Companies share standardized messages electronically. Data interchange between business partners takes place automatically. This process is known as Electronic Data Interchange (EDI).
EDI enables companies to convert business data such as orders, delivery notes, bills, and article catalogs from their in-house ERP system into structured, standardized data and to relay it electronically and securely in seconds. The data goes directly from one ERP system to another – companywide and globally. Manual processing is eliminated, errors are reduced and processes are accelerated.
The Positioning of EDI Software Between Business Partners
Doing EDI requires standardized data formats for messages as well as agreed-upon communication protocols. EDI communication can be executed if both respective partners use EDI Software.
EDI can provide competitive edge over competitors that do not use EDI. EDI improves the efficiency of your own organization, simplifies and strengthens business relationships with partner companies (suppliers, customers, shipping companies, banks, etc.). It enables companies to demonstrate competence and a high quality of service to business partners. In the automotive industry, for example, it took EDI to make just-in-time deliveries possible.
EDI is suitable for companies that regularly exchange data on a mid to high frequency basis with their partners.
WebEDI is a sensible alternative for companies with low data volumes, or less-sophisticated ERP systems.
Standardized data formats for messages and uniform communication channels on which to transmit / receive them are a prerequisite for using EDI. To achieve this both business partners need EDI software.
This software consists essentially of three components:
- An ERP connector to integrate the in-house ERP system
- A converter for converting/transforming messages
- A communications adapter for transmitting/exchanging messages with business partners
The ERP connector connects the EDI software with the ERP system, enabling messages to be transmitted automatically between the ERP system and the EDI software. There is a separate connector required for each ERP system.
Widely used ERP systems for which EDI connectors are available on the market:
- Microsoft Dynamics AX / NAV
- E-Business Suite
- JD Edwards
With a modern EDI system, the right connector for any other ERP can be built.
The converter’s task is to convert data (messages) from the ERP system into standardized EDI messages based on EDI message formats
To exchange messages by EDI, business partners use uniform message standards. In addition to the global EDIFACT standard, there are further regional or industry-specific standards.
The following is a selection of standardized EDI message formats:
- EDIFACT (global)
- XML (global)
- ANSI X.12 (regional)
- EIAJ (regional)
- TRADACOMS (regional)
- VDA (regional)
- AECMA (Aerospace)
- HL7 (Healthcare)
- SWIFT (Banking)
A good converter should be able to convert a variety of other data formats to be found on the market.
The communications adapter establishes a secure connection between the sender and recipient. In principle there are two variants: indirect communication via Value Added Networks (VANs) and direct communication such as over the Internet or via ISDN.
With a VAN, each business partner has a mailbox through which documents are sent and received. Messages are automatically relayed to the correct mailbox. A VAN is a secure private network supplied by specialist providers.
With a direct connection, the business partners link up with each other individually and directly (point- to- point), which can mean managing hundreds or thousands of separate connections. It is a flexible, controllable, and secure approach for use between, say, customers and suppliers.
The transmission method used depends on the transmission frequency, the data volume, and the number of items in the message. In addition to well-known channels such as SMTP (e-mail) and FTP (file transfer) there are many domestic, international, or product industry-specific transmission channels for communication in the EDI environment.
Standard transmission channels for EDI messages:
- Direct Connections
OFTP(2), AS2, FTP(S), SFTP, http(S)
- Value Added Network (VAN)
Atlas, AT&T, EXITE, IBM, KPN, OpenText GXS, Telebox X.400, Tradanet
In practice, many more communication protocols are available, supported by a modern EDI Solution.
EDI solution On-Premise (in-house operation)
With this operating model, the company acquires the EDI software and runs it in its own data center, on its own or managed hardware. Operation and support are mostly the company's responsibility - but can also be outsourced to a hosting partner.
In self-service, it is advantageous that all EDI requirements can be implemented without dependency on external partners. Sometimes company policy stipulates that no data goes beyond the edge, i.e. EDI can only be used intra-company. However, it is also necessary to build up comprehensive EDI know-how, which will entail corresponding costs.
The SEEBURGER EDI software
Find out more about the numerous integration options for SEEBURGER EDI software.
EDI as a Cloud Service
With this operating model, IT services such as EDI can be outsourced to an external service provider. Data, software, platforms, or computing power are outsourced to the Cloud provider and used via the Internet. Companies that use this operating model always have access to the latest technology that supports the numerous technical standards and trade regulations. A Cloud solution offers a choice of service options to meet customers’ requirements for operating the EDI solution at external data centers.
With cloud services, IT services can be outsourced to external service providers. EDI can also be purchased as a Cloud service. With this operating model, the investment in EDI software is completely eliminated, instead the most standardized EDI Cloud service is used. In addition to the amount of the monthly fee to be paid, the main selection criteria should also be the proven competence of the service provider. References should provide proven certifications (ISO27001, ISAE3402), promised service levels or corresponding references. An EDI Cloud service can be a better choice for medium-sized companies, as they are quickly overwhelmed by a 24/7 self-service of an EDI solution. Also, the total cost of a self-owned company is usually significantly higher than with the clearly understood costs of an EDI Cloud service.
The SEEBURGER EDI/B2B Cloud Services
Find out more about the diverse cloud models, security and certification.
WebEDI as an alternative
Small and medium-sized enterprises (SMEs) with low message volumes usually lack the know-how to operate EDI in the classical manner, and it often doesn't make economic sense either. That is why they prefer to exchange data by WebEDI. With WebEDI, business partners can receive, record, and send EDI-based messages semi-automatically on electronic forms over the Internet by means of a Web browser.
Economies of scale can quickly be leveraged with WebEDI by way of utilizing EDI across the entire connected customer or supplier base.
The SEEBURGER WebEDI solution
Use our central WebEDI platform and reach many of your business partners.
The rationalization potential for business transactions is enormous. With EDI, manual input can be reduced and data quality can be improved at the same time.
With EDI, you are taking an important step toward digital transformation. EDI-exchanged business documents are faster, more efficient and less error-prone than paper or fax documents.
Using EDI, you can achieve:
A competitive edge and an enormous cost reduction as a result of simplified processes and uniform technologies
Accelerated and transparent business processes and message processing by split-second data transfer, which is important for just-in-time delivery (JIT, JIS) in the automotive industry
Strengthened business partner relations by means of coordinated processes, master data, and product ranges (leading, for example, to a reduction of inventories)
High data quality by means of correct data without manual interaction or a media gap (paper/data)
Better adaptation to market changes, such as fast onboarding of trading partners
A rapid return on investment (ROI)
- Ready-to-run EDI solution package for small to medium organizations
- Contains pre-configured Trading Partner profiles which enables fast onboarding
- Start small - Scale up on demand
- Available on-premise or as an EDI Cloud Service in one of our ISO 27001 certified data centers