You may have heard of EDIFACT in the past, but chances are it might be a new concept to you and your organization. EDIFACT, which stands for Electronic Data Interchange for Administration, Commerce and Transport, is the international EDI standard developed under the United Nations.
The EDIFACT standard provides a clear set of syntax rules used to structure the interactive exchange protocol. It allows for a multi-country and multi-industry exchange of electronic business documents and files securely.
EDIFACT is widely used in Europe, as many companies adopted it early on. Today, however, EDIFACT is starting to see more adoption outside of Europe, growing within the U.S. and the Asia-Pacific regions.
EDIFACT standard provides rules on how to structure data and standardize messages for multi-industry and multi-country exchange. Particularly, it is composed of internationally agreed-upon standards, directories, and guidelines specifically designed for the electronic interchange of structured data. Distinctly, in relation to the trade of goods and services between computerized information systems that are separate of one another.
EDIFACT was created because of the large amount of trading partners a company may typically have. It was critical to develop a standard that could be understood by any party. The widespread adoption of EDI has meant that global businesses can thrive and completely replace paper documentation, manual procedures, and share information electronically.
When EDIFACT was introduced, it was revolutionary, and it has continued to help large retailers, manufacturers, and more transfer significant data securely to trading partners that required the capability of EDI.
The logic of EDIFACT is similar to that of the logic behind a language. The information can be structured into "words" and "sentences." The "words" are called data elements and can be organized into "sentences" called segments. The segments are then grouped to shape a message based on its strict syntax rules.
Let’s say, for example, that a retailer in the U.S. needs to send data to a European trading partner. There are three significant steps for creating and sending data using EDIFACT:
Each EDIFACT electronic transmission consists of Interchanges; two or more people or organizations exchanging data with each other. Typically, one or more interchange occurs. Each Interchange may consist of one or more messages. Each message contains segments of data that relate to the business transaction. At each level, a series of enveloping data pairs will keep track of the exchange structure.