Electronic
Data Interchange (EDI): The
process of transmission of data between two computers as per some standard is
known as electronic data interchange. Using EDI, trading partners establish
computer-to-computer links that enable them to exchange information electronically.
International Data Exchange Association defines EDI as ‘Electronic data
interchange is the electronic transfer from one computer to another of data that
can be processed using an agreed standard to structure the data.’
The electronic data interchange between computers of two
different organizations like vendors and customers may happen as per EDI
standards.
In this case, standard transaction documents like
invoices, purchase orders etc. are transmitted through a telecommunication
network and accepted electronically at the other end. This eliminates the need
of printing and paperwork. In doing so, the computers at both the ends conform
to certain standard formats of data. Presently there are two most widely used
standards:
EDIFACT – International standard for EDI communications
ANSI
X12 – US standards for EDI communication
Retail organizations can develop and conform to EDI
standards for even internal transfer of data from retail POS to central office
servers. However, most organizations are networked either through private
networks Intranet or use applications over the Internet. This eliminates the
need of EDI transmission.