EDI – electronic data interchange – is a modern way of communication between business partners, in which business, logistics and other documents (e.g. orders, despatch advices, invoices, etc.) are exchanged electronically in structured formats.
No PDFs sent by e-mail. ERP systems are able to load these formats automatically without the need for manual rewriting. Exchange of these messages usually takes place over secure communication channels with a high level of feedback.
Let's use a practical example of EDI usage: an order created in the information system of a buyer will be automatically transmitted into the information system of a supplier.
The example with the order accurately captures the main idea of EDI. The customer created an order in their information system. The document exists in electronic form. Why not allow the supplier to work directly with this electronic document? If you print the order from your system, send it in an envelope, fax it or send it by e-mail in a readable format, the other party has no other option than to manually rewrite it again into their system. However, in the case of handing over an electronic document, it is possible to automate the receipt of the order.
The goal of EDI is to gradually replace paper documents with electronic ones, thus reducing costs associated with their exchange and at the same time, increasing the efficiency and quality of the processes performed. EDI documents have the same legal weight as "paper" documents. Various information systems inside and outside the company can be connected using EDI.
To this day, many national and industry standards have been defined for EDI communication, such as ODETTE in the automotive industry or SWIFT in banking. However, these standards are incompatible with each other, which is why the only international standard for electronic data transmission has been created – UN/EDIFACT.
The issues of securing data transmitted via EDI are addressed both in software directly in the EDI systems and by using cryptographic methods (encryption, keys, digital signature) for communication between systems and, last but not least, by implementing digital signature and encryption directly in EDIFACT messages.
You can find more information on the EDIZone information portal dedicated to electronic communication: www.edizone.cz.