What is electronic data interchange (EDI) — complete 2026 guide
In short: Electronic Data Interchange (EDI) is the structured transmission of commercial documents (orders, invoices, dispatch advices) between IT systems, in standardized format (EDIFACT, X12, XML), with no human intervention. Complete guide: definition, standards, messages, protocols, advantages.
Key capabilities
- Simple definition: EDI = sending structured commercial documents directly between the IT systems of two companies, no email or PDF.
- Standards: EDIFACT (dominant in Europe), X12 (US), ODETTE (automotive), UBL 2.1 (PEPPOL, e-Invoice).
- Main messages: ORDERS (purchase order), ORDRSP (confirmation), DESADV (dispatch advice), INVOIC (invoice), RECADV (receipt advice).
- Transport protocols: AS2 (dominant), OFTP2 (automotive), SFTP, PEPPOL, VAN — how the messages are actually delivered.
- Who uses EDI: Retailers, distributors, manufacturers, carriers, tax authorities (ANAF, e-Invoice) — any serious B2B.
- Advantages: Zero manual entry, zero errors, processing time from hours to seconds, cost per document under €0.10.
How EDI works, step by step
Step 1: the retailer generates a purchase order in their ERP for a supplier. The ERP converts it into EDIFACT format (ORDERS message). Step 2: the message is sent through the agreed protocol (AS2, OFTP2) to the supplier. Step 3: the supplier's system receives the message, validates it, converts it into a format readable by its own ERP. Step 4: the order lands automatically in the supplier's ERP, with no human operator.
Later, the supplier sends ORDRSP (confirmation), DESADV (when goods leave) and INVOIC (invoice). The retailer responds with RECADV (receipt). All correspondence is structured, standardized, automated — zero email, zero PDF, zero manual entry.
Frequently asked questions
What does EDI mean?
EDI means Electronic Data Interchange — the transmission of structured commercial documents (orders, invoices, dispatch advices) directly between two companies' IT systems, in a standardized format read automatically by computers, with no email, PDF or manual entry.
What is the most used EDI standard?
In the European market, EDIFACT (versions D96A and D01B) is dominant for retail and distribution. In the US, X12 is used. In automotive, ODETTE (with JAIF for Japan and VDA for Germany). For European fiscal invoicing: UBL 2.1 (PEPPOL, ANAF e-Invoice).
How are EDI messages actually transmitted?
Through specialized transport protocols: AS2 (dominant in retail, HTTP + encryption + MDN), OFTP2 (automotive), SFTP (simple and widely supported), PEPPOL (for EU fiscal invoices), VAN (private networks, declining). EDIconnect supports all these protocols simultaneously.
Is EDI mandatory in Romania?
Not directly, but in practice yes: most major retailers (Kaufland, Carrefour, Lidl, Auchan, Mega Image etc.) require EDI as a contract requirement for their suppliers. In addition, ANAF e-Invoice is mandatory from 2024 for B2B — and e-Invoice is also a type of EDI (UBL 2.1).
How much does EDI implementation cost?
It depends on architecture. Web EDI SaaS: from €24/month (no upfront). Managed EDI: €200-500/month. On-premise EDI: €15,000-100,000 investment + operations. For most companies, Web EDI is architecturally and financially optimal.