We at Innovative Architects completely understand how complex business technology systems can be to the untrained eye…that’s the central reason why we started this blog. Helping businesses understand the value and processes behind what we do goes a long way toward appreciating its benefits.
Electronic Data Interchange (EDI) is one of the basic principles driving business technology integration.
EDI can be defined as the standardized exchange of information between computers that are either within or outside the organization. These ‘standards’ by which information is exchanged are referred to as either ANSI X-12 or EDI X-12, which are developed by the Data Interchange Standards Association.
(Learn more about the specific EDI standards by reading our knowledge center article on the matter)
While these standards do provide some authority on how businesses should conduct transactions, they do allow flexibility. Many industries are employing EDI to help them more effectively manage their enterprises.
One central idea to remember about EDI – unlike simple exchanges of text like an email, EDI messages involve actual transactions and not simple data exchanges.
To see EDI in real world action, consider the following scenario:
A purchasing manager is preparing an order in his company’s system. Once he completes this, the document is then translated into EDI format (likely an EDI 850 or purchase order). Once the document is properly formatted, it’s transmitted electronically to the supplier.
Other common EDI documents include Advanced Ship Notices (EDI 856) and Invoices (EDI 810).
As individuals, we interact with EDI systems on a daily basis. One common example is Electronic Funds Transfer, or EFT. When you buy groceries and use a debit card, or otherwise transfer funds between accounts, you’re using a certain kind of EDI system.
Learn more about some of the benefits EDI can bring your business by visiting our EDI knowledge resources on the main site.
And if you have any further questions on how Electronic Data Interchange can help your company work more efficiently, contact EDI consultants at Innovative Architects today.