What is electronic data interchange

Electronic Data Interchange (EDI) is a method to transfer data across different computer systems or networks in order to track shipments, create invoices, and send orders to warehouses and more. By moving from a paper-based exchange of business record to electronic business records, organizations appreciate significant advantages, for example, decreased cost, expanded handling speed, lessened mistakes and enhanced associations with business partners.

Benefits of EDI

Cost Savings

EDI eliminates the cost of paper, printing, storage, filing, postage and document retrieval, while also cutting down the cost administration, resource and maintenance.

Speed

Time plays an important role when it comes to processing of orders. EDI enables speeding up business cycles because it allows for process automation that considerably reduces time delays associated with the manual processing that requires entering, filing and comparing data.

Accuracy

EDI radically maintains an organization’s data quality and eliminates the requirement to re-work orders by delivering a decrease in transactions with faults.

Business Efficiency

Organizations can benefit from increased levels of efficiency due to reduced human errors—which result in employees devoting their attention to more important value-added tasks. EDI can improve an organization’s clientele and partner connection management because of quicker delivery of goods and services.

Security

EDI shares data securely across a wide variety of communications, protocols and security standards thus, augmenting the security standard of its transactions.

Environment-friendly

The shift towards EDI promotes corporate social responsibility by reducing carbon emissions.

White Paper: What is Electronic Data Interchange?

Current Trends in Electronic Data Interchange (EDI)

Web Portals

Web portals are in trend because they are cheap, provide easy compliance and usually do not require IT department’s involvement. The issue with web portals is they are costly, slow, and cumbersome, and do not optimize the supply chain. All these drawbacks arise since they are not integrated with any other applications and with any volume they require a huge investment in data entry to complete tasks and supply chain optimization.

Non-VAN Communications

EDI was conventionally transacted through VANs (Value Added Networks). Then along came AS2 and point to point internet based communications. There is a huge descending price pressure on VAN services. This is further compounded by the fact that point to point communications over the internet are getting increasingly common, resulting in the demise of VAN.

Transaction Complexity is Increasing not Decreasing

The cost of setting up transaction flow in an organization takes longer and may require multiple data source, resulting in an augmented cost structure and complex decisions making within an organization.

Lack of Knowledge

As transaction intricacy augments, so does the amount of required knowledge about the retailer’s supply chain and the associated data. This puts tremendous pressure on the employees in a company to keep up with the speed of the vendor compliance manual or their partner’s procedures and practices. Unfortunately, lack of knowledge means organizations are not investing in keeping their infrastructure updated. This has to change because the world is getting more and more complex from a data perspective.

Future of EDI

EDI has undergone major improvements; organizations seldom catered to the needs of EDI integration across the entire suite of application and process those challenges. With the introduction of comprehensive integration solutions (CISs) organizations are now able to cater to the needs of EDI along with their application and process integration requirements via a single solution. In order to take a more integrated approach, application development and delivery professional must evaluate their EDI capabilities to provide a complete integration environment.