What is EDI?
EDI, or ‘electronic data interchange’ is a system that enables suppliers and customers to communicate easily on an electronic platform. That short definition belies the importance of EDI and the benefits that organisations achieve from its use.
What is EDIFACT?
EDIFACT is the international standard for EDI (although North America uses ANSI X12). Each EDI document has unique designation reference.
How does EDI work?
EDI can be defined as the transfer of structured data from one computer system to another based on an agreed-upon message format. By adhering to the same standards/formats, EDI-capable companies can electronically exchange documents, such as purchase orders, invoices, shipping notices, etc., without human intervention.
Benefits of EDI
Companies using EDI:
Respond quickly to the disruptions that damage sales and relationships
Make more-accurate documents and forecasts
Reduce manual data entry, as well as the errors to which this is prone
Free up valuable office resources to focus on more important business functions
EDI is cheaper than traditional paper methods
A paper-based order can cost $70 or more per transaction, while the more efficient electronic transactions are processed for less than a dollar. Online EDI solutions eliminate hidden costs when compared to packaged EDI software. Cloud-based EDI solutions save an average of 25–75% in upfront costs, plus 50–75% in long-term expenses like software updates and hardware upgrades.
“With SPS we can process purchase orders in 3 hours as opposed to two weeks!”
System Administrator, SM Brands
Getting started with EDI: Questions to ask before you start
Who are my trading partners?
Trading partners may include suppliers, third-party warehouses, carriers, sourcing offices, banks and many others. Any business that needs the data to fulfill an order or provide a service should be included.
Why invest in my supply chain?
Though often overlooked, the supply chain is an increasingly important strategic asset that can predict the health of an organisation’s bottom line and growth opportunities. The supply chain’s contribution to revenue increased from 4% in 2011 to 8.5% in 2012. *2012 CSC Global Survey
What business documents do I want to exchange?
The standard messages support a variety of business processes from POs to payments as well as capturing the status of a shipment and gaining visibility into your suppliers’ inventory.
In-house or outsourced EDI?
- Requires software
- Requires hardware
- Requires knowledgeable resources in-house
- Requires ongoing support within the organisation to preserve EDI capabilities
- Must develop and maintain maps and requirements for each trading partner connection
Outsourcing takes most of the IT work off your shoulders. An online EDI solution requires no hardware or software to support the exchanging of the messaging.
Why trading partners trust SPS Commerce
As the leading retail-focused supply chain management network in the business, we are the trusted authority for thousands of EDI trading partners
Our team of experts can help you achieve EDI capability and 100% compliance with trading partner transaction requirements.
The largest retail network
We’re the retail industry’s largest trading community with more than 60,000 customers in over 60 countries, including thousands of connections in Australia.
Expert local support staff
Available when and where you need them, via self-paced online tutorials or in-person training sessions. SPS has local Australian specialists with decades of industry experience.
“SPS not only provides us with innovative technology but also an unmatched depth of expertise in the retail industry.”