What is EDI? How Can I Benefit from EDI?

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As a relatively new marketing professional in an ERP sales company, I am exposed to a barrage of IT acronyms and terms that are unknown to me. In these situations, being a relatively intelligent person, I generally put on my best poker face while simultaneously Googling the unknown acronym or term and committing it to memory.  This is part of my learning process, and I embrace it without shame, as should you - learning is cool by anyone’s standards. The acronym of the day is EDI. Let me share what I have learned in my research, and if you are a company looking to enhance your knowledge of EDI and how it can help your business, then I hope this article is of some help. In business terms, today’s EDI definition can actually be phrased: the transfer of structured business data from computer-to-computer, by agreed electronic message standards, between business partners without human intervention. Generally in common business practice the flow of this paperwork is manual, complex and extremely susceptible to human error. Just look at all of the points where errors can occur in the image below.

CIS Provides EDI, EDI for ERP

Common business data flow performed manually

Here is a nice breakdown of the general terms used in the above definition to further your understanding of EDI. Business Data includes the general documents used in the flow of business and include: (some with their applicable ANSI codes)

  • 810 Invoices
  • 850 Purchase Orders
  • 855 PO Acknowledgement
  • 856 Shipping Notice / Manifest
  • Inventory Documents
  • Bill of Lading
  • Payment Documents
  • Custom Documents

Computer-to-Computer communication processes in EDI replace any information that has to be produced, transmitted and then re-entered by humans. Business Partners in the EDI definition are the companies, or trading partners, who are receiving mutual benefit from the trading of goods and services while also attaining maximum profitability. Message standards in electronic communications are a natural necessity of computer language. This goes back to basic networking and computer “hand-shaking” to start a data transfer - remember when your dial-up fax or modem used to make that squawking sound?  Very similar to that but much more quiet these days. A few technical acronyms to throw around when discussing EDI protocols with IT professionals are: ANSI, EDIFACT, TRADACOMS and ebXML, just to name a few.

Here is a fantastic video produced by TrueCommerce EDI Solutions to help explain the history and benefits of Electronic Data Interchange:

EDI translators are utilized so data between two communicating computers can get processed into usable information for ERP applications - such as Microsoft Dynamics GP.   Custom Information Services (CIS) just happens to specialize in the sales, service and support of these applications and all supporting IT services needed to efficiently run these applications and EDI services. This point brings me to listing some of the key benefits for a vendor who utilizes EDI:

  • Reduces or eliminates manual data entry errors
  • Streamlines transaction processing
  • Increases productivity without increasing staff
  • Decreases Lost Revenue
  • Decreases Lost Opportunity
  • Increases Vendor Reputation

I hope this gives a good insight and overview into what EDI means, and encourages you to ask us questions about how EDI can help your business.

Find out more about EDI (Electronic Data Interchange), Microsoft Dynamics GP, Managed Services and additional software solutions for business: Custom Information Services (CIS) is your best source to learn about EDI, supply chain and distribution technologies that will advance your productivity and keep your competitive edge in a demanding market.  Visit our website to try Microsoft Dynamics GP for free! You can also reach our certified team of consultants and sales professionals at 817-640-0016 or via email at [email protected]. We have been helping business implement technology since 1989 and are a Certified Partner for Microsoft Dynamics GP.

by Custom Information Services

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