It seems as though everything these days is being done electronically. Correspondence is performed through email and businesses communicate with one another by sending forms and bills from one computer to another. The transfer of these documents and other sheets full of data is known as electronic data interchange, or EDI.
It would be incorrect to sum up EDI as simply shooting emails back and forth. Electronic data interchange has come to encompass sending bills, checks, and other important documents with proper formatting. An exchange from person to person via something like a floppy disc or DVD can be considered a part of the interchange, as long as the intent is not to have one or both parties perform any interaction with the data. Current standards prefer that human interaction not even be a part of the equation. The only time an actual human being should have contact with any EDI documents is for the purpose of error correction.
In electronic data interchange terms, those who send and receive the documents are known as trading partners. It is up to them to decide what to send and for what purpose the documents will be used. Because this is one of the few aspects of EDI that involves human interaction, these communications are sent using human readable specifications. Products that are to be sent and received also need to be as specific as possible between the trading partners so that the proper transaction is completed. EDI guidelines within rather large companies are sometimes particular to each individual department.
One of the benefits of electronic data interchange is that the automation of it corrects many errors. When shipping and billing documents are transmitted in proper EDI format, mistakes are caught by computer programs and fixed before they reach the end user. Both trading partners’ computers will reconcile aberrations so a person doesn’t have to. Not only do these errors not have the chance to cost anyone money directly, but even more money is saved in the amount of time electronic data interchange frees up. Without the need for someone to scan a ton of papers and forms with a fine tooth comb, his or her efforts can be better spent on more productive tasks. That, and a company does not need to keep a costly position on the payroll to do the job that EDI can take care of.
Electronic data interchange saves time and money. There is no more poring over scads of information that could take hours. Without tying up someone (or an entire team) in such tedious activity, their services can be better utilized elsewhere, making for a more efficient and profitable business.