Introduction to EDI

EDI (Electronic Data Interchange) is the paperless exchange of documents between trading partners. Companies that use EDI capability can communicate with their suppliers and vendors using a paperless process. Data is transmitted from one company to another electronically. The object of EDI is to streamline business operating procedures and reduce costs.

More technically, EDI is a technology for exchanging business documents in standardized electronic formats. The standards supported for EDI are Accredited Standards Committee ASC X12.

An EDI message contains a string of data elements, each of which represents a singular fact, such as a price and product model number, separated by delimiters. The entire string is called a data segment. One or more data segments framed by a header and trailer form a transaction set, which is the EDI unit of transmission (equivalent to a message). A transaction set often consists of what is usually contained in a typical business document or form. The parties who exchange EDI transmissions are referred to as trading partners.