Electronic Data Interchange (EDI)

Introduction

EDI refers to electronic transmission of structured information/data between companies. The transmission  is carried out from one computer systems to another via an agreed standard or standard format using networks, such as VANs or the Internet.

Key Characteristics of EDI

Electronic Transfer
EDI provides an exchange of information between computer application. This information is meant to processed by the computers without human intervention, although this characteristic is not present in all situations. The absence of human intervention is possible only if the computerized applications are integrated into the EDI system.

Between Application
EDI allows exchange of information between organisations by their respective computerised business application, for example, a sales invoice, in different location.

Standard Format
EDI transfer information in a standard format. All information has to be structured, assembled in a way that is recognised by both computer. The information need to be in a standard format so that the applications can be appropriately programmed to process the information. Codes are extensively used for that reason. The formats of EDI information are greed between trading partners, who can determine their own formats or choose from formats generated by various industries, national or international standard organisation.

In short :

EDI simply is the exchange of information/data between an application running on a computer system in one organisation to another application running on another computer system in another organisation. Since the information/data in the EDI document are already in a common electronic format that is understood by computer applications, it is possible for a computer system to do processing immediately.

Web - EDI

More and more, firms are adopting EDI to facilitate their online transactions with customers and suppliers. Web-EDI on Internet represents the most recent hybrid solution proposed to companies. The ability to exchange EDI transactions with trading partners over the web or internet and avoid costly VAN charges per transaction. There is no software to download, install, and support and no "data mapping" to be accomplished. By subscribing to this type of service, a small business uses its navigation software to access the Web-EDI server message centre. In order to send a document, a service user need only to select the partner, choose the appropriate form and complete it. The Web-EDI server receives the data and transforms these into EDI format to then forward these to the other business partner. Web-EDI allows companies to fully focus on their core business rather than EDI issues.