EDI – Electronic data interchange

The abbreviation EDI stands for electronic data interchange. In other words, it is about the electronic exchange of data. EDI is primarily used in the exchange and transmission of electronic business documents. And wherever something is sent and received, it is necessarily standardized, that is it occurs following specific rules. Only in this way can you assume that what is sent will also be received.

EDI does not describe a specific standard, but rather the term includes very general standards for the structured exchange of electronic data. Companies which use these EDI standards exchange their data directly between application systems; the data do not have to be converted. This avoids errors arising from manual recording as well as duplication of documents.

The potential of electronic data interchange thus lies in the speed with which the data are transmitted and in the exclusion of human error during data processing. Business processes make the most sense in EDI through digitization.

Electronic data interchange – practical format examples

There are a variety of national and international standards for the exchange of business documents via EDI. Some of these standards are more industry-specific EDI formats, while others are cross-industry formats. The following are two examples of very common EDI formats:

  • ANSI ASC X12 (American National Standards Institute Accredited Standards Committee X12): This format is the data transmission standard in the area of electronic data interchange (EDI) which is primarily used in the USA.
  • UN/EDIFACT (United Nations Electronic Data Interchange for Administration, Commerce and Transport) is the cross-industry international standard for the format of electronic data in commerce. The UN agency CEFACT is responsible for the EDIFACT standard. This format is used primarily outside of the USA.

Sale invoices, bills of lading, orders, shipping notices, account statements, draft specification and insurance claims are just some of the things which can be transmitted using EDI formats.