EDI, XML and how they interact

In order to understand what the relationship between EDI and XML is, we first need to give the basics of EDI and what its purpose is.

Source: https://www.freepik.com/free-icon/xml-file-format-symbol_742783.htm

EDI is the technology that enables computers to basically speak the same language, allowing them to send and receive business documents in a common format.

EDI is accessible via two different methods, upon which we will elaborate below:

  • the ANSI X12/EDIFACT standards approach;
  • the XML approach.

The first approach is location-based and it is based on the possibility to create EDI documents that comply with the regulations imposed by popular standards. For instance, in the United States the most commonly used standard is ANSI X12, while the rest of the world relies on using EDIFACT.  These standards basically point out where each data unit will go in the document.

The second approach managed to eliminate this factor, so that location does not play as a factor in the equation. Electronic business documents can thus be created with more flexibility, XML not being a standard that offers rules to be adhered by. With XML, you can basically construct remittance advices, invoices, purchase orders – basically the same documents defined by ANSI and EDIFACT. XML is also very useful within enterprises, being used to share data between different system components. Also, there is one popular standard that uses XML – it is called RosettaNet and it was created by a group of telecommunication and logistics companies, as well as consumer electronics, major computers etc.

XML is also used on a global scale, benefitting global supply chain processes everywhere. The location-dependence factor is not the only one that differentiates ANSI- and EDIFACT  standards from XML. The way they work is entirely different actually: the former are very strict regarding the data’s positioning in the document, while the latter uses tags to identify certain categories, such as date, quantity, size etc and it looks something like this: “<quantity>4</quantity>” to indicate a quantity value of 4 items. All these tags result in much larger files, but the difference in size will be all worth it when it comes to troubleshooting performed by actual humans.

Rumors had it that, at one point, EDI would be replaced by XML – but this was not the case. EDI proved to be extremely efficient, covering every need that a company may have in terms of efficiency and productivity.

If you would like to know more about EDI, XML and how they work together, please give us a call.

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