What is EDI?

Instead of a customer emailing a purchase order for someone to type in, their system sends it straight to yours in an agreed format, and your system sends back a confirmation, a delivery note and an invoice the same way. It's been used for decades between large retailers, distributors and manufacturers, and many large customers still require it of their suppliers.

How it works

• Standard formats. Documents follow standards such as EDIFACT (common in the UK and Europe) or ANSI X12 (common in North America), so both sides' systems understand them.
• A secure route. Documents travel over a secure connection, such as AS2, or through a value-added network (VAN) that passes them between trading partners.
• Mapped to your systems. Each document is translated into and out of your ERP or order system, so an order arrives as an order, ready to process.

An example. A national retailer sends a supplier its weekly orders by EDI. The supplier's system accepts them, confirms what it can deliver, sends an advance shipping notice when the lorry leaves, and invoices automatically. Nobody types anything.

EDI, APIs and punchout

EDI moves documents between systems in batches, to long-established standards. APIs connect systems in real time and suit newer integrations. Punchout lets a buyer shop your catalogue from their procurement system. Many suppliers use all three, and the orders from each can land in the same place: your ERP.