Frequently Asked Questions

EDI involves converting (translating) formatted documents to/from a structure compatible with your business system. There are many ways to do this conversion and many software packages and services that will help you do it. The first step is to do your homework. Review your business needs, your technology infrastructure, and your budget. Once you have those defined, review the available EDI systems to see which one best fits your needs. DCS can provide expert and objective information to help you in your evaluations. We’re system agnostic and can offer unbiased advice, with no obligation. If you’re not sure where to start we’re happy to point you in the right direction.

It shouldn’t be! The value of EDI is that it’s a well-defined format that, when implemented correctly, works very smoothly. But like many things, if an EDI system isn’t built on a solid foundation you can end up spending all your time making repairs. The format also takes some time to learn, making it feel like you’re trying to work in another language. DCS has the experience and expertise to build a solid foundation and “translate” EDI into something effective and easy to understand. EDI should not be painful, so if it is we’d love to talk with you about how DCS can fix that.

Somewhere between a week and a year! Jokes aside, predicting the timeline for EDI implementation notoriously difficult because it involves external parties beyond your direct control. New implementations are also highly dependent on business process definition and data cleanliness. However, if you know your processes well and already practice good master data management, DCS can typically have new EDI set up in 1-3 months.

Many companies use EDI because their customers require it. Beyond that mandate, there are many internal benefits to implementing EDI.

• EDI automates the exchange of critical business documents, leading to improved efficiency and cost savings.
• It eliminates manual data entry, reduces errors and speeds up transaction times.
• Businesses gain better visibility and accuracy in their supply chains while enhancing collaboration with trading partners.
• Additionally, EDI helps companies meet compliance requirements, scale operations with ease, and improve overall customer satisfaction, making it a vital tool for modern, competitive businesses.

In many cases, the obvious ROI of EDI is that you fulfill a customer’s requirement. There are many returns beyond that, though. EDI improves ROI by automating transactions, reducing manual data entry errors, and speeding up processing times. It lowers operational costs, improves accuracy, enhances supply chain efficiency, and strengthens relationships with trading partners. These benefits lead to cost savings, increased productivity, and better decision-making, which directly impacts your bottom line.

Although EDI is defined by standards, those standards are really a set of parameters. Companies who implement EDI can pick and choose within the standard guidelines according to their own business needs, which means that one EDI document is not necessarily like another. Companies can also have variation within their own EDI; for example, Target has different 850 formats for Ship-To Distribution Center, Store, DC Cross-Docked, and Home. This means you typically need to create different EDI maps for every trading partner. However, with solid mapping expertise you can streamline this process as much as possible, building foundational maps that require only minimal updates for individual trading partner requirements.

Solid EDI expertise really helps to cut through the complexity. You can either utilize DCS’ expertise directly or build your own internal expertise through training. Either way, don’t struggle with the complexity, recognize and control it.

EDI involves moving data between standard EDI documents and your business systems. So in theory, you need to be expert in both aspects to be successful. Your operations are unique to your company, so you will need to bring business-specific knowledge to the project (for example, how you utilize shipment date versus delivery date in your sales orders). While you’ll need a solid understanding of your company’s operations—such as how you manage shipment dates versus delivery dates in sales orders—EDI itself follows established standards. This means you don’t need to be an expert in EDI; you can rely on outside help for that. As long as you can provide details on your business processes, such as how you want to handle specific data, a trusted resource like DCS can take care of the rest.

Although email will get the document to you, it won’t get the document into your business system directly. For example, if a customer emails a purchase order, someone still must open the email and manually enter the PO information. By automating the exchange of documents, EDI eliminates repetitive data-entry and common mistakes due to human error, two conditions to which email is susceptible. With EDI, the information is automatically transferred between systems.

For over forty years, EDI has allowed companies to electronically trade documents. In addition to being a very mature technology, EDI is a long-established solution in many industries. EDI has evolved over time to capitalize on new technologies, but the core functionality remains the same because it performs reliably and fulfills business needs efficiently. Although it might seem like old technology, over 60% of companies use it because it works.

To paraphrase Mark Twain, the reports of EDI’s death are greatly exaggerated. EDI has been in widespread, continuous use since the 1980’s and has shown persistent steady growth. New technologies occasionally compete for attention, but companies have ultimately chosen to stay with EDI because it functions consistently and effectively addresses their business needs. Following the “if it isn’t broken, don’t fix it” philosophy, companies stick with EDI because it works, and it remains the most popular data integration method.

Most companies get started with EDI because of a mandate from a customer, but EDI can be utilized in any business relationship, from suppliers to warehouses to transportation. If there’s an external document you exchange regularly, it’s a good candidate for EDI. Once you implement EDI with customers, we recommend capitalizing on your investment by implementing it with suppliers and other partners for even greater return on your investment. 

Data integration is the process of combining data from multiple sources into a unified view, enabling seamless access and analysis. It involves extracting data from various systems, transforming it into a consistent format, and loading it into a centralized system, such as a database, data warehouse, or business system. This process ensures that data is accurate, accessible, and ready for use in decision-making, reporting, and business operations. EDI is an important component of data integration, allowing external data sharing with outside entities like customers and suppliers.

e-Commerce is a general term for the electronic exchange of data in any format, for example a website order or a streaming service. EDI is a subset of e-Commerce that is done in a standardized format and is particularly useful for a large volume of repetitive documents such as purchase orders. EDI can be utilized in any of the common e-Commerce models: business-to-business (B2B), business-to-consumer (B2C), business-to-administration (B2A), social commerce, and marketplaces.

EDI and XML (Extensible Markup Language) are both technologies used to exchange information between systems. While EDI uses a standard format, XML is a self-describing format that uses tags to define the data. Because XML is a free-form format it’s highly flexible, but this flexibility can create challenges. Because it’s not standard, systems must be taught to read specific XML formats. This makes it desirable for situations that require customization, but less desirable for situations that require consistency. Because of this, XML is typically used for internal purposes while EDI is used for external exchange. For example, a customer may send an EDI purchase order (standard format) that the recipient transforms into XML (custom format) for integration into a proprietary business system. This is a very common form of EDI translation.

A Value Added Network (VAN) is a private network dedicated to the secure exchange of EDI traffic. This network serves as an electronic mailbox for sending and receiving EDI documents. Internet-based EDI enables companies to exchange EDI documents directly using secure methods of encryption. It’s possible to use multiple methods of exchange, and the decision is typically based on customer requirements and internal preference. Some providers offer both VAN and hosted EDI services; these functions operate independently, and selecting one does not necessitate choosing the other.

AS2 (Applicability Statement 2) is a secure protocol used to exchange business documents, such as EDI files, over the internet. It ensures safe and reliable communication between trading partners by encrypting the data and providing digital certificates for authentication. AS2 is widely used in industries like retail, healthcare, and logistics because it offers real-time delivery, end-to-end encryption, and the ability to track and verify the receipt of documents through Message Disposition Notifications (MDNs).

This makes AS2 an efficient and compliant solution for businesses that require secure and fast data exchange.