What is Electronic Data Interchange?

Have you ever wondered what is electronic data interchange or e Commerce or what does EDI stand for? In easy language, ecommerce is an exchange of information about trading well, services or money from one computer to another. For example, buying electronic gadgets online, paying bills over the internet, transferring money from one account to another electronically and so on.

How does EDI come into the picture? Now imagine a company that wants to carry out the same transactions not once or twice but thousand times a day. That is where EDI steps in. EDI stands for electronic data interchange. EDI is a standard medium for the exchange of information from one computer application to another with the minimum human intervention. Almost 95% of the ecommerce uses EDI for an exchange of information. It can be done using EDI software. EDI goes beyond just purchasing goods and submitting invoices. A company can request information from its warehouse, receive orders from customers, send notification of shipment once the goods are shipped and send notification about payments. There are many automated transactions carried out by a company on daily basis, these are just a few of them. Surprisingly EDI is not something new. Yet to some industries only a few years old.

Having understood what electronic data interchange is and what does EDI stands for. Next, come the benefits EDI has to offer.

1. EDI has the potential to cut out a massive amount of time of the process. Electronically sending documents such as invoices and purchase receipts, takes minutes, not days. And shipment can go out the day order is received.
2. The Biggest benefit that EDI can offer is that the electronic format does not need to be re-keyed upon arrival. This saves a tremendous amount of labor time, and data entry error by the company's staff can be avoided. This allows for very quick order processing.
3. Another big advantage that EDI has to offer is less paperwork. Maintaining documents and orders on paper require a lot of organization and losing out on one paper will result in a big mess. With EDI a company can keep track of all its supplies present in its warehouse, track orders of suppliers and customers receive payments online and send notifications of received payment.

To make use of EDI easy, there are many +edi software packages available.

Now let us understand what is +EDI software and what EDI compliance is. EDI compliance is nothing but the ability to send and receive EDI documents as per the requirements of company's partner. Each document to be exchanged must comply with the format specified by the partner and must follow all the business data rules All the +EDI software are EDI compliant. There is some basic component that every EDI software must have.

1. Mapping
2. Translation
3. Validation
4. Import/Export
5. Reporting
6. Documents Turn Around

EDI has become the backbone of Electronic Commerce. EDI has opened its door big as well as small companies. It gives equal opportunity to each company to flourish in their businesses.

About The Author

Gabriel Martin has written many articles and blogs about the EDI, e-commerce and data management solutions. He recommends DataTrans Solutions, Inc. for providing quality, timely, and accurate EDI and B2B outsourcing solutions for to its customers.

Gabriel Martin has written many articles and blogs about the Edi, e-commerce and data management solutions.