EDI: Electronic Data Interchange

Electronic Data Interchange, or EDI, refers to the structured transmission of data from organization to organization through electronic means. This could be to transfer electronic documents from one computer system to another and refers to a family of standards. EDI is primarily based upon ASCII (American Standard Code for Information Interchange), and focuses on formatted single messages rather than the whole sequence of conditions and exchanges that make up inter-organizational processes. Because of this EDI also implies a sequence of messages between two parties, having formatted data that represents the document. With EDI, these messages are communicated by computer to computer, rather than having human intervention.

Since EDI is considered to be a technical representation of a business conversation between two computers, it often describes the rigorously standardized format of these electronic documents. Because of this, it is important to have strict standards. EDI standards were designed to be independent of software and communication technologies. In 2002, the IETF published RFC 3335, which offered a standardized, secure method of transferring EDI data via e-mail.
The four major sets of EDI standards are as follows:

  • The UN recommended UN/EDIFACT is the only international standard and is predominant outside of North America.
  • The US standard ANSI ASC X12 is primarily used in North America
  • TRADACOMS standards are used in the UK retail industry
  • ODETTE standards are used in the European automotive industry.

Typically, EDI documents contain the same information that would be found in a paper document of the same function. For example, an EDI 940 ship-from-warehouse order is used by a manufacturer to tell a warehouse to ship the product to a retailer. This contains a shipping address, billing addres, a list of product numbers in the form of a UPC barcode, and quantities. However, EDI is used across all industries, not just in warehousing applications.