Types of EDI
There are many types of EDI methods organizations will use in order to enable EDI across their trading community.
Electronic data interchange (EDI) is one of the most common forms of structured electronic exchange of business documents between organizations.
More than 85% of all electronic business transactions take place using EDI. EDI is used in industries including retail, banking, high-tech, manufacturing, and services.
Types of EDI:
Direct EDI, sometimes referred as point-to-point EDI, establishes a single connection between two business partners. In this approach, a business would connect with each of their business partners individually. Typically large corporations that have business partners with whom they exchange a high volume of EDI documents will choose this method.
While Direct EDI provides more control for each business, it can become very complex quickly. Different EDI trading partners often use separate EDI protocols which means you need to support each available option.
With the direct connection model, you will need to purchase a software package that enables you to use all the agreed upon protocols, such as
EDI via AS2 (Applicability Statement 2)
AS2 stands for Applicability Statement 2. Easily described as a business to business connection in a point-to-point manner via the web. AS2 is one of the most popular methods for transporting EDI data securely and reliably used by millions of businesses, including most major retailers, such as Amazon and Walmart.
EDI via SFTP (Secure File Transfer Protocol)
SFTP stands for Secure File Transfer Protocol, also called SSH File Transfer Protocol, is a network protocol for accessing, transferring and managing files on remote systems. SFTP provides organizations with a higher level of file transfer protection which allows businesses to securely transfer billing data, funds and data recovery files.
EDI via FTPS (File Transfer Protocol)
FTPS stands for File Transfer Protocol Secure which is an extension to the commonly used File Transfer Protocol. In FTPS, FTP data travels through the network using either Secure Sockets Layer (SSL) or Transport Layer Security (TLS) protocols.
EDI via Value Added Network or EDI Services Provider
The majority of EDI exchanged today occurs through EDI Value-Added Network (VAN). As long as two organizations are using the same VAN, communication is possible regardless of which EDI protocol is used to transfer information. Unlike Direct EDI this means organizations can manage one connection with the EDI VAN instead of separate lines of communication with each potential partner. Many businesses prefer this model to save them from the ongoing complexities of supporting the varying communication protocols required by different business partners.
How it Works
An organization will be provided with a virtual mailbox by the EDI VAN provider. From there documents are sent and received. A trading partner retrieves messages by connecting to the VAN, which validates the message and verifies the recipient's identity. It then provides a full audit trail, and all messages are tracked and accurately recorded.
Benefits of Value Added Network (VAN)
- 1. Error correction
- 2. Improved exchange
- 3. Secure
- 4. Standardized
Internet EDI is simply conducting EDI through an Internet browser. It replicates paper-based documents as a web form.
Internet EDI enables small - and medium-sized businesses to create, receive, turn around and manage electronic documents using an internet browser. The Internet EDI interface is meant to be user-friendly and not require a lot of experience with EDI systems. Its popular with small to medium businesses as set up is quick, easy and business partners anywhere in the world can connect without dedicating IT resources to their EDI implementation.
Benefits of Internet EDI:
- Management capabilities for hundreds of trading partners
- MH10 shipping labels
- Proactive notification email alerts
- Business rule validations
- Duplicate checking
- Reports for all inbound transactions
- Retrievable archive
- Document import and export to enable partial integration
EDI Outsourcing also referred to as B2B Managed Services is an option that enables companies to use external specialist resources to manage their EDI environment on a day-to-day basis. This includes software and or hardware, infrastructure and ongoing updates or changes to EDI specs or maps.
There are many benefits to outsourcing your EDI:
- Small set-up fees and a lower total cost of ownership
- Pay per use model
- Human errors are eliminated
- Access to EDI experts
- Managed connectivity, testing and setup, updates and support are covered
If you have implemented a fully integrated EDI compliant system but still have partners who want to send you faxes a managed EDI Service can be your clearinghouse for fax automation.
Often used by companies that prefer to manage their own EDI environment
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Complete EDI Guide
This is one of the most up to date EDI guide you will find on the internet with over 11,500+ words. It covers topics like history of EDI, EDI stats and market growth, benefits of EDI, EDI transaction types, EDI standards and more