EDI (Electronic Data Interchange) technology is the process of electronically exchanging data, or more specifically business documents, between companies. Business documents may include: orders, invoices, acknowledgements, advance shipping notices, etc. Essentially, it is an electronic conversation between two business systems (referred to as "trading partners") that send or receive documents from each other even if the internal business systems are vastly different.
Errors are reduced because data is not manually duplicated into another systems. This results in the elimination of excessive shipping charges and the cost of returns for incorrect orders.
Electronic documents are delivered quicker than paper documents resulting in faster turnaround, happier customers, and competitive advantage.
Reduces direct cost such as papers and forms, postage, printers and toner, and document storage. Indirect benefits can include reduced lead times, increased inventory turns, better use of warehouse space, and improved cash flow.