EDI stands for Electronic Data Interchange. It is the process of exchanging specific data sets electronically. These data sets normally come in the form of invoices, purchase orders, reports and other documents.
Normally, EDI deals with the transfer of large amounts of information, for example client information, in a specified format. The data is submitted in a bi-directional format, where the sending computer system communicates with the receiving system to confirm receipt and report on any errors.
Because of the nature of modern business and the need for fast, secure transfer of information, EDI is a great solution for many businesses to deliver large amounts of data and information.
Electronic Data Interchange and the Internet
Part of the confusion revolving around EDI refers to its difference with the Internet. The Internet is obviously the epitome of electronic data transfer. So what’s the difference between the Internet and EDI?
The main difference between EDI and simply sending email with EDI information, is the set of rigorous standards involved with following the EDI format. These standards were put in place to ensure that companies who use EDI as their method of information transfer were being diligent about security, and conforming to the proper procedures of the protocol.
The other difference, is that EDI is for the most part handled by computer systems; human intervention is usually only required when there are errors to address. In this way, it needs to follow a seamless data transfer process by which the data set being sent to the receiving machine is accepted and confirmed with no down-time.
Over time, EDI and the web began to live harmoniously. In fact, those businesses that have used EDI as their data transfer methodology have leveraged the Internet to send their EDI documents, instead of what some thought would happen: the Internet replacing EDI. If anything , the Internet has simply facilitated the transfer of EDI documents.
The nature of EDI is to follow a rigid security and data management protocol, while at the same time being flexible, in order to pertain to multiple business models.
Many companies choose to outsource their EDI because of the level of complexity involved with the format. When outsourcing EDI, it is important to select a company that has a proven track record.
Commport has been an EDI solution provider since 1985. Contact us today for more information.