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What Is Electronic Data Interchange?

By Author: Edmund Brunetti
Total Articles: 557

Electronic Data Interchange (EDI) is one of the most secure ways for your business to transfer documents and data business to business. While it is a form of network process, EDI follows a globally standardized procedure and format which allows for secure encryption without data destruction. This can become important when the data you need to transmit and exchange may be required to hold a form or standard to be considered legally viable. Even in instances when the data exchange is no different from packet assembly found with normal data exchanges, EDIs standardized protocol offers more security than other platforms.

How secure is EDI?

EDI was designed to support the data exchange of information sets in which security is paramount. This includes invoice and payment information, membership identifiers and legal documents. It is heavily used by the manufacturing, automotive, retail, transportation, logistics, banking and medical industries in which the transfer of secure and encrypted documents is essential to their performance and client satisfaction. More and more businesses are adopting electronic data exchange as a means of increasing their overall security when it comes to their accounts information and development processes. In fact, there is no business that cannot benefit from using an EDI system.

What can it replace?

While originally put in place to secure supply chain, financial, medical and personnel information, electronic data exchange allows you to make sure that all of your communication is kept private. As it holds to non-destructive data standards it can be used to send anything that you once had to use a fax or regular post to send. There are many different levels of encryption and access available from the generally secure to high level protocols that can also protect the validity of signatures.

What about backups and files?

One question that comes up frequently with companies is how well electronic data exchange can integrate with backup systems. Depending on your provider, the backup system options can vary. One thing that is important is the archiving of the log and batch file. This file acts as a history of everything that was sent and received. It is not only used to analyze the performance of your EDI network, but it also acts as an additional backup security. Your industry may still require that you hang onto paper files, but once they are scanned and sent - it can be easier to make managing hard files doable.

What does it take to implement?

For a process that has a global standardization and can offer so much to a company with its security, it is surprisingly easy to implement. There isn’t much on the company end that has to be changed, as most of the EDI management occurs on the backend that is managed by your provider. This is another reason why switching to electronic data exchange can help to streamline your overall operations budget. As all of your transactions and data transmissions begin to route through the EDI vendor you will also get a key return log that will help you to define your chain better as well.


For gathering more info about Electronic Data Interchange, also known as EDI, please check out this link.

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