EDI Basics
Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents between companies. EDI proves to be fast, reliable and a cost saving business practice that can reduce your companies carbon footprint.In EDI, information is organized according to a standard format (ASC X12) published by the American National Standards Institute (ANSI). International EDI standards are known as EDIFACT standards. Each year these standards are reviewed and updated to accommodate new business and ensure accuracy. Versions of these standards are published by The Data Interchange Standards Association (DISA). Typically new versions are adopted by Hubs every few years.The process of using EDI is very straight forward, a standard document (agreed upon by both parties,) is translated into a specific format and sent (or received) via a secure communication (data transport) method. The data is broken into small segments ie: Ship To – Name and Address or Product Identifiers depending on the type of business you are involved with. X12 covers all industries with approximately 500 different document types.
EDI Terms
Trading Partner or Hub is the company with whom you are exchanging documents.
Interchange ID is a unique number that identifies you (versus your trading partner). Typically, this is assigned by your trading partner or Network service.
Network is another name for communications of data transport. Your data (aka document) travels over the internet to the company you are trading with.
Document Types are established by ASC X12. An example of a document type number is 810, which in business language refers to a standard Invoice.
ANSI, established in 1918. The American National Standards Institute’s mission is “to enhance both the global competitiveness of U.S. business and the U.S. quality of life by promoting and facilitating voluntary consensus standards and conformity assessment systems, and safeguarding their integrity.”
Communication / Data Transport. EDI is transported via a number of communication options. The choice of which form of data transport is used tends to be driven by the Hub. A Hub example are companies like Walmart, JC Penny, Home Depot or a government agency. Always check with your trading partner (Hub) to see what forms of communication they accept. If you have a number of trading partner relationships, analyze your best ROI (return on investment) across the board.
Value Added Networks (VANs) have been the traditional mode of data transport. The primary benefit VANs offer is to monitor transmissions and resend data upon your request. The down side is that a VAN service may be costly. VAN service setup times tend to be 48 -72 hours. Configuration can be easily accomplished by a person with limited IT savvy.
AS2 EDI over the Internet (EDIINT) is very popular these days. The benefits include a lower cost and reliable data. The challenges include a need to set up an open / persistent connection in your fire wall, as AS2 is “always listening”. This configuration needs to be completed by someone with IT experience. There are annual costs for the software but overall it is more cost effective than a traditional VAN. Some VAN’s will offer AS2 and FTP as part of their services. Depending on the number of trading partner relationship and the amount of data you are sending, a VAN might be the way to go. We advise you to be a smart shopper and weigh your options.
File Transfer Protocol (FTP) is an excellent choice for communication. FTP is simple to setup, data is clean and error messages are clear. For example: if there is a failure in connecting. The one time setup costs are minimal.
EDI E-Mail can be use by Qualedi Software as well. Like FTP one time setup and costs make this an excellent option.
SFTP Secure File Transfer Protocol is a network protocol that provides file access, file transfer, and file management functionalities over any reliable data stream.
Web Service Is a method of communication that allows two software systems to exchange data data over the internet.
EDI 858 This X12 Transaction Set contains the format and establishes the data contents of the Shipment Information (858) for use within the context of Electronic Data Interchange (EDI).