What EDI Software Is and How It Can Help Your Business

Data is at the heart of how most organizations operate in the modern business world. So, having robust systems for handling that data is important. In commercial transactions, especially those involving e-commerce or that are otherwise digital, EDI software is a must-have to manage the exchange of data. Understanding what EDI software is will help you to create a more successful enterprise.

Electronic Data Interchange

EDI is short for electronic data interchange. As the name suggests, it is all about exchanging data. In particular, EDI is used when two parties need to share data such as purchase orders and invoices without having to make special arrangements to allow the sharing of that data.

As you may be able to guess from the somewhat old-fashioned naming, EDI has been around for a long time (at least by the standards of digital technologies). The first EDI standards were created in the early 1970s.

It is important to note that EDI is a concept, not a specific standard or technology. So, there have been many EDI standards over time, many of which were designed for specific industries or regions.

The primary goal is EDI is to allow businesses to exchange data without the need for humans directly handling the data. If a purchase order is sent by email, it must be viewed and processed by a person. However, if it can be sent using an EDI standard, the vendor can process the order straight into its order system without the need for any human intervention, helping to speed up the process.

How EDI Is Used and Its Benefits

In practice, EDI is usually only used for businesses making relatively large and frequent orders from one another. Infrequent and/or small orders are usually not worth the trouble of getting computer systems to talk to one another.

Nonetheless, it is beneficial for any business that may need to accept orders and send invoices using Edi to be prepared with the necessary EDI software. Being ready with a specific standard or set of standards for communicating data will help your business to work with big clients more easily and efficiently, when necessary.

When used, EDI can have some great benefits. These are the most noteworthy:

• Speed: Data sent directly between two parties’ computer systems will tend to accelerate processes. There are fewer roadblocks and fewer reasons for delays.
• Reduction of Errors: People make errors sometimes. While computer systems can have glitches, they are far less frequent, especially when all data inputs are standardized.
• Reduction of Human Capital Needs: No one needs to process an order and input it into the system. The same is true for invoices or any other data inputs. That can save a lot of time and effort from personnel.
• Simplicity of Setup: Setting up such a system using EDI is much easier than trying to establish a novel standard whenever you connect with a new vendor or customer. Plus, you can have many vendors or customers all using the same standard.

The Importance of Having the Right EDI Software

EDI can make it easier for businesses to interact. However, the above benefits are only realizable if you have the right software to make it happen. Typically, businesses do not want to invest in building out bespoke systems for handling orders, invoices and similar data. Therefore, it is helpful to have all the benefits of EDI bundled in with a robust commerce platform.

If you are running an e-commerce business, these factors are especially important because all transactions are conducted digitally. It could be a helpful step in being able to work with much larger and higher spending customers.

Learn More

Discover more about EDI and the relevant standards and software today. With the right solution, you could help your business to grow more rapidly. For many businesses, tackling EDI needs is easiest when using a comprehensive e-commerce platform that can unify many different business data activities.