What Does EDI Capable Mean?

Being EDI capable means a company can exchange electronic business documents with trading partners in standardized EDI formats without relying on paper or manual handoffs. In practice, EDI capability requires three connected elements: an ERP connection that receives or sends internal business data, an EDI converter that translates that data into agreed message standards, and a communication adapter that transmits messages through the agreed protocol. SEEBURGER supports EDI capability with B2B/EDI integration, ERP connectivity, message conversion, communication protocols, and deployment options across on-premises, cloud, and hybrid environments.

Key takeaways

EDI capability enables automated exchange of standardized documents such as orders, dispatches, invoices, and inventory reports between trading partners.
The classic path to becoming EDI capable has three steps: connect the ERP system, convert messages into EDI standards, and transmit them through the agreed communication protocol.
Modern EDI capability can improve automation, governance, visibility, partner onboarding, and flexibility across on-premises, cloud, and hybrid operating models.

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EDI capability is the ability to participate in highly automated data exchange with external B2B systems and trading partners. It is especially important in supply chain-oriented industries where companies exchange standardized documents such as purchase orders, dispatches, invoices, and inventory reports. Because EDI standards vary by industry and region, an EDI-capable organization needs systems and processes that can use the standards required by its trading partners.

Connect the ERP system

The EDI solution receives or sends messages from the ERP system in the company’s internal format. An ERP connector links the ERP system and the EDI software so that message transfer can be automated.

Convert the message

The EDI converter transfers the internal message format into the standard format required by the trading partner. This conversion step allows different systems to exchange structured data consistently.

Communicate through the agreed protocol

After conversion, the communication adapter establishes the connection between sender and receiver and transmits the message through the agreed protocol.

SEEBURGER Project Lifecycle — Figure 1: EDI Capable Project Lifecycle

EDI capability includes ERP connectivity

An ERP connector connects the EDI solution with the ERP system so messages can move automatically between business applications and EDI software. A broad selection of ERP connectors helps companies connect different ERP environments more easily.

EDI capability includes standard data formats

Typical standard formats include ANSI X12, EANCOM, EDIFACT, EDIFICE, ebXML, GALIA, HIPAA, ODETTE, RosettaNet, Tradacoms, VDA, and XBRL. Companies need to be ready to send and receive the standard formats their trading partners and industries require.

EDI capability includes standard communication protocols

EDI messages can be exchanged through an indirect connection such as a Value Added Network (VAN) or through a direct connection based on AS2, OFTP2, or a similar protocol. The communication adapter manages the technical dispatch of the converted message to the business partner.

EDI has connected trading partners and automated supply chain management for more than 40 years. It became a standard approach for exchanging information electronically from system to system without paper or manual processes. Over time, industries and regions developed different EDI message standards to support structured data exchange across supply chains.

Many organizations already use EDI, but they may still have room to improve automation and operating efficiency. Modern EDI capability focuses on standardization, automation, simplification, governance, management, visibility, partner onboarding, and the flexibility to move between on-premises and cloud operating models at the organization’s own pace.

Advanced EDI-based supply chain processes include Vendor Managed Inventory (VMI) in CPG and retail, as well as Just-In-Time (JIT) and Just-In-Sequence (JIS) processes in the automotive industry.

SEEBURGER Business Integration Suite (BIS) supports EDI modernization and consolidation by connecting ERP systems, supporting EDI format capability and communication protocols, and operating on premises, in a cloud model such as iPaaS, or in a hybrid environment. BIS can also support future integration requirements such as API integration, e-invoicing, and rules-based processing.

Organizations can also use SEEBURGER Cloud Integration Services for B2B/EDI when they want cloud-based EDI integration services for business partners.