Electronic Data Interchange In B2B communications
Electronic Data Interchange is a technology that helps trading partners and organizations speed up supply process, logistics and eliminate manual errors by automating business-to-business (B2B) communications. EDI helps many organizations that produce, ship, purchase and sell goods or provide care, from retailers and manufacturers to logistics firms, airlines, healthcare providers, insurers and more.
EDI can replace manual B2B communications, such as postal mail, fax and email.
Documents flow directly from the sender’s computer application (e.g. a logistics system) to the receiver’s computer application (e.g., an order management system). Thousands of standard business transaction documents can be sent automatically using EDI. Some common examples include: purchase orders, invoices, shipping statuses, customs information, inventory documents and payment confirmations.
EDI documents are processed by computers and use standard, computer-friendly formats. Standards describe each piece of data and its format (e.g., type of document, parties involved, actions to take, mmddyy). Standards eliminate company-to-company variations, allowing each business partner’s computer system to speak a common language. There are a variety of EDI standards for various industries, regions and use cases — each with different versions, so EDI partners must use the same standard and version. Popular standards include: ANSI X12 in the U.S., UN/EDIFACT globally and industry-specific standards, such as HIPAA.
The exchange of EDI documents is typically between two different organizations, referred to as business partners or trading partners.
Secure And Standardized Connection
EDI uses a range of secure protocols to facilitate the secure exchange of EDI documents. Partners must use the same, agreed-upon protocol to exchange EDI files or work with an intermediary who can facilitate exchanges if the partners use different protocols. Some protocols require more EDI technology infrastructure than others, but EDI software, such as RSSBus Connect, now facilitates exchanges with minimal investment. The protocols range from long-established technologies, such as FTP, to web-based EDI via AS2, API-based systems, such as AS4, and other options, such as mobile EDI.