What is EDI?
In short
EDI (electronic data interchange) is automatically exchanging business messages such as orders, order confirmations, delivery notes and invoices between trading partners' systems. The messages follow an agreed standard, such as UN/EDIFACT or the GS1 standards, so both systems process them without manual work.
How does EDI work?
With EDI, one party's system creates a message, for example an order, in an agreed format. That message goes via a secure connection or an EDI service provider to the trading partner, whose system reads it in automatically. Then an order confirmation comes back, a dispatch advice when the goods are on their way and finally an invoice. Nobody retypes anything.
Well-known standards are UN/EDIFACT from the United Nations, the GS1 standards widely used in retail and logistics, and XML formats such as UBL. For e-invoices, Peppol is increasingly used.
When do you need EDI?
It is often a requirement of a large customer: supermarkets, DIY stores, wholesalers and logistics providers want to receive orders and delivery notes via EDI. With many orders a day between regular partners, EDI also saves a lot of manual work and errors.
EDI or API?
An API usually connects two systems directly and at any time. EDI is older and focused on standardised trade messages between businesses, often via an intermediary that translates and stores messages. More and more EDI service providers offer both. Ask your trading partner which messages and which standard they expect, and whether your ERP system or WMS can process them.
Which software helps with this?
EDI usually runs via an EDI service provider or integration software that translates the messages for your ERP system. Ask which messages and standards your trading partners require.
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