What is EDI (Electronic Data Interchange)?

EDI generates cost savings: Having the appropriate EDI data interchange solution in place can allow companies of any size to execute workflows and processes that can significantly reduce costs. There are many expenses that are associated with the manual processing of documents that include printing, faxing, mailing, postage, etc. All these expenses can be eliminated by an electronic data interchange process that allows for an easy automated flow of business information between organizations. An efficient process such as this can aid in avoiding chargebacks, delays, lost orders, and other performance inhibitors.

EDI increases speed: Another inherent benefit associated with EDI for data interchange is a dramatic increase in speed to the procurement cycle. EDI documents, for example, the most commonly used, EDI 850 Purchase Order, EDI 855 Purchase Order Acknowledgement, EDI 856 Advance Ship Notice, and EDI 810 Invoice, are electronically transmitted between organizations, enhancing supply chain, order purchasing, and invoice sending processes. An EDI order allows for a much quicker process compared to a manual order process from one party to another. Businesses that adopt EDI can expect to reduce the order to ship time by over 50%. Having an efficient and speedy supply chain is essential for competing with other companies.

EDI allows for order accuracy: One of the biggest downfalls of manual processing for data interchange is error-prone data entry. Inaccurate data cost companies time and money in addition to possible delayed or lost orders. EDI streamlines the procurement process and allows for data accuracy eliminating the need to re-key information. Having this level of accuracy allows companies to focus resources elsewhere, while increasing effeciency in data interchange processes like order purchasing or invoice sending.

EDI creates efficiency: The combination of EDI benefits such as speed and data accuracy, resulting in greater business efficiency where companies can streamline their day-to-day processes, simplify operations, and not have to worry about error-prone data, reduce lead time, eliminate chargebacks, delays, or lost orders. EDI is useful for an effective and efficient supply chain management with the quick and accurate exchange of business information resulting in a shortened procurement cycle, faster ship time, cost savings, and other processes like order purchasing or advance shipment notices. Companies can also expect to see improved communication and relationships with partners.

EDI ensures information security: One of the biggest concerns with technology is the security of information. Fortunately for companies, having the right EDI solution provides data security. EDI solutions by design are meant to completely secure. Some security features of EDI include archive tracking and audit trail capabilities. This secure network provides companies the ability to easily exchange data internally with security protocols and standards in place.

EDI enhances strategic decision-making: The goal of any business is to continually grow. To accomplish this companies must utilize their time and resources to the best of their abilities. With the right EDI solution in place, companies can shift focus from daily tasks that can be automated and improved to make more strategic decisions that will directly correlate to business growth and expansion.