With digital transformation gaining surge, the need for adopting EDI integration technology has become more than ever.
Companies employ EDI integration software ride the digital transformation wave through automation. EDI helps automate B2B data exchange processes, thus streamlining electronic trading between various business ecosystem components including customers and partners.
In this blog, you’ll find what EDI integration is and what are its benefits.
Understanding Electronic Data Exchange
Electronic Data Interchange (EDI) involves the computer-to-computer exchange of information among different types of partners in a standard electronic format. EDI integration allows organizations create and manage smoother and robust relationships with customers as well as partners, helping them grab larger market share. A multitude of businesses can also make use of EDI technology and savor benefits such as automated workflows, improved operational efficiency, alleviated overhead costs, improved productivity, fewer errors, and more.
EDI documents include crucial information about a number of business transactions. One of the most popular EDI transactions include the process of retailer submitting a particular purchase order, producer providing an invoice, and ultimately retailer and manufacturer exchanging receipts.
Another popular example of EDI transaction includes sending an advanced shipping notice (ASN) that facilitates tracking and packing, and a notification sent when a shipping delivering goes pending. Other than that, North American standard such as ANSI X12 or X12 consists of departments like finance, transportation, supply chain, and insurance. European standard, known as EDIFACT, is one of the most common standards.
EDI involves a lot of standards that have been set up to define structured data and rules that are present within a particular record to facilitate the document creation process. These EDI standards support organizations to do away with the need for investing a huge sum of time as well as resources, alleviating electronic document integration costs and streamlining processes.
EDI integration software allows organizations meet their end-objectives through automation and effective B2B integration capabilities for supporting emerging business requirements. Primarily, EDI integration enables workflow automation to give a boost to operational efficiency as well as productivity and enhance the quality of customer relationships,
irrespective of the industry.
To understand how EDI integration functions, you’ll need to delve into the following steps:
1. In the first step, a purchase order is converted into a particular EDI format. This conversion is done with the aid of a data transformation mapping solution or various EDI translators.
2. Then, the document is run with the help of validation software to support structural accuracy.
3. Following that, data is extracted from the EDI document, purchase order, in this case, is transferred to a VAN using a plethora of communication tools like AS2, SFTP, etc. Then, the extracted data is straight transmitted to the client or built into validation software.
4. Finally, the receiver receives the document, which is further verified, authenticated, and decrypted.
EDI Integration Benefits
EDI integration offers a number of benefits. Let us find out what these benefits are.
- In the past, business documents were exchanged manually. This included a paper-based exchange. But, presently documents are exchanged with the help of automated EDI technology that fastens processing and removes overhead costs. They can evade SLA violations, delays, etc. by abiding EDI standards.
- EDI integration software helps companies gain an edge over others by reducing processing time and speeding up business cycles. Along with that, order-to-shipment cycles are shortened up to 60% and transaction speed increased up to 80%.
- Operational efficiency accelerates with EDI. With EDI integration, companies don’t have to rely on manual processing methods for meeting customer expectations. As a result, customer satisfaction and loyalty increases.
- EDI enables enterprises data exchange with ease and accuracy. Back in the end, companies were compelled to enter information manually using an ERP system. This was the reason why processed data were not accurate. Now, with the introduction of modern EDI integration solutions, the level of accuracy has increased.
- With improved tracking and audit features, modern EDI integration offers safety and security to companies. In fact, EDI enables enterprises to access authenticated users. In addition, enterprises can share documents with available communication protocols and security standards, thus ensuring compliance with mandates in global business.