What is EDI?
Learn more about how Axway helps enterprises manage and draw value from their APIs: https://www.axway.com/en/products/b2b-integration/webedi-supplier-portal Discover why Electronic Data Interchange (EDI) remains a cornerstone of modern digital business—even in an era dominated by APIs and cloud integrations. This video breaks down the evolution of EDI from its origins to its critical role in today’s global supply chains, finance, and healthcare industries. Key takeaways: 👌EDI continues to power critical business processes. ✅ EDI streamlines workflows like Order-to-Cash and Purchase-to-Pay, reducing errors and turning days of communication into hours. ⏱️EDI is adapting to modern tech and will remain a foundational part of digital business. [Full video transcript] Back in the 1960s, electronic data interchange, or EDI, delighted businesses looking for a secure, standardized way to share structured documents electronically and streamline communications with trading partners. It didn't take long before EDI formed the basis for a communication nervous system connecting enterprises in supply chains, healthcare, finance, and other critical industries. Ultimately, EDI is just a text file that transmits information in a standardized language understood by business systems. Today, sharing data electronically powers every aspect of global commerce, thanks in large part to the widespread embrace of API technology and cloud-based integrations. Yet, it's these – and future – integration technology advancements that have sparked debate about the continued viability of EDI. So, let's set the record straight. Regardless of modern communication methods, EDI’s value in standardization and structured approach will always be appreciated. Case in point: some B2B integration customers are seeing more than 10% annual growth in EDI transactions. Think about the everyday business processes that keep companies running – like when a grocery store needs to restock its shelves. These workflows involve tons of back-and-forth communication: purchase orders, invoices, shipping notifications, payment confirmations. Traditionally, this meant phone calls and emails flying between companies – slow, error-prone, and expensive. EDI transforms these core business processes by automating the entire communication flow. Let's look at two key examples: In an Order-to-Cash process, let’s say that same grocery store places an order for cans of tomato soup. EDI automatically sends that purchase order to the supplier, who responds by acknowledging the order. When the pallets of soup ship, a shipping notice goes out automatically. The invoice follows seamlessly, and payment confirmation closes the loop – all without human intervention. Now, let’s say that particular brand of tomato soup has been flying off the shelves this season. In Purchase-to-Pay processes, when a company's inventory hits reorder levels, EDI can automatically generate purchase orders to suppliers, receive delivery confirmations, match invoices to orders, and even trigger payment approvals. What used to take days or weeks now happens in hours. To make this seamless communication possible across different companies and countries, EDI relies on standardized formats and protocols. EDI is built on well-established security and standardization protocols. Among these are X12, widely used in North America for supply chain transactions, and its UK counterpart TRADACOMS used in supply chain networks as well as retail data exchanges. Others include AS2 and AS4 – protocols for secure internet-based data exchange – and EDIFACT – a global standard for international trade. By following these standardization protocols, businesses can leverage EDI to communicate seamlessly – and securely – with all stakeholders in their partner ecosystem, taking operational efficiency to new levels. Seamless communication and efficiency are only two of the advantages that have solidified EDI's role as an indispensable mainstay of digital business. Enterprises rely on EDI to deliver: Security. It's designed to protect sensitive data through encryption and compliance with industry standards. Standardization. It reduces manual work and eliminates human error in document processing. And compliance. EDI supports regulatory requirements in industries like healthcare, finance, and retail. Many companies have shown that EDI flows absolutely have a place in modern communications. API-powered EDI integration, together with API-driven cloud platforms, are now enabling enterprises to modernize their digital business infrastructure without disrupting their existing EDI workflows. The key is adopting a consistent platform approach to manage the complexity. The thing to remember here is that EDI is not going anywhere. It's evolving with the times and just getting better. If you want to learn more about why, Axway can help. #EDI #Tech #Axway #SoftwareDevelopment
