EDI Interchange

EDI interchange is the process of transferring EDI documents between senders and receivers - typically also referred to as "trading partners."  EDI interchange is always done on a computer to computer basis as outlined by various standards deployed over the past twenty years that define how EDI interchange should occur.  One often misunderstood aspect of EDI interchange is the communications aspect.  While EDI software is responsible for the translation of an EDI interchange message into a more accepted format (like a CSV file), the actual transmission of the data is handled by a different set of tools known as communication software.  Before the internet became a dominant means of exchanging information, EDI interchange was often performed using modems dialing into dedicated "Value Added Networks" or VANs.  With the advent of EDI interchange over the internet, however, VANs have had to change business models to survive.

VANs and EDI Interchange Today

A valued added network (VAN) is still the most popular mode of EDI interchange. One of the advantages of using a VAN to perform EDI interchange is the numerous specialized services the VAN can provide. The VAN acts as an intermediary between the parties; making its main task in an EDI interchange the reception of incoming communication, storage of the information, and forwarding of the information to a final destination. However, the VAN can offer other services in an EDI interchange, making it a very attraction option for many EDI electronic communications. Such specialized services can include telecommunications (e-mail and video messaging), access to commercial databases, offering audit information, data transformation, and industry-specific capabilities (such as applications or services).

Direct EDI Interchange

A second and growing means of EDI interchange is the direct trading partner to trading partner EDI interchange.  In this method the communication is established directly between two trading partners eliminating the needs and costs associated with a VAN.  Many large retailers support this form of EDI interchange including Wal-Mart, one of the pioneers of Internet-based EDI interchange.  For many businesses the challenge of direct EDI interchange has been the cost associated with purchasing the communications software to support more than one direct EDI interchange connection.  With the advent of products like EMANIO's Trading Partner 7.1, however, the costs associated with direct EDI interchange have become significantly lower, making this a viable option for any size business.

After the EDI interchange

After the EDI interchange, the information passed in transmission still needs to be interpreted by the receiving party. EDI translation software is used during EDI interchange to provide useable interface between the final destination system and the EDI electronic document format. In a typical EDI interchange the translation software creates an electronic file (in fixed or variable length format, or XML format) and then translates that file into a format supported by the target in-house ERP system.   This integration of the EDI interchange to the ERP system is the ultimate form of EDI interchange and can provide significant cost savings in reduced errors and increased productivity.

Tracking Failures & Problems

During EDI interchange, the translation software performs a review of all steps to ensure every step can be tracked if necessary, ensuring that documents and communications are not lost in transit.  Regardless of how they are used, EDI interchange exchanges always comply with standards published by one or more organizations.  Today EDi interchange is controlled by the X12 standard (used in the US), the EDIFACT standard (used outside the US) and the TRADCOMS standard (used in the UK).