EDI - Electronic Data Interchange

Electronic data interchange (EDI) provides a means for information to flow between entities. Companies use EDI to provide enhanced service for their customers and partners, by reducing transaction times and costs. Other benefits of EDI include the reduction of paperwork and better inventory management. When EDI is wed with XML (Extensible Markup Language), structured data can be exchanged over the Internet.

In other words: say goodbye to those crates of paper as the machines do all of the heavy lifting.

While the basics of EDI have been around for more than thirty years, the last decade has seen the greatest surge in EDI use, due to the ubiquity of the Internet.

The ANSI Accredited Standards Committee (ASC X12) defines Electronic Data Interchange as "the computer-to-computer exchange of business data in standard formats. In EDI, information is organized according to a specified format set by both parties, allowing a 'hands-off' computer transaction that requires no human intervention or rekeying on either end. All information contained in an EDI transaction set is, for the most part, the same as on a conventionally printed document."

Ginnie Mae provides some handy EDI definitions:

  • Trading Partner - The sending and/or receiving party involved in the exchange of EDI transmissions
  • Translator - Software that is used to convert standardized EDI data to a corporate proprietary format and vice versa
  • Transaction Set - The EDI format for a business document, such as an investor report, purchase order or invoice
  • Standards - Guidelines that provide the definition and format of business documents, allowing EDI linked computers to speak the same language
  • Mapping - The process of identifying the standard data elements’ relationship to the application data elements

The Washington Publishing Company (WPC) produces EDI implementation guides for a number of fields, including Insurance (ASC X12N), Pharmacy Professional (NCPA), Rail Carriers (RAILINC), Rail Suppliers (NAPM), Ocean Transportation (ISA), and Metals Outside Processors (AISI). The WPC EDI Implementation Guides are available as PDFs (either downloadable or on CD-ROM) as well as bound copies.