Product List

EDI - Electronic Data Interchange

section iconFrequently Asked Questions

What EDI is?

  • Electronic data interchange (EDI): is the inter company computer-to-computer communication of data which replaces the function of a standard business document and is transmitted in a standard data format.
  • Inter Company.  EDI refers to the electronic transmission of data between companies.
  • Computer-to-computer: Transmission files are machine readable.  They are generated by an application program of the sender and interpreted by an application program of the receiver.
  • Standard Business Document:  EDI is not free form electronic mail. EDI is used to transmit formatted data that would otherwise be maintained and transferred in a printed standard business document such as a freight bill or bill of lading.

What EDI isn't?

Electronic data interchange should not be confused with other levels of electronic data communication services. For example, EDI is not:

  • Dial-Up Tracing.
  • Dial-Up Shipment Status
  • Dial-Up Rating Inquiries
  • Internal Customized Programs
  • Proprietary Formats
  • Time-Sharing
  • Electronic Mail
  • Voice-Response Systems
  • Web Site Tracing

These communication services are not completely paperless in either computer language or industry standard message formats.  In addition they may require human intervention.

Why Use EDI?

EDI should be of interest to all business managers because it offers a means of minimizing burdensome clerical functions.  EDI replaces paperwork through electronic data processing and communications.  Advances in electronic technology can be applied to increase clerical productivity and decrease clerical costs.  As long as data once entered into the electronic system is not removed from that system, the costly delays and errors associated with re-transcriptions and re-entries can be avoided.  EDI provides for the computer-to-computer exchange of data at electronic speeds; it also subjects that data to programmed controls of consistency and accuracy.

Some of the specific advantages that have been identified by the companies already involved in EDI are listed below:

  • Reduces paperwork.
  • Reduces telephone calls.
  • Reduces manual data entry.
  • Improves data accuracy.
  • Increases speed of communications.
  • Improves customer service.
  • Reduces postage and handling cost.