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This blog covers the below mentioned options and it will help us to understand clearly about EDI.

What is EDI & Why does business use it?

  • SAP XI/PI and EDI
  • What are EDI Standards
  • The Flow of Electronic Documents

EDI Definition:

Electronic Data Interchange (EDI) is the exchange of business data from the computer of one enterprise to the computer of another enterprise using a standard format like PO, Invoices e.t.c. I.e Intercompany Electronic Exchange of Business Documents in a Standard Format.

EDI is used with trading partners who are EDI capable and use EDI as a technology to improve the efficiency of their business.  Not all trading partners are EDI capable or choose EDI as their technology of choice.

EDI 1.jpg

Why does Business use it?

  • Increased business opportunities
  • Reduced inventory
  • Lower data entry costs
  • More accurate records
  • Decreased mailing costs
  • Reduction in order time
  • Better cash management


             Paper Document – average cost is $50
             EDI Document – average cost is $4

EDI 2.jpg

What are EDI Standards:

Allows electronic interchange of data between many business partners without the re-development of new a proprietary interface with every partner
Provides a comprehensive, generic description of all possible components of a (paper) business document

EDI 3.jpg

ANSI X12 :

  • American National Standards Institute (ANSI)
  • Cross-industry general business standard
  • Used throughout North America & Canada
  • X12 Versions 003020 and 004010 is preferred when trading EDI with Suppliers
  • Can accommodate any customer version


  • EDI For Administration, Commerce, and Transportation (EDIFACT)
  • Used throughout Europe and Asia, and by some international companies in North America
  • EDIFACT version D97A is preferred when trading EDI with suppliers
  • Can accommodate any customer version


  • Trading Data Communications (TRADACOM)
  • Tradacoms is an early standard for EDI primarily used in the UK retail sector and one of the precursors of EDIFACT
  • Tradacoms versions are V8 and V9
  • Can accommodate any customer version


  • The Society of Worldwide Interbank Financial Telecommunication (SWIFT)
  • operates a worldwide financial messaging network which exchanges messages between banks and financial institutions
  • SWIFT linked 8740 financial institutions across 209 countries
  • A list of Document standards are
    • Customer Payments & Checks
    • Treasury Markets–Foreign Exchange, Money Markets & Derivatives
    • Documentary Credits & Guranatees
    • Cash Management & Customer Status


  • RosettaNet is an organization set up by leading information technology companies to define and implement a common set of standards for e-business.
  • A Partner Interface Process (PIP) is a message model that depicts the activities, decisions and partner Role Interactions that fulfill a business transaction between two partners in a given supply chain.
  • RosettaNet consists of a consortium of major computer, consumer electronics, semi-conductor manufacturers, telecommunications and logistics companies.
  • The RosettaNet document standard is based on XML and defines message guidelines, business processes interface and implementation frameworks for interactions between companies.


  • The Electronincs Industry Data eXchange association
  • Most major electronics companies in North America are members
  • Education, Develop Business Models and Guidelines on how best to implement the ANSI X12 and EDIFACT standards and more recently XML within the RosettaNet standards


  • Computing Technology Industry Association
  • A global organization which represents 7,500 computer hardware and software manufacturers
  • EIDX & COMPTIA now host joint meetings for mutual benefits

Counterparts to EIDX :

EDIFICE (European) – EDI  For Companies Interested in Computing and Electronics
EDIMAN (Singapore) – EDI for MANufacturing
EIAJ (Japan) – Electronics Industry Association Japan  standards and more recently XML within the RosettaNet standards

Reference Links:

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    1. Former Member Post author

      Hi Mastan,

      Thank you so much for your valuable comments.

      I request you to post many documents in SDN. It helps to increase knowledge and career growth.


      Hari Suseelan

    1. Former Member Post author

      Hi Srinivas.

      Oh is it! If you require any other details please let me know. I will consolidate and send things.


      Hari Suseelan

      1. Srinu S

        Hi Hari,

        Thanks for considering. Please post some more details related middle ware tools in your next post.




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