EDI – Electronic Data Interchange
EDI stands for “electronic data interchange” and refers to the exchange of data using electronic transfer procedures as part of electronic data processing. Today, electronic data interchange in various industries is based on standards that have evolved over the years. Well-known standards include SWIFT in the banking sector and ELSTER for electronic tax returns.
The idea behind EDI
The basic idea behind EDI was and still is to enable the rapid exchange of data and information via electronic communication channels, using automated procedures to reduce the number of user errors to a minimum. This makes it possible to exchange data between user systems without intervention, quickly and at low cost. EDI is used, among other things, in the area of online trading, where a customer places his order electronically and it is received and processed almost simultaneously, reliably and without errors in the recipient’s system. This type of transmission increases efficiency in many areas of online commerce. Long postal delivery times are eliminated, as are sources of error that can occur when orders are entered manually by fax or email. A prerequisite for participation in electronic data interchange is the fulfilment of minimum technical requirements. For the ordering customer, this is already given by a PC with a corresponding Internet connection, while the recipient usually has more complex technical means at his disposal.
A distinction is made between different transmission methods for electronic data exchange. In the asynchronous process, data is transmitted in independent steps. This can be found, for example, in the transmission of emails. The data is sent independently of each other without expecting an immediate response. Although one often receives an email back in response to one’s request, this is a new step that is independent of the previously sent email. In EDI systems, communication here is based on the so-called push principle. With the synchronous procedure a business-content-related answer from the counterpart takes place still in the existing connection, for example with the inquiry of stocks. The requested information is obtained according to the pull principle. The fully automated procedure takes up the idea that electronic data exchange should function completely without human intervention. The sender system initiates a request and no human intervention takes place until the information is entered or posted in the receiver system, which significantly reduces the number of data and input errors.
Development and significance
The idea of EDI first emerged in the 1960s, when data was exchanged in the USA via the communication channels available at the time, such as telephone and telex lines. This was still done without any defined standards. Since then, EDI has developed inexorably and is still an essential factor today, without which modern data exchange would not be possible.
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