EDI

Electronic Data Interchange. The structured, automated, standards-based exchange of business documents between IT systems of separate organisations.

Definition

EDI covers the practices and standards that let two organisations exchange business documents — purchase order, acknowledgment, despatch advice, invoice — in machine-to-machine mode, with no human intervention on the transactional payload. The content follows a normalised syntax (EDIFACT, X12, cXML, UBL…), transiting through a secure transport protocol (AS2, OFTP2, SFTP, AS4).

Three characteristics tell EDI apart from a plain file exchange:

1. Normalised structure — a BGM is not an arbitrary string, it is an EDIFACT segment defined by UN/CEFACT.
2. Mutual identification — every party is identified by a stable code (GLN, DUNS, ICD…), not a URL or an email.
3. Two-way acknowledgment — for each interchange, a syntactic acknowledgment (CONTRL in EDIFACT, 997/999 in X12) confirms receipt and conformance.

Origin

The EDI concept emerged in the late 1960s in US rail and road transport, around the need to exchange shipping manifests between carriers. Standardisation followed two parallel tracks from the late 1970s: ANSI ASC X12 in the United States (first draft in 1979, ratified in 1985), and UN/EDIFACT in Europe (launched by UN/ECE in 1986, version 1 published in 1987). Both standards still coexist in 2026 — X12 dominant in North America, EDIFACT everywhere else.

Example in context

When a buyer places an order to a supplier via EDI:

1. The buyer's ERP generates an ORDERS message (EDIFACT) or an 850 (X12).
2. The message is wrapped in an interchange carrying sender and receiver identities.
3. The interchange is transmitted via AS2 (or OFTP2, SFTP…), encrypted and signed.
4. The supplier emits a syntactic acknowledgment (CONTRL or 997), then a business response with an ORDRSP (or 855).

No human intervention on the content — humans only set up the mapping and supervise exceptions.

Related terms

• EDIFACT — the UN syntax standard.
• X12 — the ANSI North-American standard.
• B2B — Business-to-Business, EDI's commercial scope.
• VAN — Value-Added Network, the historical intermediation layer.
• AS2 — the dominant secure transport protocol.