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What is EDI ?
Short for Electronic Data Interchange, the transfer of data between different companies using networks, such as VANs or the Internet. As more and more companies get connected to the Internet, EDI is becoming increasingly important as an easy mechanism for companies to buy, sell, and trade information. ANSI has approved a set of EDI standards known as the X12 standards. EDI cannot be activated with a flip of the switch or in a moment's notice. Many procedures must be carried out in preparation for exchanging EDI data with a trading partner.
Can't I just use e-mail?
Email differs greatly from EDI because the data in Email is in an unstructured format. EDI is in a structured format where everybody who are using it agree on that same file format.
Whether you use a service based solution or in-house software, you will need to format the data to your trading partner's specifications. The formatting process, called mapping. Implementating EDI usually consists of trading partner questionnaire, which needs to be filled out and returned. This is the first step in establishing a trading partner relationship. Please note that even though all of your trading partners may be using X12 standards, EDI guidelines are not universal. The map created for Company A's invoice cannot be copied and used for Company B, as Company B likely has its own criteria. As a result, you will need an implementation for every trading partner.
Communication between trading partners
Communication between trading partners can be accomplished by VAN or using direct communication.
VAN (Value Added Network)
VAN provides services such as message delivery, extra security 24*7 . It's like a mail box where you put all your messages and the VAN pick it up and send it to the appropriate party.
allows you to transfer the data straight to the receiving party. usually it's done using FTP, VPN (Virtual Private Network), or EDIINT (EDI Over the Internet).
What does the software do?
The software has three parts, the EDI engine, mapper and translator. mapper - map the data from your end (i.e Accounting software, database, customer software) to our database so each field in your software will be assign to a specific field later on in the EDI file.
translate the data from your software based on the information the mapper mapped earlier and put it in EDI format. it does all the validation of business rules and checks and extract data into an EDI file format.
send an EDI file extracted earlier by the translator to the VAN.
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