THE TOP 10 THINGS YOU MAY KNOW ABOUT EDI

By
Nicole Wilson
August 27, 2023
5 min read
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Perhaps your business relies on an efficient and profitable supply chain. Maybe growing your company involves extensive document preparation or handling to move deals forward with your business partners. Of the various and numerous needs you encounter in your business, many will lead you to EDI technology as a solution. Whether you're already using EDI or have been considering implementing it into your business, here are the top 10 things you may (or may not) know about EDI.

1. WHAT IS EDI?

Electronic Data Interchange (EDI) is a secure, electronic method of sharing information with your business partners in a standard, compliant format. Examples of EDI transmitted information between trading partners include:

  • Purchase orders
  • Invoices
  • Shipment confirmations
  • Inventory reports

EDI can also be used within a company to share data among various departments.

2. EDI COMMUNICATION OCCURS BETWEEN COMPUTERS, NOT PEOPLE

EDI technology makes it possible for communication to occur directly between two computers. This electronic communication capability eliminates the need for individuals to generate and handle all the paperwork typically associated with B2B relationships or supply chain activities.

3. EDI TRANSACTIONS ADHERE TO A UNIVERSAL, STANDARDIZED FORMAT

Trading partners who use EDI must all use the same standardized format for preparing and sending information. EDI ensures the accuracy of the data shared eliminating errors or miscommunications through standard communication formats and processes.

4. EDI IS NOT USED BY CONSUMERS TO PURCHASE PRODUCTS

EDI is not consumer-facing. People do not use EDI to buy products, goods, or services from a company. However, EDI is an integral part of the supply chain that manufactures, transports, and distributes the products we purchase.

5. TRADING PARTNERS USE EDI FOR B2B TRANSACTIONS

EDI technology streamlines B2B transactions between trading partners. EDI not only guarantees information accuracy but also decreases the amount of time it takes to move a business forward efficiently. Trading partners who use EDI can submit orders, monitor inventory, and track shipments without any time-consuming paperwork. EDI makes it possible for trading partners to move quickly on deals and accomplish in only minutes what once took days or weeks.

6. ENTERPRISES HAVE BEEN USING EDI SINCE THE 1960S

Large companies in the railroad and transportation industries have been using EDI since the 1960s (See how EDI was born in 1948). Initially, information was encoded onto magnetic strips and transmitted by a courier or through the mail system. By the 1980s, telecommunications were developing quickly and soon became the predominant method of sharing information through EDI.

7. THE UNITED STATES GOVERNMENT HAS BEEN USING EDI SINCE 1994

In accordance with the Federal Acquisition Streamlining Act (FASA), the United States government has also been using EDI technology since 1994. Moreover, in 1996 the Clinton administration mandated the use of EDI in the healthcare industry through the Health Insurance Portability and Accountability Act (HIPAA).

8. EDI IS A STRATEGIC MARKETING TOOL

EDI is also a marketing tactic for you to gain more lucrative trading partnerships. Virtually all large retailers use EDI. If your company has EDI capability, it makes you more attractive and trustworthy to potential partners and gives you traction to grow your business and initiate deals at the enterprise level.

9. VAN STANDS FOR VALUE-ADDED NETWORK

EDI systems often require cost-prohibitive hardware, software, and EDI staff. Many companies outsource their EDI service to an EDI VAN provider. Value-added Networks (VANs) are dedicated exclusively to EDI technology offering the same functionality and security of more complex integrations involving hardware. They facilitate standard information sharing between trading partners and provide data storage capabilities as well.

10. EDI VANS OFFER AN ARRAY OF ADVANTAGES

EDI VANs boast a multitude of benefits, such as:

  • EDI VANs are less expensive to implement than hardware/software integrations.
  • EDI VANs offer secure data exchange and storage.
  • EDI VANs are accessible in a cloud environment, which makes the data you exchange with trading partners not only secure and accurate but portable.

There's one more thing you should know about EDI: BOLD VAN.BOLD VAN is an industry leading EDI VAN provider. We have over 25 years of success implementing custom, open EDI solutions and integrations for companies of all sizes on a fast, reliable EDI network. Call to speak with an EDI specialist today 844-265-3777.

Nicole Wilson
Content Manager

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