Your EDI pocket glossary

Whenever you approach a new territory such as the one revealed by an EDI implementation for your company, you may  feel overwhelmed and ultimately confused by the thick, technical terminology. What does it all mean?

You will notice that some terms are similar to words you may have heard before, but in the EDI universe they get a whole other meaning. So how can you navigate through the confusion and get an accurate idea of what’s happening in the process of EDI implementation?

 

Source: https://nei.nih.gov/sites/default/files/kids/glossary/glossary.png

In order to get a better understanding of the specifities, we have prepared a beginner’s glossary for you:

EDI

This is where it all begins. It is short for electronic data interchange and it refers to the data exchanged by computers, who basically speak the same ’language’. They do this by using a standardized messaging format, which facilitates communication between computers from all across the globe.

Protocols

We mentioned before that the only way that EDI systems can communicate is through standardized messaging formats. These are otherwise known as protocols.

The most common protocols that are in use today are FTP/VPN (File Transfer Protocol over a Virtual Private Network), AS2 (Applicability Statement version 2), SFTP (Secure File Transfer Protocol), and FTPS (File Transfer Protocol Secure). They are extremely secure, making it impossible for unwanted outsiders to access data.

EDI Standards

It may sound confusing, but standards and protocols are not actually the same thing. A protocol refers to the way in which this data travels over the internet, while the standard is basically the format that encapsulates this data. Let’s think of a situation in which you purchase something from the UK, but the person who receives the purchase order does not speak Romanian, so they cannot process the order using their linguistic capabilities. This where the EDI standards come in: it ensures that the business flow continues freely, unimpaired by any cultural barrier.

As for standard usage, it is safe to say that Europe mostly uses EDIFACT, while North America is more accustomed with ANSI ASC X12.

Cloud Technology

The Cloud has recently ascended to technological popularity, mainly because it eliminates the need to build your own network and use your own resources, but rather to share computing resources. Great examples of Cloud usage are the world’s very giants such as Gmail, LinkedIn and Facebook. They basically rely on cloud computing to deliver their services and run their business from servers that are kept in large data centers.

If you opt for a cloud-based EDI system for your company, you will be spared of large investments in software or expensive equipment. The advantages are priceless, both in terms of money and time.

Translation

The concept of translation basically refers to the same thing it ordinarily does, but adapted to EDI. This means that information gets converted into a standard EDI format.

Now, you can translate data in two different ways: you can either use a translation software or let an EDI provider take care of everything for you. Fortunately, there is an entire market of translation software from you to choose from, regardless of your budget and needs.

EDI VAN

You’ve probably remotely heard of value-added networks. Well, in EDI they are abbreviated to EDIVANs and they are the secure way to send documents to anyone, acting like a third party.

A VAN will allow its users to each use different standards, ensuring that translation is made and all the data is communicated in a universal language, accessible to all.

It’s important to see past the taboo of ‘new and unintelligible technology’ and understand that nowadays EDI is all around us. And after all, it is essential to know the basics of the technology that you want to implement and that will boost your company’s productivity and efficiency. If you want to find out more, contact us.

 



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