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What Is Edi & How Does It Works?

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Submitted By kaysernayem
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Electronic data interchange (EDI) is a document standard which when implemented acts as common interface between two or more computer applications in terms of understanding the document transmitted. It is commonly used by big companies for e-commerce purposes, such as sending orders to warehouses or tracking their order. It is more than mere e-mail; for instance, organizations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards.

In 1996, the National Institute of Standards and Technology defined electronic data interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media." It distinguishes mere electronic communication or data exchange, specifying that "in EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing."[1]

EDI can be formally defined as the transfer of structured data, by agreed message standards, from one computer system to another without human intervention.

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