What is E.D.I. (Electronic Data Interchange)?
An automated way for businesses (Trading Partners)
to exchange vital documents.

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents such as Purchase Orders, Shipment Status Notices, Load Tenders, Invoices, and Remittance Advices. The two organizations who exchange documents are called "Trading Partners" and the exchange occurs without human intervention. Data moves electronically through the Internet securely to each however, a person such as a Customer Service Agent must review and approve the document before it is accepted or submitted.

Processes that used to be completed manually with paper, have been replaced with an invisible, electronic flow of formatted data.  EDI has replaced paper forms of many documents, including invoices, bills of lading, advance shipping notifications, student transcripts, healthcare claims and many others.

EDI is widely used by large companies around the world. EDI utilizes a tightly structured data format which allows the data to be processed directly in either the originating or receiving company’s application.

There are three major processes involved in the exchange of EDI data:
Mapping, Translation and Communications.
Each require additional software to perform the task.

§  Mapping involves assigning each element on an EDI document so the translator learns how to convert them into another format (such as report, flat file, etc.)

§  Translation uses the mapping format to process inbound EDI data, or preparing outbound files for transmission.

§  Communications is the transmission of the EDI documents over the internet in a secure way and may vary depending on your customer’s requirements.The most popular are through a third party VAN or directly by FTP or AS2.

VAN:
Value Added Network service providers are similar to a post office where connection is made on certain interval to download /upload documents. They may require monthly mailbox and transactions fees.

FTP:
With File Transfer Protocol, direct communication between servers is affordable and easier to set up but transmission could be slow when required to support multiple trading partners. 

AS2:
Most companies are asking their trading community to implement AS2 solutions to replace traditional VAN service, as a way of reducing costs. AS2 requires a server-to-server connection where it automatically transmit or receive EDI documents when available. It is pricey and can make it more challenging due to fire wall setup.