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What is EDI

What is Electronic Data Interchange

When two business companies collaborate to work together, a lot of data exchange takes place.  Bills, invoices, payment documents, and shipping details are the most common data that are exchanged on a regular basis. These documents are obtained from various departments of an organisation. Each of these documents from different departments contains immense information that often needs to be shared. Exchanging such a huge volume of data takes a lot of time and effort to organised and send. This is when EDI comes handy to remove all the extra efforts and reduce the usage of papers. 

What is EDI?

Electronic Data Interchange (EDI) is an online based software, called as a service product, which collects all the data from the various departments and keeps it stored up to date in the cloud. It also handles system to system exchange in a standard electronic format of business documents, eliminating the usage of paper and human intervention. Business documents like purchase orders, invoices, payments, advance shipping notices are transferred electronically.

Why is EDI important?

Once in your lifetime, you have come across any documents which have few errors or which do not belong to your department. It is mainly because of the confusion happening by the workers while transferring the documents from one place to another. If this is the scenario every day, then your company can face some huge losses which you don’t want to happen. The main advantage of EDI is that it eliminates all the errors. Moreover, data transactions here are done online so it goes to the right person in the right department at the right time.    

What are the advantages of EDI?

Apart from reducing errors, EDI also has some more advantages. They are:

  • Savings in money and time: As EDI automates the process which was previously handled manually results in saving of time. There are no paper and fewer humans involved in EDI as compared to traditional methods which will result in the saving of money.
  • Improvement in efficiency and productivity: EDI is capable of sharing more and more documents in a less period of time. This results in the improvement of efficiency and productivity of the company.
  • Improvement in traceability and report: All the electronic data can be integrated with a wide range of IT systems. This will help to support data collecting and analysis.
  • Customer satisfaction: when all the transactions are done with perfection and within time, there is a point of customer satisfaction.
  • Fast response: As all the data is stored in one software itself, any kind of query can be sorted as we can access the data at fingertips.
  • Payments: not only data and documents, but even payments can also happen online in EDI. Customers can pay money through net banking and PayPal integrated with the EDI software.

What are the types of EDI?

There are many types of EDI which are enabling different transactions across the trading community. They are:

  • Direct EDI / Point to Point is also sometimes called Direct EDI, is used by many companies for many years. Some experts also suggest that this EDI type is the best alternative for VAN. Direct EDI as the name suggests, establishes a single and direct secured line between two business partners. This means that there can be thousands of separate connections between two companies for different departments.
  • EDI via value added network (VAN) is a majorly used EDI type. VAN is still preferred because of the vast services provided by the VAN. Here there will be a secured line between two companies where all the data transactions can be completed in one software connection. It provides services like a full mailbox, secured inspections, audit trails, ancillary services etc., which can be very useful for your business strategies.
  • AS2 EDI is one of the promising methods for any kind of data transactions, especially EDI transactions. This secured and reliable service involves two systems. They are a client and a server. It creates a feature called  “envelope” which is used for secured data transactions of EDI data under encryption and digital certificates method.
  • Web EDI is a simple and easy service where the EDI is conducted through the browser with the help of the internet. Here all the paper-based documents are converted into a web form, where companies can fill in all the required data. Once all the required data is added, Web EDI converts it into an EDI message which can be sent securely with the help of internet protocols like FTPS and HTTPS etc.
  • Mobile EDI Who doesn’t use a mobile these days? How if EDI can be integrated with the mobile? Mobile EDI is an emerging technology for EDI where the work is done with the help of mobile communications. But still, this EDI software aren’t developed keeping a mobile user in mind. However it is easy to use the EDI in mobile as we are more experienced with the particular mobile we are using. Even you can access the data whenever and wherever required.
  • EDI Outsourcing When you allow a third party provider to manage all the services, then you are outsourcing the EDI. as implementing EDI is a difficult task where you require a big range of skills and investment. This will help you in increasing business productivity because the supplier and you are providing a new level of information about the services to your supply chain and trading partners. 

EDI Software

Choosing an appropriate EDI Software is a big task. Some of  the famous EDI software vendors are:

  • Map My EDI by WebBee Global
  • Adeptia EDI Solutions
  • Dell Boomi EDI
  • Web EDI – Cloud-based EDI Solutions
  • Mulesoft
  • Premier EDI 
  • Cleo

Future of EDI

Considering today’s scenario, EDI is growing rapidly. This is mainly because companies are on the verge of understanding the importance and impact of EDI on their company. So the question here arises is what is the future of EDI? There are three main platforms where EDI is headed towards. They are:

  • Internet of Things and Sensors: We are very well incorporated with all the shipping activity carried out under the IoT which can lead the future of EDI into IoT and sensors. It can help EDI 214 transaction code resulting in improvements in package conditions in the near future.
  • Blockchain Technology: Blockchain tech will help EDI grow as it has the capability to underpin all the EDI information which flows for EDI shipping and transactions.and moreover blockchain tech can widely secure these EDI transactions as Blockchain tech is difficult to hack or trespass.
  • Artificial intelligence agent: This can be used in the future for monitoring all the events and information connected with the EDI transaction Codes and shipment. This will help companies to identify the non-compliant or unwanted events to be stopped within seconds. It will also help us to analyse efficiently regarding EDI transactions.

ANSI X12 835 is what type of EDI transaction?

ANSI 835 EDI is the electronic version for the Paper Health Care Claim Payment/ Advice. This is used for making the payments and sending an explanation of benefits from health insurance.

ANSI X12 270 is what type of EDI transaction?

ANSI X12 270 is a transaction set that contains the formats and establishes the data contents with the EDI environment. This is used to enquire about the employer benefit plan under the subscriber’s policy.

Overall, EDI is a very important platform for companies to improve the efficiency and productivity of their company. EDI enables you to perform day to day business tasks at a faster rate with high accuracy. 

Get the best EDI Consulting Services from Map My EDI.

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