Electronic Data Interchange | Meaning

What is EDI?

EDI stands for electronic-data-interchange. In this digital era, everyone and everything is dependent on the internet, and the best example is the Digital India concept. The exchange of information or communication is done through the internet, whether by texting friends via Whatsapp or sending important details through emails.

Let us explore the importance of EDI with an example. Is it possible to write a letter always to your friend to communicate with each other? It won’t work in all cases, right? With the internet, everything is possible in this modern era. Considering the case of businesses, the exchange or communication of information will be mandatory on a day-to-day basis. Using the old way of communication is not a good and safe option. There will be a lot of information or data that has to be stored secretly, and here is where EDI plays its unique role.

Electronic Data Exchange is the exchange of important information or business documents via the internet in a safe and easy way. If two companies need to exchange information sitting at two different corners of the world, they can interchange data (orders, invoices, etc.) using EDI.

Who are the EDI users? The State and Central Government agencies, Banking sector, Manufacturing companies, Retail servicing companies, Insurance, Healthcare, etc.

How can EDI accomplish its task? The sender sends the information or documents that gets translated into an EDI format. The receiver receives this EDI format that gets translated to the original format on the receiver side.

EDI Advantages

  •       Reduced usage of paper format.
  •       Increased Speed
  •       High Security
  •       Less cost and accurate information.
  •       Improved data quality.