EDI 101 – Optimizing Business Communications

How is EDI used by businesses? Businesses today rely upon fast transactions between trading partners.
For example, getting product components or supplies to keep their business running. A warehouse needs to keep its inventory accurate. A car factory needs bolts, metal frames, and many other components.
Each business must be efficient in relaying their needs through the supply chain. At the same time they must avoid costly data errors. That is why electronic data interchange (EDI), became a business standard.
EDI refers to the exchange of business documents from one computer system to another. The documents exchanged include things such as ship notices, purchase orders and invoices.
The benefits of EDI systems are many. EDI is fast, reliable, and replaces the mailing and faxing of documents. Also, it reduces cost associated with paper processing. There are three steps to break down how EDI software works.
Step 1:
EDI requires electronic files. It is necessary to get and organize the data to send. For example, this might include exporting data from spreadsheets or reformatting reports.
Step 2:
Translating EDI documents into the correct format is the second step of the process. This stage requires feeding electronic data through translator software. The software converts the data into the correct EDI format.
The other option is to use an EDI translator service provider. In this case, you would send your data to the provider to handle the translation.
There are many EDI standards today:
  • and more
For this reason, it can be difficult to choose the right one. Some formats are specific to region or even industry. Those getting into using EDI should consult a partner specializing in EDI. Their experience makes communications process effortless.
Step 3:
This stage is where you send your EDI files to your business partner. First, you’ve ensured the business documents are in the correct EDI file format. Next, you must connect to your partners directly for computer to computer exchange. There are several options for this connection.
  • Secure internet protocol
  • EDI Network provider (aka VAN provider)
  • A combination of both
You EDI partner can guide you through setting up the proper point-to-point connection.
So, how is EDI used by businesses? In short, EDI eliminates the need for manual communications processes. Specifically, manual data entry and mail, email, calls and faxes. A standard EDI format and translator ends miscommunication.
Radley’s software platform offers a variety of flexible and affordable EDI software. Real time, B2B integration is possible. Rely on our 40 years of experience to show you how! Contact a product specialist today to start streamlining your business processes. Or visit our resource page, What is EDI?.