Today, there are still decision-makers who are debating whether to invest in EDI integration projects or to hire a few new employees to manually enter and process data from trading partners.

Since EDI is still a difficult topic for non-technical people to understand, hiring data entry administrators may seem like a reasonable choice. It is commonly believed that EDI requires a significant initial investment.

Let’s take a look at what EDI automation is and how companies can find the most cost-effective solution.

What is EDI Automation?

EDI (electronic data interchange) is a technology used by business partners to exchange business electronic documents in standard formats without requiring human intervention.

These exchanged documents are called – EDI Transaction Set. If you want to see the full list of documents that can be exchanged in EDI format check our Complete List of EDI X12 Codes.

How Does EDI Benefit Businesses?

The use of EDI greatly improves the overall state of the business as it has many benefits.

– Reducing costs. Saving time for employees to process documents and enter them into databases. EDI reduces an enterprise’s printing, shipping, and storage costs.

– Speed. Documents can be exchanged instantly with a business partner. You won’t lose documents along the way or among the papers on your desk.

– Automation. EDI significantly improves the business because it automates processes and reduces the time delays associated with manual data entry.

– Accuracy.  Elimination of errors associated with manual data entry.

Useful: Download our free Guide “Introduction to EDI Communication” to learn more about EDI

What Documents are Used in EDI?

As mentioned above, you can exchange almost any type of document using EDI, but the most common ones are:

Purchase Order – EDI 850

Useful Reading: All You Need to Know About EDI ANSI X12 Transaction Set 850 Purchase Order

Invoice – EDI 810

Useful Reading: What is an ANSI ASC X12 EDI 810 Invoice?

Purchase Order Acknowledgment – EDI 855

Useful Reading: What is EDI 855 Purchase Order Acknowledgment?

Inventory Inquiry/Advice – EDI 846

Useful Reading: What is EDI 846 document?

Advanced Ship Notice (ASN)– EDI 856

Useful Reading: What is Advanced Ship Notice (ASN) 856 Transaction Set?

Types of EDI (Electronic Data Interchange) Solutions

Currently, many EDI providers offer various EDI solutions. There is no one-size-fits-all EDI solution for every company. A company should evaluate which option will be most cost-effective for its business model. Thus, the main offers on the EDI market are:

Our company offers all three named EDI solutions. If you don’t know which solution is right for you, contact our experts for a free consultation.

EDI Document Business Flow

1. One business partner (generally the buyer) generates a document (i.e. Purchase Order) in his internal ERP system (i.e. SAP, Microsoft Dynamics, JD Edwards, etc.). Depending on the company’s business process, the document can be generated automatically or manually.

2. EDI providers can either pick up the generated document directly from the company’s ERP system, or they can transfer it to them.

3. The EDI provider converts the document into an X12 EDI transaction set. After conversion, suppliers receive an EDI X12 document.

What is the Fastest Way to Connect to EDI?

With EDI2XML and its “HTTP EDI Web Service (REST API)” model, companies can connect their EDI partners in less than one hour! EDI web services reduce the cost of EDI integration projects and improve efficiency and accuracy in a short amount of time.