An EDI project involves implementing electronic data interchange systems to automate data exchange and improve collaboration with trading partners.

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The Advantages of EDI integration projects

Why use an EDI integration project?

In today’s business world, lots of decision makers are still wondering whether to plunge into EDI integration projects or to hire a couple of new employees to manually enter data received and processed by a third party EDI service bureau.

Which option is much more beneficial for their company and returns the most on their investment?

At a quick glance, hiring data entry clerks might seem appealing for the following reasons:
1) The EDI understanding is still a complex topic to understand by non-technical people;
2) The considerable initial capital investment on integration projects: professional services, EDI consultants, professional services…
3) The ongoing EDI service bureau transactional fees, connectivity fees..
4) The time and effort needed to integrate EDI with their ERP, or Business management software solution, that will be billed by IT consultants, EDI specialists and consultants.

While the above reasons are completely valid, companies stop short from researching about the evolution of the EDI world.

With EDI2XML and its “Software as a Service” model, companies are able to cut over 75% of their EDI integration projects costs and gain efficiency and accuracy within a short amount of time. Just by implementing and using EDI2XML translators, the IT consultant of an SMB, will be able to focus on building the integration between XML data files and the business management software solution in place, since XML is widely used and understood nowadays. EDI2XML is able to generate a readable XML of the EDI file, easily understood by humans and systems. As long as the IT consultant has access to the ERP database structure, he will be able to read the EDI formatted file in XML, and push to the tables, after applying all kinds of business validation. The same applies for outgoing EDI documents. As long as the IT consultant is able to generate an output XML file based on a pre-defined schema, XML2EDI engine will process that file and convert into an EDI file format.

EDI communication protocols are becoming very straightforward today; less complexity and more security. Major retailers and corporations are using AS2 or FTPs secured in order to communicate EDI documents back and forth between business partners. Even better, if a company is not able to handle EDI projects due to lack of budget or expertise, EDI2XML technology is used and empowering erpwizard which is a fully integrated business management software solution offered “as a service” (SAAS) either “on customer premises” or in “the cloud“. Not only is it a fully integrated ERP software solution, but it offers a complete EDI solution.

We have over 15 years in EDI integration in the retail, manufacturing, distribution and healthcare industries. We’ve been very active in Montreal, Canada, where our EDI consultants are experienced at the business level just as much as they are at the technical level.

Read: Free EDI to XML converter: What’s the catch?

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What is EDI?

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This post was updated to reflect current trends and information. 

A Technical Introduction to EDI

Before I start explaining anything about EDI2XML, I would like to start by giving a more technical introduction to EDI, its usage, and its history. EDI is an acronym for Electronic Data Interchange. It has been around for a long time and has been used by retailers and private corporations in several verticals (health, retail, insurance…). When people in the business community talk about exchanging “EDI transactions“, they refer to a combination of the following:
  • Structured EDI file format including version, revision, standard…
  • Protocol of communication, medium and security (FTP, sFTP, AS2, VAN…)
  • Business partners (vendors, retailers…)

Simply speaking, EDI is the process of “electronically” exchanging documents between business partners in a pre-defined format. The information is transmitted in a secured manner. Normally, files with EDI format are structured and follow “EDI standards”.

EDI Standards

There are several widely used EDI standards, including:

  1. ANSI ASC X12: This is the predominant standard used in North America for various industries, such as retail, healthcare, transportation, and finance. It defines specific transaction sets like purchase orders (850), invoices (810), and shipping notices (856).
  2. UN/EDIFACT: This is an international EDI standard developed by the United Nations. It is widely used outside of North America and is popular in sectors like transportation, logistics, and customs. UN/EDIFACT includes a comprehensive set of message types covering various business processes.
  3. GS1 EDI: This standard is developed by GS1, a global organization focused on supply chain standards. It is used primarily in the retail and consumer goods industries. GS1 EDI incorporates the GS1 barcoding standards and provides specific message types for processes like product catalog synchronization, purchase orders, and invoices.
  4. HIPAA EDI: The Health Insurance Portability and Accountability Act (HIPAA) introduced specific EDI standards for healthcare-related transactions. These standards ensure the secure and standardized exchange of sensitive patient data between healthcare providers, insurers, and other entities.
  5. TRADACOMS: Developed in the United Kingdom, TRADACOMS is an EDI standard commonly used in the retail industry. It includes message types for processes like order management, stock control, and invoicing.

These are just a few examples of the many EDI standards available. Each standard has its own message formats, data elements, and communication protocols. Organizations typically choose the appropriate standard based on their industry, geographic location, and trading partner requirements.

Read: What is a VAN ?

EDI X12

EDI has been evolving with different versions, revisions and sub-revisions. For example, in the X12 standard EDI format, I started my EDI career with the EDI version 3010. Today, we are working with much higher EDI versions such as 4010, 5010, 5020… It is important to note that within each one of the above versions, different revisions might exist.

EDI Transactions and Documents

Read: How does EDI2XML work ?

EDI documents are “number coded”; for example, a Purchase Order sent by a retailer to a vendor using EDI format is coded under the number “850”. The same applies for other documents such as 810 (for invoice), 856 (for Advance shipping notice), 820 (for Payment Advice), and 860 (for Retailer triggered Purchase Order Change). The list goes on and it is not limited to the above. For a more extensive list of EDI documents that EDI2XML supports,  visit our EDI Document Library.

Each EDI document sent to a party has to be responded to by the other party by sending back a Functional Acknowledgment (FA 997). The 997 designates that the “structure” of the EDI file was certainly received, without looking at the “content” of the EDI formatted file. Both business partners understand the “content” of the information and they are able to translate into business terms. This is where EDI2XML comes into play to convert and translate the content and make it ready for integration.

To learn more about EDI, read our new blog “What is EDI (Electronic Data Interchange)?” 

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ANSI ASC X12 Standards Overview

What Are the Differences Between ANSI X12 and UN/EDIFACT
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