EDI and related developments

EDI (Electronic Data Interchange) is the exchange of structured business information between applications, among trading partners (business organizations who agree to exchange business documents via EDI) by agreed message standards through electronic means. It is the application-to-application transmission of business information and/or documents, such as purchase orders, invoices and remittance advice, via computer-to-computer in standard formats.

In EDI, information is organized according to a specified format set by both parties, allowing a ‘hands-off’ computer transaction that requires no human intervention or re-entry of data on either end. The information contained in an EDI transaction set is, for the most part, the same as that on a conventionally printed document. With the advent of online trade forex software written on different platforms have helped in faster electronic data transfer. The forex softwares that are being made available have been custom built to meet the different uses.

EDI is about relationships between companies. Through EDI, companies get the opportunity to coordinate their internal applications so that the information stream flows smoothly between them. By itself, EDI does not create any new processes or strategies. It simply expedites the existing business processes. EDI compresses the timeline from initial order to shipment to final payment by sending actionable information without the need for re-entry of information/data at any stage along the way.
EDI is completely different from sending electronic mail messages or sharing files through a network, a modem, or a bulletin board. The straight transfer of computer files requires that the business applications of both the sender and receiver agree upon the format of the document. The sender must use a business application that creates a file format identical to receiver’s business application. EDI does not require the trading partners to have identical business application or document processing systems.