Electronic Data Interchange (EDI)

WHAT IS EDI? YOUR COMPLETE GUIDE

Electronic Data Interchange (EDI) is a flat file format that trading partners can use to securely send and receive business transactions or files across worldwide organizations.

About EDI

EDI (Electronic Data Interchange) lets you securely send and receive business transactions.

Today, many organizations satisfy EDI file translation and data movement requirements with a mix of:

  • Written scripts
  • Homegrown tools
  • Single-use PC applications
  • Manual processes, like email, mail, and fax

While these methods still let businesses receive files, translate them to or from X12 EDI formats, and move them to other applications or servers for storage or processing, they can be time-consuming to maintain and difficult to integrate.

What are the Benefits of EDI?

Using EDI to replace email, fax, and mail communications can save organizations time and money. Rather than relying on manual back-and-forth exchanges, automating data transfers with EDI can reduce time spent waiting on paper missives or manually entered information.

EDI provides real-time visibility into transfer statuses – no more checking for mail, deciphering illegible handwriting, or sifting through email chains. Because EDI is built on standardized data structures, many EDI software solutions facilitate translation to and from EDI, helping map each data point to its correct place. With an EDI software solution, you can move directly to the next step in your process rather than doing manual data entry.

Keep reading: Centralizing Your EDI X12 File Translation

What is EDI X12?

X12 is a form of EDI based on standards established by the Accredited Standards Committee X12 (ASC X12). X12 documents adhere to strict formatting rules that can help streamline moving data between organizations.

Reliance on EDI X12 standards to exchange files between organizations is increasing. Businesses expect that their trading partners can handle high-volume transfers of EDI X12 documents. Because of this, there’s a growing need for critical EDI data translation and AS2 server protocols to be included in a secure, centralized, and affordable solution. Why AS2? AS2 is frequently used by trading partners when transferring EDI documents.

Keep reading: EDI X12 Files

Who Uses EDI?

EDI is frequently used to send and receive everyday transactional files, like purchase orders and invoices, but it’s also commonly employed in industries that require easy-to-follow audit trails, including healthcare, insurance, and banking.

Industry-specific requirements also call for and benefit from EDI formats. While retail and logistics, alongside healthcare, often exchange EDI-compliant documents, higher education and technology find EDI useful as well.

Keep reading: How an EDI Solution Simplifies Business Processes

Translating To and From EDI

Organizations often use varying data standards and formats that aren’t easily input into a trading partner’s database. Converting your internal data to the EDI standard format, or converting your trading partner’s data from EDI to your internal format, by using a software solution reduces manual entry and saves organizations time. EDI software typically allows you to read, write, and map EDI files between databases. Look for solutions that also allow you to:

  • Cut time and costs traditionally required to hard-code data maps
  • Centralize your encryption and data translation in one tool
  • Map data with a browser-based wizard
  • Securely send EDI X12 and XML data transfers

Keep reading: EDI File Translation

EDI software helps you translate your data to the EDI format and send the date, and can help your trading partners translate EDI to their internal data format.

EDI Terms to Know

ASC X12 – Stands for the Accredited Standards Committee X12. It is a standards organization and develops and maintains the X12 EDI and CICA standards, along with XML schemas that drive business processes globally.

CICA – Short for Context Inspired Component Architecture. It is ASC X12’s message-design methodology, created to help resolve costly, differing, and often incompatible XML messages used for B2B (Business-to-Business) data exchange.

Computer-to-computer – EDI replaces physical communications like mail and fax, and internet-based methods like email by letting computers handle sending a receiving data, with very little human input.

EDI – Short for Electronic Data Interchange. It is a flat file format that B2B trading partners use to send and receive business transactions. Both parties must agree on a transaction set before files are exchanged. Each transaction set corresponds with a number and type of document.

EDIFACT – Stands for the Electronic Data Interchange for Administration, Commerce and Transport. It is the international EDI standard developed by the United Nations.

Transaction Set – a single X12 EDI document. Transaction sets are made up of data elements, segments, and envelopes.

X12 – A form of EDI data that is supported by the ASC X12 standard. It is used by organizations worldwide to exchange sensitive data with other businesses.

More file transfer terms to know

EDI & EDIFACT

EDIFACT is the most popular EDI data standard outside North America.

What is EDIFACT?

EDIFACT, the Electronic Data Interchange for Administration, Commerce, and Transport, is the United Nation’s answer to EDI, and as such is the most popular EDI data standard outside of North America. It’s widely used in Europe- and Asia-based organizations, and an increasing number of organizations in the United States are adopting EDIFACT alongside EDI.

EDIFACT, like EDI, provides a clear set of syntax rules on how to structure data and standardize messages to smooth cross-industry and multi-country exchange.

Keep reading: What is EDIFACT?

What is the Difference Between EDI and EDIFACT?

EDI X12 and EDIFACT are both standards that help exchange electronic business documents securely, and while they’re similar in concept, they’re somewhat different in what they offer and how they function. Each has a different terminology and document structure, but both can be boiled down to secure file transfer methods.

Keep reading: EDI X12 vs. EDIFACT: What's the Difference?

The Accredited Standards Committee X12, chartered by ANSI (American National Standards Institute) maintains EDI standards, while the United Nations Economic Commission for Europe and the International Organization for Standardization both support EDIFACT.

Because EDI is more U.S.-focused, EDI is often used to create HIPAA-compliant documents; EDIFACT does not offer HIPAA documents.

Keep reading: EDI X12 and EDIFACT Transaction Sets

EDI & EDIFACT Tutorials

How-to tutorials for using EDI and EDIFACT.

How to Import an EDI X12 Document into a Database

Learn how to read data from an EDI X12 document using the Read EDI X12 task in GoAnywhere MFT and insert the data into a database table.

How to Query a Database and Write the Data to an EDI X12 Document

Learn how to query a database table and write the data to an EDI X12 document using the Write EDI X12 task.

How to Import an EDIFACT Document into a Database

Learn how to read data from an EDIFACT document using the Read EDIFACT task in GoAnywhere MFT and insert the data into a database table.

How to Query a Database and Write the Data to an EDIFACT Document

Learn how to query a database table and write the data to an EDIFACT document using the Write EDIFACT task.


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Using EDI in Your Organization

Centralize your encryption and data translation with one easy-to-use solution. Save the time and costs usually required to hard-code data maps. Ensure your data is always protected with encryption, automation, and reporting, alongside EDI file translation with GoAnywhere MFT. See our powerful EDI data translation capabilities in action today.

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