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Electronic data interchange (EDI) is the computer-to-computer exchange of structured business data using agreed message standards, with minimal human intervention. Unlike sending an arbitrary digital file, EDI relies on shared data definitions, a common syntax, and standard messages so each partner’s system can interpret a transaction consistently.
What electronic data interchange means
The United Nations Economic Commission for Europe (UNECE) defines EDI as “computer to computer interchange of data according to a message standard with a minimum of human intervention.” Its examples include purchase orders, invoices, and customs declarations. UNECE explains the EDI definition and examples.
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EDI is not simply the electronic delivery of a document. For an exchange to work, the participating organizations need compatible definitions of the data, a shared syntax, and standard messages that organize the data for a business purpose. UNECE describes these building blocks of UN/EDIFACT.
How an EDI transaction works
- A business application creates a transaction, such as a purchase order, or receives one from a partner.
- The transaction is represented in a message standard and follows any implementation guide or partner-specific requirements that apply.
- The receiving system interprets the message and uses its structured business data in the relevant process.
Standards define the content and structure of transactions; implementation guides explain how a transaction set applies to a particular business purpose. The shared format helps systems exchange recognizable business information, but does not by itself guarantee that every partner uses identical requirements.
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Common uses of EDI
Organizations use EDI for recurring, structured exchanges between business systems. Common examples include:
- Placing and processing purchase orders
- Sharing shipping and receiving information
- Sending invoices and payment information
- Applying cash to accounts
- Submitting customs declarations
ASC X12 standards address processes including order placement, shipping and receiving, invoicing, payment, and cash application. ASC X12 describes its standards and business processes. UNECE also cites customs declarations as an EDI example.
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EDI standards: UN/EDIFACT and ASC X12
EDI is a general approach to exchanging standardized business messages; it is not one single format. Two standards organizations and their work are especially relevant:
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitches| Standard or organization | What it is | Details |
|---|---|---|
| UN/EDIFACT | A global Electronic Data Interchange standard developed and maintained by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). | The UNECE Executive Guide reported 209 business messages in 2023 and said updated versions are published twice a year. Those figures describe the guide’s reporting, not a permanent message count. See UNECE’s UN/EDIFACT guide. |
| ASC X12 | An ANSI-accredited, consensus-based standards-development organization. | Its standards and guides cover transactions such as orders, shipping and receiving, invoices, payments, and cash application. See ASC X12’s standards information. |
Which standard matters depends on the transactions and requirements that an organization must support, including the needs of its trading partners.
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What to consider when implementing EDI
Choosing an EDI approach starts with the operational requirements, not with an assumption that one setup suits every organization. Consider:
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- Standards and transactions: Identify the standards, message types, and partner-specific implementation guides required for each exchange.
- Business-system integration: Determine how EDI messages will connect to existing applications and processes.
- Operations and maintenance: Decide who will monitor exchanges and maintain the translation and data flows.
- Operating model: Compare running EDI in-house with using a hosted service. ANSI’s overview of an X12 primer identifies this as a decision for business leaders. Read ANSI’s ASC X12 overview.
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