How EDI Works

There are three steps in the process of sending EDI documents, which are as follows:

Document Preparation

A buyer prepares an order in a purchasing system by following different approaches.

Exporting computer-based data from spreadsheets or databases

Reformatted electronic reports into data files

Enhancing apps to create output files ready for EDI standard translation

Purchasing EDI software that can turn documents from your systems into EDI files

Human data entry

EDI Document Translation

EDI translation software will convert or translate your internal data format into the EDI standard format. This is data mapping.

Connect and Transmit EDI Documents

There are several ways to connect to a partner via EDI. These include:

Direct, point-to-point EDI connection via a secure Internet protocol, such as AS2

Connect to an EDI network provider, also referred to as a Value Added Network (VAN) provider

A combination of both Direct EDI and VAN, depending on the partners involved and the transaction volume

In the EDI network provider, the buyer uses their preferred communications protocol, thus ensuring reliable, secure EDI transmission. The network provider then connects to the supplier using the supplier’s preferred communications protocol, making sure that the supplier receives the order. VANs can reduce setup and maintenance costs. However, in some cases they tend to be more expensive than point-to-point integration, as they charge a fee for each transaction or even the line item.