IT Glossary
What is EDI?
Electronic Data Interchange is the automatic exchange of standardised commercial documents — orders, dispatch advices, invoices — directly between the IT systems of trading partners, with no email and no retyping.
Sooner or later a large retail chain tells a supplier that orders will arrive by EDI from next quarter, and that participation is not optional. That sentence has funded most EDI projects ever undertaken. Electronic Data Interchange is a decades-old family of standards — EDIFACT in Europe, ANSI X12 in North America — that defines exactly how a purchase order, a dispatch advice, a receipt confirmation or an invoice must be structured so that two companies' systems can exchange them without a human in between. The order leaves the retailer's system and arrives in the supplier's as a real order, complete with agreed product codes and delivery windows, rather than as an attachment somebody must interpret and retype. What makes EDI commercially interesting is less the technology than the access it buys: for many chains, pharmacy groups and automotive manufacturers, EDI capability is a supplier qualification criterion, so the project is not an efficiency initiative but the price of the shelf. The efficiency arrives afterwards, in the errors that stop happening and in invoices that get paid on schedule because nothing was mistyped.
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Why it matters for your business
Access to the large retail networks
Chains that require electronic document exchange as a qualification condition become addressable markets rather than closed doors.
No retyping and no operator errors
Orders enter your system exactly as sent, which removes the wrong quantity, wrong code and wrong address class of mistakes entirely.
Faster, more predictable payment
Invoices matched automatically against orders and receipts clear approval without the disputes that hold payment for weeks.
Frequently asked questions
What is the difference between EDI and mandatory e-invoicing?
Different purposes. National e-invoicing regimes are fiscal: the state requires the invoice in a standard format so tax administration can see the transaction. EDI is commercial: your customer requires orders, dispatch advices, receipt confirmations and invoices in a format their logistics systems consume. They overlap on the invoice document and coexist happily; complying with one does not satisfy the other.
What do I need in order to trade by EDI with a retail chain?
Four things, usually. A product catalogue with globally recognised item and location codes, an ERP or order system capable of importing and exporting the documents, a connection route — most mid-sized suppliers use a service provider rather than building their own channel — and completion of the chain's certification tests. The catalogue quality is what actually determines how long it takes.
How long does an EDI integration take and what does it cost?
With a service provider and a cooperative ERP supplier, expect four to twelve weeks per trading partner, shorter for each partner after the first because the mapping work is reused. Costs split between a project fee in the low thousands and a monthly subscription tied to document volume. The variable that overruns is always partner testing, not development.
Let’s talk about your project
Message us on WhatsApp or send an email — you talk directly to a developer.
office@northdan.com · +40 752 070 247