EDI refers to electronic data interchange (EDI). In IT, this is a collective term for data transfer by means of electronically supported transfer processes. The EDP systems of the companies or organizations involved act as sender, transporter and receiver of the digitally processed data. An EDI standard is required so that the data records sent can also be processed by the recipient. This can be developed specifically between sender and receiver, i.e. the companies exchanging data, or it can be based on a standard “proposed” by industry associations.
Without the use of digital communication, the sender of a shipment of goods hands over the recipient’s address data to the transporting company manually – by telephone, for example. The carrier must then also manually enter this data into its own system. In the digital process using EDI, the shipper’s system sends the data directly to the carrier’s system. In order for the two systems to communicate with each other and exchange data records without errors, the specific standards of the EDI data record must be defined between the shipper and the receiver.
Purpose of overlapping EDI standards
A shipper usually works with more than one transportation company, just as the transportation company has business relationships with more than one shipper. Companies and organizations also use different systems. For the smooth exchange of data via EDI, a separate communication interface, also called a converter, would now have to be defined for each system between the parties involved. Such a provision of different, individual converters is uneconomical for the parties involved, which is why there is the very widespread standard EDIfact. This was developed by the United Nations (UN) as early as 1986.
The respective EDI standard specifies the communication structures and defines uniform exchange formats for the information and documents. The classic paper documents are replaced by digital documents. These documents are then available in the EDI standard and are sent to the addressee in this way. The specifications defined in a standard describe the exact digital structure of different business documents, which can then be exchanged smoothly between the various systems involved in the process chain.