Definition of EDI

EDI or Electronic Data Interchange is a computer system that promotes the exchange of commercial information electronically. This system makes it possible to automate certain commercial tasks and therefore save time. As EDI replaces physical exchanges of commercial documents with electronic exchanges, it saves money and improves the speed of document processing. It also reduces processing errors and improves relationships between business partners.

Generally, there are two types of EDI transmission:

• Point-to-point or direct connection; this type of transmission consists of connecting two computers or two systems via the internet without an intermediary
• The value-added network; this system allows a third-party network to manage the transmission of data using a messaging system for example.

Establish EDI

The implementation of EDI is a fundamental lever in the digitalisation of the company’s businesses. By removing unnecessary and redundant entries, the objective is to accelerate and secure the commercial exchange cycle and reduce their costs.

Opting for Electronic Data Interchange (EDI) in a business is a major project that can be quite complex. It is recommended to call on a Steering Committee. He will be responsible for managing the EDI project from the technical side and anticipating changes in the internal organization of the services’ work.

Implementing EDI in the company?

Establishing Electronic Data Interchange (EDI) in the company is done in two areas:

• The technical axis; EDI being an IT project, setting up the system requires good logistics and organisation.
• The organisational axis consists of establishing good internal and external communication to get employees to adhere to this new project for the proper functioning of EDI within the company.

EDI: Technical axis

The technical aspect of EDI is divided into several fundamental stages to optimise the progress of the project.

The first step consists of analysing the needs and identifying the EDI flows to be put in place as well as their volumes (for example for orders, deliveries or even invoices).

In the second step, you must choose the customers and suppliers with whom the company wants to communicate via the EDI system. This step will help distinguish the EDI solution best suited to the needs of the company and the most relevant EDI network as well as the EDI VAN access provider.

The third step consists of integrating the company’s existing software into the EDI system.

The penultimate step is data organisation or data mapping. This stage is the most sensitive in setting up the EDI system. It consists of preparing the company’s data so that it can then be transferred to the EDI system. During this step, the company must synchronise the data dictionaries between partners so that the product codes used by the customer and the supplier are identical. All necessary information must be coded to specific EDI system standards. These operations can be critical because if the data entered is incorrect, not recorded or poorly formatted, the messages sent or received will be rejected.

The fourth and final step is to test message transmissions and receptions of all tasks that the EDI system can do. Once verified, the EDI system can be launched.

Attention; Do not forget to analyse the company’s performance before installing the EDI, to be able to compare its level of performance after installing the EDI.

EDI: Organisational axis

The implementation of an EDI system is above all a digitisation project. He reorganises all the structures of the company. It is appropriate to carry out a study on the impact it can have and to be supported throughout the process.

Changes first take place at the level of task accomplishment. In fact, certain data entry tasks will be eliminated as well as paper documents. Checks will be carried out automatically and exchanges will take place in real time. It is appropriate to organise meetings with employees and provide training to enable employees to use this new tool.

On the other hand, the installation of the EDI system leads to changes with commercial partners. To optimise the use of this tool, we must try to convince as many customers and suppliers as possible affected by EDI flows to join the company’s EDI network. It will therefore be necessary to be able to prove the reliability of the EDI system and that the tool is operational.

What are EDI advantages?

• EDI makes it possible to reduce costs and CO2 production as well as save time thanks to the automation of tasks electronically. EDI can automate the sending of certain paper documents such as purchase orders or invoices.
• The EDI method improves the efficiency and productivity of the company that uses it because it allows a greater number of commercial documents to be processed, more quickly and with great precision.
• Electronic Data Interchange (EDI) reduces errors. This is because the system uses rigid standardisation which ensures that transmitted information and data are correctly formatted before entering the system.
• EDI software improves traceability and reporting. Electronic documents can be integrated into the computer system that supports data collection and analysis.
• Electronic Data Interchange (EDI) promotes a good customer experience by guaranteeing speed and reliability of transactions and shipments of products and services offered by the company.

EDI therefore provides a strategic advantage. Indeed, the company can have real-time visibility of transactions. This allows him to react and make decisions more quickly. Furthermore, EDI promotes penetration into new markets and geographic areas because it offers a common commercial language and simplifies exchanges with global partners.