EDI is a set of standards developed in the 1960s that defines common formats for information to be exchanged electronically between two organizations that do business together—or “trading partners.” In practice, it allows companies to speak the same language electronically and communicate more efficiently.
Before EDI was widely adopted, companies conducted business by sending paper documents using mail and couriers. Even with access to modern technology, some still operate using these paper-based processes. EDI eliminates much of that manual processing – and the inefficiencies that come with it – by automating the electronic flow of the same information in packets of formatted data. Documents exchanged through EDI may include invoices, purchase orders, advance shipping notifications, student transcripts, healthcare claims and many more.