What Does Electronic Data Interchange (EDI) Mean?
Electronic data interchange (EDI) is the electronic transmission of structured data by agreed message standards from one computer system to another without human intervention. It is a system for exchanging business documents with external entities.
Techopedia Explains Electronic Data Interchange (EDI)
EDI is a sequence of messages between two trading partners, either of which may serve as the originator or recipient. The messages are transmitted and received without human intervention. Each message is composed according to a standardized syntax from a sequence of standardized data elements. It is this standardization that makes message assembling, disassembling and processing by the computer possible.
Value-added networks are the intermediate agencies providing secure and reliable transmission and storage of EDI messages. Web-based EDI (webEDI) allows a company to interact with its suppliers without implementing a complex EDI infrastructure. WebEDI services only require an Internet connection; thus, EDI has become accessible and affordable to even small- and medium-sized businesses.
EDI has been criticized for its high set-up and VAN costs as well as complex standards. However, its benefits include:
