Electronic Data Interchange (EDI) has completely changed the way companies manage their business and communicate with their business partners.

Since its creation, EDI has enabled organizations to automate and optimize the exchange of corporate documents, replacing manual processes and significantly reducing both mistakes and response times. Over the years, its use has spread across several sectors, becoming a key factor in the operational efficiency of the global supply chain. Nowadays, with the integration of emerging technologies such as artificial intelligence and cloud solutions, EDI keeps evolving to offer greater flexibility and security.

In this article we explore what EDI is, its standards and protocols, the challenges faced by companies not adopting it, and its continuing transformation in the digital age.

What is EDI?

Electronic Data Interchange (EDI) is the transfer of business documents between organizations by electronic transmission.

It has played a key role in the modernization of logistics and management of the supply chain, enabling companies to reduce costs, improve accuracy and accelerate business processes.

Over more than 60 years, EDI has evolved significantly to enable companies to communicate efficiently and automatically and to reduce errors in the communication of business transactions

Today, more and more companies are looking for solutions that enable them to adopt EDI, thus obtaining the possibility of integrating with their partners in a reliable way and complying with an international standardization that promotes their growth.

Orders, invoices, delivery notes, confirmations, cancellations, modifications... there’s a large amount of messages that are exchanged according to the commercial needs of each company.

EDI Standards

Most of EDI systems are based on recognized standards to ensure interoperability between different organizations and industries (EDIFACT, ANSI X12, ODETTE, TRADACOM, VDA, PEPPOL,).

These standards provide a common framework for the format and structure of electronic documents, making integration between companies using different systems easier.

Protocols and Value Added Networks

There are different communication protocols for electronic data exchange, such as AS2, AS4, OFTP, SFTP... depending on the sector and geographical location.

VANs, or value-added networks, are dedicated private networks that act as intermediaries to facilitate the exchange of electronic documents between companies, enabling the safe exchange of information and recording each transfer to provide visibility and traceability of each transaction.

What are the difficulties companies have to face without EDI?

Companies without an EDI system have to face a number of challenges that can affect their operational efficiency, competitiveness and ability to interact effectively with business partners.

Without EDI…

Companies are forced to handle commercial transactions manually, increasing the risk of data entry errors, delays and loss of documents.

They rely on traditional methods of communication, such as e-mail, fax or mail, which slow down the exchange of information.

They have higher operating costs because manual processes are more expensive in terms of time and human resources and require additional staff.

Incompatibility with commercial partners and limited competitiveness. Many large companies and global supply chains ask their suppliers to use EDI to keep their supply chains consistent and efficient.

Companies not adopting EDI may find themselves in a disadvantaged position compared to competitors who have already automated their processes and can offer faster, more accurate and cheaper services.

In terms of compliance and security, companies that do not use EDI may find it difficult to comply with data security regulations and standards, especially in highly regulated sectors such as healthcare or finance.

Scalability difficulties: as the business advances, the increase in transactions volume makes growth management increasingly challenging

Evolution of EDI: cloud solutions, AI and digitalization

EDI is evolving towards more flexible, accessible and secure solutions through integration with modern technologies.

EDI solutions in the cloud:

Value-added networks, such as IBM VANs, are evolving and offer more advanced functionalities that, in addition to acting as intermediaries, allow companies to scale their data exchange capabilities without requiring their own physical infrastructure and reduce operating costs.

Artificial Intelligence (AI):

The incorporation of Artificial Intelligence (AI) and Machine Learning into EDI platforms has enabled greater automation in documents conversion and management, such as the automatic transformation of files into non-EDI formats (e.g. PDF or JPG).

Modern standards and exchange networks:

The expansion and adoption of Peppol networks and modern standards such as UBL (Universal Business Language) have made interoperability in public procurements and international trade easier.

Increased integration with API and microservices architecture:

APIs (Application Programming Interfaces) and microservices are increasingly used in the context of EDI, above all in situations where greater flexibility, rapidity and real-time connectivity are required.

They provide a more fluid and flexible way of exchanging data between companies. However, in many sectors, APIs and traditional EDI co-exist, combining the stability and strictness of EDI standards with the flexibility and rapidity of APIs.

Companies adopt them to improve operational efficiency and offer faster and more customized services to customers and partners.

This extends its applicability and facilitates its adoption by companies of all sizes and in different sectors.

Focus on sustainability:

With specific annexes or fields to include information on sustainable packaging practices, waste reduction or energy efficiency in transport in EDI messages.

Security and traceability:

The incorporation of blockchain into EDI to ensure integrity and traceability of transactions, as well as advances in cybersecurity to protect exchanged data.

IBM Sterling B2B Integration SaaS

IBM Sterling B2B Integration SaaS, IBM's latest EDI solution, designed to offer a wide range of advanced functionalities, is a clear example of this evolution

The platform enables the transformation of documents into any EDI format and supports various communication systems and protocols (API, VAN Interconnect, OFTP2, AS2, AS4, WS, SAP ALE, iPaaS, Blockchain...) including the Peppol network.

An artificial intelligence-powered conversion module simplifies the loading and automatic transformation of documents into different formats, such as fax, PDF or JPG, for EDI delivery to trading partners

For small and medium-sized companies that do not have EDI, the solution includes a web module (Transaction Manager) that enables manual entry of documents.

It has more than 800,000 direct connections already in operation with business partners, ensuring efficient and rapid integration.

Innovation and technological reliability

Neverhack has been helping its customers adopt and optimize EDI communications for over 15 years, offering solutions tailored to their needs.

We have a team of EDI experts with solid experience, ensuring efficient and easy EDI onboarding and rapid integration into your activities.

Our extensive experience has enabled us to design flexible and customisable solutions to suit the specific needs of each customer.

We offer both on-premise and SaaS products, ensuring easy and effective integration of EDI into any type of business.

Ci poniamo come partner tecnologico di fiducia, supportando l'evoluzione digitale della vostra azienda, indipendentemente dal settore, e aiutandovi a raggiungere i vostri obiettivi.

If you would like more information on our solutions, please do not hesitate to contact us.