Electronic Document Interchange - what is it and how to implement it?

EDI helps many companies everyday to reduce resources needed to achieve the same same or even better results.

EDI, also known as Electronic Data Interchange, is a way of exchanging documents between different companies. It doesn't involve the regular ways of sharing documents, such as sending a paper copy of it.

How does it work?

The EDI is a way of fast and cheap communication between different companies. It can also be referred to as a system (or standard format), which allows enterprises (that are separate entities) a quick sending of documents, such as invoices, orders and many more. In general, the companies are using some standard formats, such as PDF.

The system might sound as if it was equal to regular email, but it's not. While the mails have to be operated by humans, EDI is fully electronic.

Thanks to EDI, the information is sent straight from one enterprise's application to the other. It's way easier and cheaper than the regular option with sending documents via post.

EDI implementation

The process might be hard to achieve for some companies - especially those, which didn't carry out the document digitization process. In order to implement EDI, firstly they have to move all the data to special applications - created with Ruby on Rails or other, similar technologies.

What is more, the companies need to adapt to the changes in law immediately, in order to avoid legal problems. Those issues aren't the only ones that can be met during the EDI implementation process. We can also easily assume that every party of EDI can have their own requirements, standards etc. Finding a way to adapt to needs of every party is a hard process, one that might take some time and effort. In general to fully implement EDI, one needs an app, which will be able to translate/map the data into a commonly used format and apps, which will allow to pack and unpack the files.

That being said, using the Electronic Document Interchange process is beneficial to all the parties. Even though there might be some problems, it's definitely worth a shot.
 

Electronic Document Interchange benefits

The process has many benefits, which makes it worth a try. First of all, it's cheaper than sending communication via standard post or courier route. There are some costs to be incurred in order to implement EDI, but in general, it allows for some significant savings. The company doesn't have to pay for envelopes, stamps, printing bills of lading, as well as the postal service itself.

What is more, the whole process is way faster. Even the extra fast (and also extra expensive) courier services, which are designed to deliver the package at the same day, can't beat sending the document through EDI.

As mentioned earlier, regular processes, such as sending documents via e-mail or even post require participation of a human factor in the process. Due to that fact, the risk of error raises significantly. EDI is operated fully electronically, which means there is no space for human mistakes.

The above mentioned benefits from using functional EDI are just the most common ones - the list is longer than that. Every modern company should consider this method of data transfer.
 

Sources:
- https://www.edibasics.com/what-is-edi/
- https://www.edibasics.co.uk/implementing-edi/
- https://www.ibm.com/pl-pl/supply-chain/edi-electronic-data-interchange
- Images: pixabay