How Electronic Data Interchange is Evolving


From early beginnings as a military tool to manage complex logistics involved in large-scale airlifts of the Second World War, Electronic Data Interchange (EDI) has grown to become the standard in high-volume, B2B structured data transmission.

As businesses become increasingly computerized in the 1980s, EDI formed an integral part of large volume data transmissions, such as between supply chain partners, for larger businesses. The benefit of such efficient data transfer, without human intervention, became a competitive advantage – quickly adopted by businesses who could afford to invest in EDI infrastructure.

EDI has traditionally been associated with large corporates, having a reputation for being complex and expensive; a powerful tool, but only for those who really need it.

Recent evolution in EDI

Over recent years, things have changed though.  EDI solutions now exist for all sizes of company, from large multinationals to small and medium-size enterprises (SMEs). With the explosion in business data, EDI solutions are well suited to facilitating the high-volume, high-speed, computer-to-computer transactions and information flow prevalent in today’s business arena.

With the technology space opening up to an explosion of agile and hungry solution providers, traditional EDI has adapted and evolved to retain its position as the standard for B2B structured data transmission. EDI has evolved to incorporate and benefit from a range of technological innovations in recent years. EDI solutions now also reflect the sensibilities of modern software solutions – including improved interoperability, ease of use and cost efficiency.

Web-based EDI

As web-oriented solutions have advanced to address issues of confidentiality, authentication, data integrity and nonrepudiation of origin, barriers to web-based EDI have fallen away.  Web-based EDI is now the norm, running on managed networks, virtual private networks (VPNs), or point-to-point connections, utilising secure internet connections via AS2 or SFPT.

It’s not just the communication channels that have evolved, improvements in the x.12 EDI formatting standard have made EDI more broadly applicable solution for businesses.  As EDI has evolved, it has become faster and lower cost to implement.  All of these factors have contributed to further growth and strengthened EDI’s dominance as the standard for B2B structured data transmission.

Flexibility in modern EDI

EDI is often considered a large investment for the businesses.  As such, questions will be asked about how ‘future-proof’ the solution is, and how it can evolve to meet with changing business demands and partner requirements.  This is where traditional ‘single standard’ EDI solutions have fallen down, their security and resilience has precluded agility and flexibility.

Netsend works with businesses to provide EDI solutions that aren’t necessarily locked to one EDI standard.  With experience in working with a huge range of data formats and the most popular EDI standards, Netsend has translation models in place to change data from one EDI standard to another, as well as to and from any other data format.

EDI solutions, such as Netsend, that can work with a broad range of EDI standards, ensure maximal future compatibility with business partners.  Ensuring your business never cuts off the option to work with a particular EDI format could make the difference between being able to work with a future partner, or not.

Greater flexibility, scalability and availability in EDI

Another advance in how EDI is deployed for businesses is in the location of the EDI solution.  Traditionally, many businesses have taken steps to ensure their EDI systems sit entirely within their firewalls – preferring the security of a solution based on-site.

This approach went hand-in-hand with in-house development, based on a core do-it-yourself platform.  However, a modern approach to solutions architecture demands greater flexibility, scalability and availability resulting in more cloud-based, or co-located EDI solutions.

Whilst there are many benefits to taking EDI outside of the firewall, this requires further security planning and procedures to be implemented, often best achieved through partnering with an experienced solution provider.

How will EDI evolve further?

It’s safe to say that the number of EDI standards is set to increase over time, as more standards are introduced and businesses retain older standards for a variety of reasons.  Choosing an EDI solution that is adaptable to a broad range of existing, and future, EDI standards makes good business sense in light of this.

Web-based EDI is set to become faster and even more secure over time as associated technologies mature.  As businesses move increasing percentages of their infrastructure online, web-based EDI and associated infrastructure is likely to need to integrate more deeply with the broader business.

EDI has evolved and adapted to consolidate its position as the B2B structured data transmission standard, and we expect to see this continue.  Smart businesses will capitalize on this for competitive advantage.  Ensuring the forward-facing flexibility to achieve this requires careful evaluation of EDI solutions, make sure to use our EDI Check List when doing so, to pick the most adaptable and least limited from the available choice.