EDI 101


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.

View our EDIFACT document list

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 inventory

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!”

Rowland Kubale

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

Outsourced EDI:

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.

Looking to switch your EDI system?

Read about outsourced EDI, and see our list of popular Australian pre-made ERP/Accounting System adaptors (complete list at our global site).

Why trading partners trust SPS Commerce


Unmatched expertise

As the leading retail-focused supply chain management network in the business, we are the trusted authority for thousands of EDI trading partners


Pre-wired connections

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.”

Mark Hopkins

Director of Information Technology, Skullcandy


Fulfilment EDI products:

Our Fulfillment solutions enable you to seamlessly manage orders, shipments, payments and returns. Implemented by our Australian project team, backed by the global resources of SPS Commerce.

WebForms EDI

Cloud-based EDI, quick implementation, best option for small businesses. Start trading as quickly as today!

Integrated EDI

Integrate with more than 100 accounting, ERP, WMS, and TMS systems to automate transactions, including drop ship

EDI Testing + Certification

Achieve compliance quickly to begin trading data electronically

Contact SPS and discover how EDI can help your business