EDI – Electronic Data Interchange
EDI – the Electronic Data Interchange – is a modern method of communication between two independent entities, which involves an exchange of standard structured business and other documents (e.g. orders, delivery notes, invoices, etc.) in an electronic form.
Why EDI?
- Do you need to quickly, accurately and cheaply communicate with business partners?
- Do you need to transfer information quickly and accurately into your information system?
- Do you keep printing, copying and issuing invoices and starting to lose track of the documents?
There is an effective solution for you – electronic communication in a structured format (EDI).
Would you like detailed information about how EDI works? Download the white paper (detailed description) "How Does EDI Work?".
The development of exchange of business and logistics documents is shown in the simple infographics below.
What are the basics and principles of EDI?
Let's use a practical example of using EDI: An order made in an information system of a customer is automatically transferred into the information system of a supplier.
The example of ordering exactly captures the main idea of EDI. The customer made an order in their information system. The receipt exists in an electronic form. Why not allow suppliers to work directly with this electronic document? If you print the order from your system, send in an envelope, by fax or in a readable form via email, the counterpart has no other option than to manually transcribe it into their system. In case of transfer of an electronic document, however, it is possible to make the receipt of the order automatized.
Electronic exchange of documents is not only faster but also much cheaper
The aim of EDI is thus gradually replace paper documents with electronic documents and therefore, reduce costs associated with their exchange, and at the same time to enhance the efficiency and quality of realized processes. EDI documents have the same legal standing as ‘paper documents’. EDI can also be used to link various information systems both outside and within a company.
Common language of EDI
Up to date, many national and industry standards have been defined for EDI communication, such as ODETTE in the car industry or SWIFT in banking. However, these standards are mutually incompatible and therefore, a single international standard for electronic transfer has been created – UN/ EDIFACT.
Data security
The question of security of data transferred via EDI is addressed in a number of ways: by software solutions directly in EDI systems, by using cryptographic techniques (encryption keys, digital signature) for communication between different systems and ultimately also by implementing a digital signature and encryption directly into messages in the EDIFACT format.
More information is available on EDIZone portal, concerned with electronic communication: www.edizone.cz (czech)
