Electronic Data Interchange (EDI) is a technology that enables the digital exchange of business documents between companies in a standardised format. EDI works by translating documents such as purchase orders, invoices, and shipping notices into electronic formats that can be automatically processed by the receiving company’s system. This process eliminates manual data entry, significantly reduces errors, and speeds up transaction times, making EDI an invaluable tool for businesses across various industries.
The implementation of EDI involves setting up communication protocols, such as AS2 or FTP, to securely transmit documents between trading partners. Once the infrastructure is in place, businesses can automate the exchange of a wide range of documents, reducing the need for paper-based processes and improving the overall efficiency of their operations. EDI is widely used in industries like retail, manufacturing, logistics, and healthcare, where the speed and accuracy of transactions are critical to success. By adopting EDI, companies can improve their operational efficiency, enhance communication with partners, and stay competitive in a fast-paced business environment.
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