparation varies based on how each business generates the data, refer below to types of EDI software.
EDI Translation: With the use of an EDI solution, the data is translated to or from an EDI file in a standard and structured format. The common “language” among different computer systems and data format is translated into information that is understood by different business systems.
Transmitting EDI documents: Once the data has been translated to an EDI format, the document is ready to be transmitted to your trading partner. There are different methods of communication to send/receive data.
EDI Process Infographic: For Buyers & Suppliers
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The most common communication methods include:
Easily become EDI enabled and compliant with all your trading partners via WebEDI. As DataTrans adheres to trading partners’ specifications, users maintain compliance with their entire network. With a seamless sign up link, you will have an analyst working on your behalf, testing directly with your trading partners and setting a go-live date. Attend WebEDI training sessions to anticipate what to expect when you receive your first order.
DataTrans reliable cloud-based infrastructure provides maximum up-time so that your solution is always available to access. WebEDI requires no special software or computer knowledge. The only requirements to use WebEDI is to have access to the internet. Thus, you can become compliant quickly with minimal cost and very little training. DataTrans WebEDI allows users to manage all of their activity and transactions from one simple, easy to use webpage. If you can use email, you can use WebEDI.
What are EDI Standards?
ANSI ASC X12 is the official designation of the U.S. national standard body for the development and maintenance of EDI standards. The most widely used standard in the United States and much of North America.
EDIFACT, known as Electronic Data Interchange for Administration, Commerce and Transport, is the international standard developed under the United Nations. The EDIFACT standard provides messages which allow multi-country and multi-industry exchange.
HIPAA (Health Insurance Portability and Accountability Act) is a subset of X12 with healthcare specific requirements. Part of the HIPAA initiative seeks to establish standardized mechanisms for electronic data interchange, security, and confidentiality of all healthcare-related data.
Tradacoms is an EDI standard introduced and implemented for the UK retail sector. Tradacoms was introduced in the early 1980s and is maintained by the UK Article Numbering Association now known as GS1 UK.
Benefits of EDI
Labor minimizes data entry
Cost Savings eliminates expense of manual steps
Inventory reduces lead time on orders
Communication improves efficiency of communication and relationship with partners
Improve the order to cash cycle
Quicker exchange of business information
Accuracy eliminates errors and submission of inaccurate data
Efficiency integrated electronic data interchange makes the order processing more efficient and streamline
Types of EDI Software
EDI Outsourcing (also known as B2B outsourcing and EDI data management solutions), is designed to enable companies to communicate business data electronically. Outsourcing EDI allows your company to focus on your business while a team of specialists manage your EDI environment. A few outsourcing software options include: WebEDI, EDI VAN, Mobile EDI.
WebEDI (also known as Web EDI or web-based EDI), provides EDI communication through an internet browser. WebEDi is a simple, affordable, easy-to-use solution for companies to connect, manage documents and process transactions. Learn more about DataTrans WebEDI.
EDI VAN, value added network (VAN), is a third-party network provider that is solely responsible for routing, storing and delivering messages to and from the sender/receiver. Learn more about DataTrans VAN solutions.
Mobile EDI provides user access to WebEDI via mobile device with basic/limited functions like other software applications/mobile apps.
The benefits of EDI are fully realized when integrating with your business processes. Seamless integration with your ERP, WMS, MRP, EMR or TMS allows for a completely automated EDI environment. Our integrated solution is great for companies requiring a more robust, automated, cost-effective and fully integrated solution.