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Electronic Data Interchange(EDI)

A deep dive in to Electric Data Interchange(EDI) for Businesses

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What is EDI?

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners.

By moving from a paper-based exchange of business document to one that is electronic, businesses enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners.

Computer-to-Computer EDI:

  • Computer-to-computer EDI replaces postal mail, fax and email.
  • While email is also an electronic approach, the documents exchanged via email must still be handled by people rather than computers.
  • Having people involved slows down the processing of the documents and introduces errors.
  • Instead, EDI documents can flow straight through to the appropriate application on the receiver’s computer (e.g., the Order Management System) and processing can begin immediately.
  • Exchange of business documents in a standard electronic format between two or more trading partners
  • It enables companies to exchange information electronically in a structured format, eliminating the need for manual data entry and reducing the cost and time associated with paper-based transactions.

The most common documents exchanged via EDI are:

  • Invoices
  • Purchase Orders
  • Financial Information letters
  • Transaction Bills
  • Shipping requests and notifications
  • Acknowledgment and feedback
  • Transcripts
  • Claims
  • Business Correspondence letters

 

A typical manual process looks like this, with lots of paper and people involvement:

 

The EDI process looks like this — no paper, no people involved:

 

 

Difference between Traditional Document Exchange and EDI Document Exchange:

Traditional Document Exchange EDI Document Exchange
Buyer makes a buying decision, creates the purchase order and prints it. Buyer makes a buying decision, creates the purchase order but does not print it.
Buyer mails the purchase order to the supplier. EDI software creates an electronic version of the purchase order and transmits it automatically to the supplier.
Supplier receives the purchase order and enters it into the order entry system. Supplier’s order entry system receives the purchase order and updates the system immediately on receipt.
Buyer calls supplier to determine if purchase order has been received, or supplier mails buyer an acknowledgment of the order. Supplier’s order entry system creates an acknowledgment an transmits it back to confirm receipt.

 

How EDI works?

 

The data or the information that one company sends the other first gets prepared to be sent, then the information/document is translated into EDI format.

The document is then connected and transmitted to the other business, the connection is direct and point to point.

EDI in print formats:

 

Uses of EDI:

  • Order Processing: EDI allows companies to exchange purchase orders and sales orders electronically, eliminating the need for manual data entry and reducing errors.
  • Invoicing: EDI can be used to exchange invoices electronically, reducing the time and cost associated with paper-based invoicing.
  • Shipping and Receiving:EDI can be used to exchange shipping notices and receiving documents, enabling companies to track the movement of goods in real-time.
  • Inventory Management: EDI can be used to exchange inventory information, enabling companies to manage their inventory levels more effectively.
  • Supply Chain Management: EDI is used extensively in the supply chain management process, enabling companies to exchange information with their suppliers, distributors, and customers.
  • Healthcare: EDI is used in the healthcare industry to exchange patient data, claims, and other healthcare-related information between healthcare providers, insurance companies, and government agencies.
  • Financial Transactions:EDI can be used to exchange financial transactions such as payment advice and remittance advice, reducing the time and cost associated with manual payment processing.

Advantages of EDI:

  • The paper usage reduced: The expense of storing, printing, recycling, reduces up to the maximum amount due to the EDI.
  • Improved quality of Data: The data entry errors are reduced due to EDI.
  • Speed Increases: The best advantage is the increase in the speed of the data interchange. With everything going online, the speed of the information transfer increases exponentially.
  • Security: By following the Protocols and the standard rules, the security of all the important documents is always secure and safe.
  • Information accuracy: Since the information exchanged is based on standards agreed by the sender and receiver both, the correct information is always transferred regardless of where they belong to.
  • Less Cost: With very less errors, fast response time, everything becoming automated, and no use of paper, the cost automatically reduces.

Types of EDI:

EDI (Electronic Data Interchange) comes in various types, each catering to different business needs and industries. Here are the main types of EDI:

  • Direct EDI / Point-to-Point EDI
  • EDI via VAN (Value Added Network)
  • EDI via AS2 (Applicability Statement 2)
  • Web EDI
  • Mobile EDI
  • EDI via FTP / SFTP (File Transfer Protocol / Secure File Transfer Protocol)
  • EDI via API (Application Programming Interface)
  • Cloud-based EDI
  • EDI via Email

Expertise Of Madhda in ANVEO EDI:

Anveo EDI is a solution designed to streamline the Electronic Data Interchange process within Microsoft Dynamics 365 Business Central (formerly known as Microsoft Dynamics NAV).

It provides tools to automate the exchange of electronic business documents such as orders, invoices, and shipping notifications with trading partners.

Key Components:

  1. Anveo EDI Connect: The core module that provides the functionalities needed to create, send, receive, and process EDI documents within Microsoft Dynamics 365 Business Central.
  2. EDI Mapping Tool: A user-friendly interface that allows users to create and manage mappings for different EDI document types, ensuring they are correctly interpreted and processed by the system.
  3. Communication Module: Manages the transmission and reception of EDI documents via various communication protocols, such as AS2, FTP, and VANs.

Features of Anveo EDI:

  • Seamless Integration
  • Customizable Mapping
  • Automation
  • Monitoring and Alerts
  • Scalability
  • Security
  • Comprehensive Support

Implementation Steps for Anveo EDI Mapping

  1. Requirement Analysis: Identify the specific EDI documents and data fields that need to be mapped.
  2. Template Creation: Use Anveo EDI’s mapping tools to create templates for the required EDI documents.
  3. Field Mapping Configuration: Define how individual fields in the EDI document correspond to fields in Business Central.
  4. Segment and Loop Mapping Setup: Configure mappings for segments and loops to handle detailed and repeating data.
  5. Condition and Transformation Logic: Apply conditions and transformations to ensure accurate and business-rule-compliant data mapping.
  6. Testing: Conduct thorough testing to ensure that data is accurately translated between EDI documents and the internal system.
  7. Deployment and Monitoring: Implement the mappings in a live environment and continuously monitor for accuracy and performance.
Types of Mapping in Anveo EDI:
1. Document Mapping
  • Description: Defines the relationship between entire EDI documents and their corresponding documents in Business Central.
  • Usage: Used to map complete documents like purchase orders, invoices, and shipping notifications.
  • Example: Mapping an EDI purchase order (EDI 850) to a sales order in Business Central.
2. Field Mapping
  • Description: Specifies how individual data fields within an EDI document correspond to fields within the Business Central document.
  • Usage: Used to map specific data points, ensuring accurate data transfer.
  • Example: Mapping the “Invoice Number” field in an EDI invoice (EDI 810) to the “Invoice No.” field in Business Central.
3. Segment Mapping
  • Description: Deals with specific segments within EDI documents, which can contain multiple fields.
  • Usage: Used to map detailed segments like header information, line items, or summary data.
  • Example: Mapping the “N1” segment (Name and Address) in an EDI document to the customer information in Business Central.
4. Loop Mapping
  • Description: Handles repeating groups of segments within EDI documents.
  • Usage: Used to process multiple occurrences of a segment group, such as multiple line items.
  • Example: Mapping multiple line items in an EDI purchase order to multiple lines in a sales order in Business Central.
5. Condition Mapping
  • Description: Applies logic to data mapping, based on certain conditions or criteria.
  • Usage: Used to map data only if certain conditions are met, ensuring that business rules are applied.
  • Example: Mapping a discount field only if the discount amount is greater than zero.
6. Composite Mapping
  • Description: Manages complex data structures where multiple elements are combined into one or split into multiple elements.
  • Usage: Used when data from multiple fields needs to be combined or a single field needs to be split.
  • Example: Combining first name and last name fields into a single “Full Name” field in an EDI document.
7. Table Mapping
  • Description: Maps EDI data to or from a table or list structure within Business Central.
  • Usage: Used for handling lists of items, addresses, or other entities.
  • Example: Mapping a list of order lines in an EDI document to a sales order lines table in Business Central.
8. Transformation Mapping
  • Description: Involves changing the format or structure of data during the mapping process.
  • Usage: Used for data type conversions, string manipulations, and arithmetic operations.
  • Example: Converting a numeric value to a formatted string or performing calculations on quantities.
9. Value Mapping
  • Description: Maps specific values from the EDI document to corresponding values in Business Central.
  • Usage: Used to ensure that values such as codes, statuses, or categories are correctly translated.
  • Example: Mapping an EDI status code to an internal order status in Business Central.
10. External Lookup Mapping
  • Description: Utilizes external data sources or tables to enhance or validate the mapping process.
  • Usage: Used to verify data against external sources or to enrich data with additional information.
  • Example: Using an external table to validate product codes or retrieve additional product details during the mapping process.

 


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